Carnival Cruises has been in the news for all the wrong reasons this year, however one must give credit to the Mega Cruise Line for spending $155 million USD on the Carnival Destiny (now 17 years old). By all recent reports, this upgrade transformed the ship so much, that it is now in many respects completely different, hence the name change to the "Carnival Sunshine".
The interesting precedent which has occurred here, is that similar high investment upgrades could spark a new trend in cruising, whereby Cruise Lines could opt to upgrade and transform rather than purchase a new-building. By way of financial illustration here are the facts:
- A new mega ship costs in the region of $550 to $750+ million USD.
- The Carnival Sunshine refit therefore represents a huge overall saving.
- The same strategy could well be adopted by other Cruise Lines.
- Carnival's largest European brand Costa recently converted the the Costa Romantica to the Neo Romantica in a 90 million euro upgrade.
- The Mistral from Ibero Cruises will now enter the Costa fleet and become the Costa Riviera in a similar upgrading move.
The most fascinating aspect of the transformation was the increased capacity from a 2,600 pax ship to a 3,000 pax, thereby increasing the scalable long term profitability.
Cruise Media attention is now focussed on Carnival to see if this is a one off or whether indeed the strategy is going to follow through to all the older vessels in the fleet and indeed to other group members as a whole.
