Cruising: New Ships and New Thinking

We’re not quite back in the boom years of cruise ship construction, but the outlook for the major yards specializing in cruise tonnage looks healthier than it did a couple of years ago. Carnival Corporation, Royal Caribbean and Star Cruises’ NCL have all announced significant newbuilding projects in recent months.

Now there are signs that new players are eyeing the market.

One is Trondheim, Norway, entrepreneur Olav Norum. He is putting together a venture called Project Vision Quest that intends to target the U.S. market for conferences at sea with three 273 m long, 70,000 gt , 1,200 passenger ships developed in cooperation with Aker Finnyards Technology. The price tag of each ship would be around Euros 390 million (about $510 million). Plans are for the first ship to be delivered in 2007.

Facilities aboard each ship would include conference seating for 1,300 people, with some 3,500 square meter of convertible exhibition/conference space.

So if Norum builds these ships, will people come? Vision Quest only needs to capture a tiny percentage of the U.S. conference market in order to fill the ships. In the past the issue of U.S. tax deductibility of conference expenses aboard foreign ships has been one argument used in favor of building U.S.-flag cruise ships. Norum says he is aware of the issue, but that the much lower cost of staging an event on board an internationally flagged vessel would more than offset the tax savings in question.

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2014 Winter/Spring Buyer's Guide

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