Recent $155 million transformation of Carnival Destiny into Carnival Sunshine was partly carried out so that Carnival Corp & plc, the Anglo-American cruise shipping group, could gain experience from such a huge project, Howard S. Frank, deputy chairman and Chief Operating Officer of the group, told Cruise Business.
"It was a huge undertaking, it put our guys under a lot of pressure," said Frank, whio spoke to Cruise Business in London. Asked if the project could be seen as a benchmark of such a large project, Frank replied: "Yes, you could say so." It is unlikely that an equally large refit would take place in the near future, he added.
The group will continue to upgrade its vessels, both from commercial and technical point of view, but the extent of work on individual vessels will depend on specifications of the ship in question. Adding decks on top of existing ones will not be possible from stability point of view on all vessels, Micky Arison, chairman of the Carnival group, pointed out during a presentation in London.
Frank stated that as more and more ships enter 15-20 years' age, capital expenditure on mid-life refits is poised to increase. The group is not in a hurry to sell older vessels as long as they continue to generate good returns, Frank said.
Another aspect is the second hand market, which according to him is "not very strong." In recent past,Carnival's P&O Cruises unit sold the 1984 built Artemis for a company that chartered it out to Phoenix Seereisen, the German tour operator, on long term contract. Carnival granted the buyer seller's credit to ensure completion of the deal. "The buyer was very strong and could refinance it (seller credit)," Frank stated, adding that not all potential buyers of second hand tonnage are in this position.
However, once the European economies' recovery gathers momentum, tour operators are potential buyers of second hand ships. Chinese companies also screen the market, with various degrees of intention to enter the cruise sector, Frank concluded.