- The cruise industry is rebounding post-pandemic, witnessing increased ship orders, small luxury sector growth, and a shift towards alternative power sources.
- Despite financial challenges, 2023 saw a surge in ship deliveries, with a focus on smaller luxury vessels and a positive outlook for profitability in 2024.
- Decarbonization efforts, including LNG adoption, methanol usage, and emerging hydrogen and battery technologies, are shaping the industry’s future to meet environmental goals and boost efficiency.
Revival Trends
Market Dynamics
During the market downturn, buyers capitalized on distressed conditions, exemplified by Fred Olsen Cruise Lines acquiring Holland America’s ships and SeaJets’ speculative purchases from Carnival. Veson Nautical categorizes cruise ships by size, distinguishing mega, large, and small vessels, each with varying ordering trend
Industry Outlook
The small luxury vessel sector dominates the 2022/23 orderbook, with companies like Four Seasons and Ritz Carlton investing in ultra-luxury experiences.
Ship deliveries surged in 2023 to 23 ships, signalling a positive trend for the industry, with projections of 15 and 16 ships to be delivered in 2024 and 2025, respectively.
Record customer deposits and bookings throughout 2023 indicate a strong rebound for the cruise industry, reflected in the ‘big three’ PLCs’ financial reports, showing vessels operating at over 100% occupancy and positive EBITDA figures.
Decarbonization Drive
The cruise industry’s shift towards net-zero goals drives focus on decarbonization through alternative fuels like LNG and methanol. Although LNG dominates, methanol-ready vessels gain traction; however, HFO-powered ships still dominate orders, indicating a gradual shift toward alternative fuels.
DNV’s Hermundsgård underscores LNG and methanol’s significance for cruise decarbonization, emphasizing flexibility in vessel design for future fuel opportunities.
Cruise Ships
In October 2023, 17 LNG-fueled cruise ships were operational, with 25 in the order book, while 225 cruises utilised scrubbers for emission control.
Batteries gain traction in cruise ships for shore power and hybrid systems, with 34 vessels currently operating with batteries, exemplified by Ponant’s Le Commandant Charcot combining batteries and LNG.
Hydrogen Initiatives
- The cruise industry is embracing hydrogen: Silversea Cruises’ Silver Nova employs a 4-MW fuel-cell system alongside LNG engines, while Royal Caribbean’s Icon of the Seas also integrates hydrogen fuel cells.
- Northern Xplorer plans a hybrid fleet using hydrogen and batteries, collaborating with partners for a complete hydrogen value chain.
- Focus on energy efficiency includes various technologies like hull-air lubrication, shore-power connections, and exhaust gas recirculation, supplementing primary alternative fuels for emission reduction.
