Nothing reflects the newfound confidence in the cruise sector after five tough years than the promise from MSC Cruises president Gianni Onorato that MSC is “very close to ordering a new class of ships, which will be our largest yet.”
The broader significance of this lies in a statement MSC owner Gianluigi Aponte made in 2012 that the company would not build more ships “until the global economy starts showing some signs of stability and improvement.” In fact, Onorato himself – speaking when still president of Costa Cruises before his shock move to MSC last summer – said: “We cannot build ships without acceptable margins in the market.”
So something must be going right out there, and not just for MSC. In Europe – the brand’s main battleground – Onorato says: “We do see some good signs of further recovery but it still depends on how the cruise lines behave on pricing. It is so important that we take full advantage as, although 2013 was better than 2012, it was still not as good as we expected it to be. The upturn now is across all markets but they are all at different stages.”
He points out that in Spain, which has been struggling more than the others, the situation is being improved by this year’s reduction of cruise capacity in the market. And there is clearly enough improvement all round for MSC to advance its plans for a new class of ship, which he says will be larger overall than the Fantasia class – shorter in length but wider instead.
Ironically, though, the other major capacity growth plan for the brand involves ‘stretching’ its four Lirica-class ships. Onorato says: “We have a young fleet now, with the oldest ship just ten. This gives us an opportunity to bring all our ships up to the same level by adding some of the features of the new ships.” There will also be a new Spray Park feature that is unique to the lengthened ships, along with additional retail space on the refurbished vessels.
He adds: “We will also make the ships more economical to operate by upgrading the technology and increasing the capacity with 200 new cabins (more than 70 with balconies) on each. This will make the ships very competitive. Also, by doing four ships, we will even have economies of scale in this project itself.
“We are scheduling the first ship to be 11 weeks out of service for the stretching but then the next three should take just nine weeks apiece. The first will be stretched later this year with the other three to follow in 2015. By the fall of next year, we shall effectively have four new ships in our fleet.”
Even extended, though, the four ships will not be large enough to figure on the banned list for Venice but the proposed newbuilds certainly will fall foul of the new regulations (along with the Fantasia ships that MSC has already been cruising in and out of the Italian city).
The Italian Prime Minister’s intervention late last year to announce a limit on cruise calls by ships over 40,000gt this year and then, from this November, a complete ban on 96,000gt-plus ships cruising up the Giudecca Canal to Venice, has created real problems for 2014/15 deployments.
“There is some confusion with some of us still not sure of the final plan for 2015 as we published our brochure for 2015 in February,” says Onorato. “But we stuck to the 96,000gt rule, deploying our smaller ships instead. My fear, though, is that, if the local people in Venice keep fighting each other over this issue, it will be left to the cruise lines to make the decision for them. I hate to say it – but this is a very Italian situation.”
At least there are no such access problems in the Caribbean, where MSC has finally decided to make its long-awaited, full-frontal assault on the North American market by sending MSC Divina there to operate year-round from Miami.
Onorato says: “North America is a huge market and a big cruise company like MSC simply cannot avoid being there. There is such big potential for a brand like ours, with its clear differentiation as an Italian company with a strong Mediterranean flavour and links with iconic Italian brands like Fiat and Martini.”
Asked whether its ambitions stretch beyond the Caribbean – perhaps to Alaska – for its ex-US cruises, he says: “Ask me that question when I have announced the new ship orders. At the moment, we just don’t have enough ships to do everything we want to do in places like Asia, let alone Alaska.”
MSC Cruises has enough on its plate in the southern hemisphere currently, including expansion of its fleet in South America at a time when other brands are cutting back capacity after disappointing yields in a market which has seen huge capacity increases over the past half dozen years. But Onorato says: “We prefer to battle rather than leave the field. We think it is too big a market to abandon and we are working with CLIA to find solutions, one by one, to the operating problems in the region.
“Having CLIA take over the local Abremar cruise association is very helpful as it means we have a more international representation and a more powerful force promoting the industry by showing how important it is to the regional economies.”
For South Africa, MSC is the biggest cruise game in town and Onorato would not have it any other way.
He explains: “We have a long tradition there and remain the most recognised brand. Our idea is to keep focusing on the emerging middle class and also to capture a younger crowd with shorter cruises.
“We want to operate two ships there but they have to be our smaller ones so they can reach destinations which are not viable for the bigger ships.”
Although MSC has developed an island destination and continues to manage it, so far it has not become involved in creating cruise destinations in the Caribbean as Carnival and Royal Caribbean have done with the likes of Grand Turk and Falmouth. However, Onorato asserts, “This is something we would do if ever we felt it was required. It is a decision we will make as we continue to grow the brand.”
It is a decision which could be made quickly. Summing up his new role, he says: “This is a young, fresh company and family-run, so we can reach very quick decisions without having to keep reporting back within a corporate structure. It is a company with very clear targets for the future and I see it as one with more opportunities than challenges ahead.”
This article appeared in the Spring/Summer 2014 edition of International Cruise & Ferry Review. To read other articles, you can subscribe to the magazine in printed or digital formats.