Royal Caribbean International this morning said it would base its 226,000 gross ton Allure of the Seas in Barcelona for a series of seven night cruises through the summer of 2015. This follows a "mini season" by its sister ship, Oasis of the Seas, later this year.
The move to base Allure of the Seas in Barcelona is a sensible move. Both Royal Caribbean Cruises Ltd (RCCL), the parent company of Royal Caribbean International, and its competitor Carnival Corp & plc group, have stated that the demand for European itineraries is firming after a fall in the aftermath of the financial crisis and subsequent cuts in capacity in Europe.
Royal Caribbean's competitors are bringing new capacity online in 2015: AIDAPrima of Carnival's German unit AIDA Cruises and Britannia of its UK based P&O Cruises will both enter service in the spring of 2015.
The RCCL group is responding by raising the stakes: 2015 will see the entry into service of Mein Schiff 4, the second of two 99,300 gross ton newbuldings of TUI Cruises, in which RCCL has a 50% stake. In the UK, the new 167,800 Anthem of the Seas is due to replace the 158,400 gross ton Independence of the Seas. In the Mediterranean, Norwegian Cruise Line will keep the 155,800 gross ton Norwegian Epic year round in Barcelona from the summer of 2015.
Furthermore, the summer is peak season in Europe, it is not in the Caribbean.
By brining the Allure of the Seas to Europe, Royal Caribbean International will make sure that it has the assets in place to claim its place in the sun at a time when the European cruise market is due to receive lots of new capacity, which the lines hope will bring them lots of attention in the media and lots of business.
And it is here that the caveat lies: the move to bring Allure of the Seas makes sense to the company, but it may not be equally positive to the overall market. The question is whether the European market will be able to absorb all that new supply or not. With only the British and German economies firing on all cylinders, the local demand may not keep up with the increase. The interest of Americans to cruise in Europe may, therefore, play a crucial role in what the outcome will be.