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Odo – CBR commentary: CMV on right track with Pacific Pearl purchase

Main points:

- Company has stated growth strategy

- Move to larger tonnage key to implement strategy

Cruise & Maritime Voyages (CMV), the British operator of second hand tonnage, made a good move by acquiring the 1989 built Pacific Pearl from P&O Cruises Australia.

The 63,786 gross ton ship that will enter service as Columbus under the CMV houseflag in June 2017 will be by far the largest vessel in its then five-strong ocean going fleet, taking the title from the 1985 built Magellan of 46,052 gross tons. Interestingly, CMV opted for the P&O Cruises Australia vessel rather than Henna, sister ship of Magellan, which is reported to be up for sale for 35 million after its Chinese owner closed down operations.

The new acquisition is well known on the British market, where it served from 1997 to 2010, first as Arcadia of P&O Cruises and then as Ocean Village of a another Carnival group company of the same name, which is no longer in business.

Many second tier cruise operators in terms of size in Europe say they want to offer a traditional experience using smaller vessels than the large contemporary market newbuildings, which now often carry 4,000 passengers or more.

It is noteworthy that CMV says Columbus will offer 1,400 berths, which is less than the 1,621 berth capacity when the ship entered service as Star Princess way back in 1989. This is because it will offer many cabins for single occupancy. However, Star Princess started life as a premium market vessel, so a decrease in capacity suggests CMV wants to retain capacity growth below gross tonnage growth as its fleet expands.

The company did the same with Magellan, whose current capacity of 1,300 is also below the 1,452 quoted for ship that started life as the Holiday of Carnival Cruise Lines in 1985.

By moving towards larger tonnage CMV can tap a large number of platforms built in about 1985 to 1995 that major groups, such as Carnival Corporation & plc and Royal Caribbean Cruises, Ltd. are likely to offer for sale.

However, should it have retained its focus in its original 800 to 1,000 passenger range, it would have found hardly any even moderately modern units to grow its business.

To sum up: in our view, an operator that wants to grow by using second hand tonnage should accept the fact that vessels of about 1,500 to 2,500 passenger capacity offer a growth opportunity, whereas the choice of purchase candidates is almost non-existent in smaller size ranges.