Heading into 2020 the Cruise Industry was booming.
Number of passengers who went on Cruises in 2019 was at an all time high. A trend mirrored by the exponential fleet growth since the 1950s. However, COVID-19 caused an industry wide shut down. Since the start of the year, activity has fallen nearly 50%. This is a dramatic decrease and is unprecedent in the Cruise Industry, especially when compared to last year which during the same period, activity never dropped more than 10%.
These current lows are expected to continue, until normal operations slowly resume.
Like activity, Cruise values have also taken a tumble since the start of the year. Some of these billion dollar assets have become financial liabilities with several high priced vessels are laid up and out of action. The global Cruise fleet has decreased in value by USD 6.36 billion. The 2010 built Mega Cruise ships are the hardest hit area, falling in value by over 8% compared to the start of the year.
A total of 103 Cruise Ships are set for delivery over the next 8 years. 77 of these will be going live by 2024, meaning the global fleet is set to increase by over 20% in the next three years. Adding a further USD 42.30 billion in value to the waters.
The start of 2020 has seen the lowest numbers of Cruise Ship orders placed since 2012. This year Mystic Cruises placed one order for 4x Small Cruise Expedition ships. However, the current pause and delays on Cruise Ship orders can be seen as a positive. With a large number of Cruise Ships on order leading into the year, the caution here is to ensure the market is not oversupplied by newbuilds without the required increase in demand and confidence of passengers to Cruise again.