MSC seeks to double its passenger total over the next six years. CEO Gianni Onorato talks strategy
By
David Mott |
This article was first published in the Spring/Summer 2016 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.
There is no doubt that in the last decade or so, the fastest-growing cruise line has been MSC Cruises, which now ranks in the top six of the world’s largest cruise lines. In 2004 the line was a small adjunct of the huge cargo operation, Mediterranean Shipping Company, with a handful of vessels. But since then it has built and introduced eight of the 12 large ships it currently operates and a further period of intense expansion is just around the corner.
Chief executive Gianni Onorato explains: “Between now and 2022 we shall be introducing seven new ships to double our total capacity in a US$5.4 billion investment plan. The new ships comprise two firm orders at each of Fincantieri in Italy and STX France at Saint-Nazaire. There are three options for further ships attached to these orders. But when did you last hear of a cruise line failing to convert an option to an order?” The answer to that question must be hardly ever. The forecast net effect of the new ships will be to double passenger numbers from the current 1.67 million to 3.4 million over the six-year period. Numbers for 2015 are expected to grow 10%.
The first ship out of Fincantieri in November 2017 will be MSC Seaside, the prototype of a class of vessels with 4,140 berths and a tonnage of 154,000gt. At Saint-Nazaire the debutante in the Vista class, MSC Meraviglia, will be slightly larger at 4,500 berths and 167,600gt. She is also a prototype vessel and will be unusual in that she will have three home ports – Genoa in Italy, Marseille in France and Spain’s premier passenger port, Barcelona. She is due in June, 2017.
“In both cases we are open for bookings two years before the ships make their debuts,” says Onorato. “We are very encouraged by the level of interest in the ships, particularly Meraviglia, which was first on the market. The construction of both ships is on target which means that, with a second Seaside ship coming in May 2018, we shall be introducing three large ships in just 11 months.” It’s a demanding schedule. Both new classes are larger than anything else in the existing MSC Cruises fleet.
MSC is not being left out in the race to capture a slice of the burgeoning China market for which the industry holds such high hopes for the coming years. The company has been in China since 2010 with a focus on inwards tourism. But now, in conjunction with Caissa, the country’s largest outbound travel agent, it is to start a new phase of its operations by targeting the domestic market from May of this year.
Says Onorato: “We have invested in upgrading Lirica, modifying her to suit Chinese tastes. She will be based in Shanghai and the crew will have an element of Chinese people in it. We also run training facilities to teach Mandarin.” The operation expects to get about 120,000 passengers in its first year. He claims that being a privately owned family company gives MSC an edge in China and elsewhere, because it enables “meticulous attention to quality and detail which only a family-owned company could achieve.” Cruises will be three and four days long to South Korea and Japan.
More interestingly, the company has decided to double its presence in Cuba for its second winter season there starting in November, 2016. For this, the 1,962-berth MSC Armonia will join the upgraded 2,120-berth MSC Opera which is operating the first winter season homeporting in Havana for a series of Caribbean cruises. There is said to be a strong demand for these cruises with an estimated 4,500 people expected to go to Jamaica, Cayman Islands and Mexico as well as experiencing the key attraction, which is an extended stay in the Cuban capital over two nights and three days.
“We are expecting a lot of passengers from Europe; also from Canada and Brazil and Argentina,” says Onorato. He denies that this expansion is directly connected with the thawing of relations between the United States and Cuba, but there is no doubt that the general business climate has been improved by this reconciliation.
Elsewhere in the fly/cruise market MSC has gone into partnership with Etihad Airways, the UAE’s national airline, to boost business to Abu Dhabi and the emirates. The line carried more than 100,000 passengers there between 2011 and 2015 and in the last winter season had a 20% market share. Abu Dhabi had a record 200,000 passengers in the 2014/15 season from all sources and next winter MSC Musica will be deployed there.
After a fallow year in 2015 in which the company concentrated on the Mediterranean and no itineraries originated from Southampton – though there were some transit calls – MSC Cruises will be back in the UK this year offering sailings to the ‘core’ Mediterranean as well as relatively newer Baltic and Norwegian Fjords destinations. In all, there will be 22 itineraries and over the year all 12 ships will call at the south coast port. It is thought the UK market is anxious to prove itself ahead of the arrival in service of the two new large ships in 2017.
The Swiss-based MSC Cruises is the largest privately owned cruise line in the world and part of the second largest overall shipping group. Most of its ships operate in the four-star premium market and the company, now in the top half dozen in size, is likely to be indisputably next in line after the big three market-leading cruise companies come 2022.