Fast-growing European cruise line MSC Cruises plans to grow even more.
The Geneva-based cruise operator announced Thursday morning that it has signed a letter of intent with the STX France shipyard to build two new massive ships, with the option of ordering two more. The ships are scheduled for delivery in 2017 and 2019; the contract will be binding when financing is secured, the company said.
MSC’s new ships will be some of the largest in the industry, coming in at 167,600 tons with capacity for 4,500 passengers at double occupancy and a maximum occupancy of 5,700 passengers. (The only ships that accommodate more passengers are the world’s largest, Royal Caribbean International’s Oasis of the Seas and Allure of the Seas, which have room for 5,400 passengers at double occupancy.)
Including all four potential ships, the cost would be close to 3 billion euros, or roughly $4 billion. Construction is slated to begin next spring.
The ship arriving in 2017 will be the first in four years for the privately held company, which welcomed eight new vessels between 2006 and 2013.
“I think timing-wise, this announcement is great because it just shows the commitment of MSC to grow,” said Ken Muskat, senior vice president of sales and marketing for MSC Cruises USA.
Since the company’s growth spurt over the last several years, Muskat said, the question has been whether MSC would stay a small brand or continue to grow and compete with larger rivals.
The cruise line, part of the family-owned Mediterranean Shipping Company, has 12 ships that sail in Europe, South America, South Africa, the United Arab Emirates and the Caribbean and expects to carry 1.7 million passengers this year. The company stationed a ship, the MSC Divina, in Miami year-round for the first time last year.
“I think the intention is to continuously grow,” Muskat said. “This is just another thing that helps solidify the powerhouse that MSC is and the financial commitment that MSC has to grow in the industry.”
The company’s CEO, Gianni Onorato, said in a statement that the new class of ship would be able to call in most ports and destinations in the world and be appropriate for sailing in winter or summer. The ships will feature a bigger theater, cabins specially designed for families, a two-deck inside promenade and an “amusement park connected to an outdoor aqua park.” The MSC Yacht Club, a cluster of private high-end accommodations with a solarium, lounge and restaurant, will also be expanded.
Muskat said bigger ships offer more cost efficiencies and more alternatives for passengers, who want a variety of restaurants, activities, entertainment options and outdoor spaces to choose from.
Stewart Chiron, a Miami-based cruise expert and CEO of CruiseGuy.com, said the order “showcases a private company standing toe-to-toe with the big boys.”
While MSC is still a long way from saying where it will deploy the new hardware, Chiron said he expects the first ship to come to the United States, which by then will be more familiar with the brand thanks to Divina’s year-round presence.
“They’re trying to expand and attract the world’s No. 1 source of cruise passengers,” he said. “You’re not going to be able to woo and wow the U.S. passenger base with ships that are 4 or 5 years old.”
Muskat said that while the company has big plans to grow in North America, “it’s going to be a little while before they sign on the dotted line where these new ships are going to go.”
News of the deal was not a surprise; late last year, MSC Cruises USA president and CEO Rick Sasso told the Miami Herald that the company was “unofficially” negotiating contracts for a new class of ship. On Monday, UBS Investment Research leisure analyst Robin Farley wrote in her regular update on the cruise industry that MSC was expected to order two vessels with an option for another two.
Farley wrote that she, too, believes the new offering from MSC could be targeted at the North American market.
“We note that MSC's having the Divina in the Caribbean year-round this year is the start of a long-term effort, rather than a short-term itinerary adjustment,” she wrote.