Luxury trips on the seven seas are the tourism trend that “everyone” wants to get into.
They promise peace of mind, unique dining experiences and “laid-back luxury”. Ship ohoi and welcome to luxury cruising. Here the drinks are high, the bags expensive and the view no less than fantastic.
The upper end of the luxury market is one of the biggest drivers in the cruise industry and tourism now, explains Patrick Scholes. He is the managing director of accommodation and leisure at the investment bank Truist Securities.
– Everyone is trying to get on top of that trend, he adds Bloomberg.
Or at least a number of hotel billionaires, who see the luxury niche of the travel industry coming to life faster than other parts of the market.
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Floating suites
One player that has jumped in is the world’s largest hotel chain, Marriott International. They own the brand name Ritz-Carlton.
The company launched its first luxury yacht last year. Less than a year later, there are already plans to expand the business, according to Businessinsider.
Trips up to and including 2024 are planned and available for sale. Travelers can choose between various destinations in the USA and the Caribbean, such as Fort Lauderdale and Bermuda, or European gems such as Barcelona, Nice and Venice.
1 out of 7Foto: Francisco Martinez / The Ritz-Carlton Yacht Collection
Also the hotel chains Aman Resorts and Four Seasons plans to offer guests with sufficiently thick wallets luxury cruises on the seven seas.
The latter’s floating suites cost about $4.2 million to build. The most expensive is a whopping 892 square meters and boasts four floors, a private spa and swimming pool, according to one press release.
Aman Resorts is owned by property developer Vladislav Doronin, who lives in Switzerland. Four Seasons is owned by Microsoft founder and billionaire Bill Gates and Saudi business prince Al-Waleed bin Talal.
The already established hotel chains can offer existing customers more places to spend money and bonus points. A well-known name and direct sales to regulars help to fill up the boats, writes Bloomberg.
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Hard times for old trotters
At the same time, more established and traditional cruise operators are struggling with high debt and a lower coverage ratio than before the pandemic.
Among them are the companies Carnival, Royal Caribbean Cruises and Norwegian Cruise Line Holdings.
Altogether, the pandemic left these companies with a debt of 74 billion dollars, or about 768 billion Norwegian kroner. Since 2019, their debt has increased by $44 billion, according to a Bloomberg Intelligence analysis.
Less income and higher interest rates have a dampening effect on the companies’ development plans, because they are still dependent on loans to have available capital, explains analyst Jody Lurie.
Now, among other things, the cruise giant Carnival expects greater competition for the customers who spend the most money. But they also hope to take part in some of the upswing.
– If they feel good, they might say “Cruise is a wonderful way to travel. Next time I might want to bring my children and grandchildren, and then the Four Seasons or the Ritz-Carlton are not an option,” says David Bernstein, Carnival’s financial director, to the news agency.
