JECKU EPM Market Trends Passenger Vessels - Arnaud Le Joncour, Chantiers de l'Atlantique - Danske Maritime
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JECKU EPM
Market Trends Passenger Vessels
Arnaud Le Joncour, Chantiers de l’Atlantique
July 17 & 18, 2019 – Milan, Italy
CRUISE MARKET
THE GLOBAL CRUISE MARKET VERSUS WORLDWIDE TOURISM
• Trend of cruise tourism matches the worlwide international tourists increase 2009
• Cruise market penetration compared to global tourism remains constant at about 2%
• Consequently, future perspectives for cruise market remain very favorable as tourism is developing worldwide
2000 to 2018: Global Cruise Market / Worlwide T ourism
1600 30
Number of international cruise tourists worldwide
1400
Number of international tourists worldwide
25
1200
20
1000
( in millions)
( in millions)
800 15
600
10
400
5
200
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
August 5, 2019 | Slide 3
Source: Statistica. Tourism worldwide (2019) and CdA Data Source
WORLDWIDE CRUISE MARKET CAPACITY
• Growth is projected for the foreseeable future,
• Aside from Asia/Pacific presently posting a temporary drop
40.5 (+2.8%)
27.8 (+4.1%)
Market Capacity (Millions)
21.0 (+4.5%)
15 (+6.9%)
12.5 (0%)
8.0 (+8.1%)
7.0 (0.%)
4.1 (-12.8%)
05 August 2019 | Slide 4
Data from 2019 Annual Report – Cruise Industry News
MARKET TRENDS
• American Market
• Continues to dominate the industry, all major cruise brands based in North America
• Capacity will be up 7% YOY in 2019 and reach 15 million passengers
• European Market
• Second largest deployment region and sourcing market
• East Med is again very popular
• An estimated 8% capacity growth this year and reach 8 million passengers
• Major sourcing markets include Germany, the UK , Italy, Spain and France
• Asia/Pacific Market
• China set to become ultimately the world’s largest cruise market, but 2019 is a readjustment year
• The growth in China is currently stopped by:
• Too much supply in 2018
• A challenged distribution model (based on chartering)
• Short notice bookings (1 month before departure) and short cruises (3-4 days)
• Lack of differentiation (product, destination)
• Despite these challenges, cruise lines continue to believe in China's long-term potential : introduction of Costa Venezia
August 5, 2019 | Slide 5
(Costa Cruises) and Spectrum of the Seas (RCCL) this year
Source: CLIA
TOP SOURCE SUBMARKETS
#2. China – 2.36 m
#1. United States – 13.09 m
#5. Australia – 1.35 m 15%
#6. Canada – 0.97 m
#10. Brazil – 0.51 m
#3. Germany – 2.23 m
2018
#4. UK – 1.96 m 25% 28.5 Million
60%
#7. Italy – 0.83 m
#9. France – 0.52 m
Americas
Europe
#8. Spain – 0.53 m
Asia/Pacific
August 5, 2019 | Slide 6
Source: CLIA – May 2019
NEW ORDERS TO EXCEL MARKET GROWTH
• Industry confirmed for a decade of solid steady growth
• Another record totaling 125 ships, valued at $ 68 billion
• Previous 3 years have all had record-breaking orderbooks, each year better than the last
• But still numerous smaller Expedition vessels
• Average capacity of ships on order is 2,254 passengers (2,360 passengers in 2018)
• Average tonnage of ships on order is 91,245 GT (94,670 GT in 2018)
140
Figures May 2019 125
120
100 104
91
80
67 70
60 57 60
53 51
49
45
40 39 38
34 34
29 28 26 29
22 22 24 23 21 25 23
20 17 21
14
8
August 5, 2019 | Slide 7
0
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
(Source : Cruise Industry News 2019 Annual Report)
DEMOLITION
• Few cruise vessels were scrapped over 2017 and 2018:
• 2 vessels scrapped in 2017: ‘Pacific Sun’ and ‘Island Escape’
• 1 vessel scrapped in 2018: Aegan Queen
• Number of 35-40 years old ships will start to be significant after 2030
• EU Ship Recycling Regulation (SRR) came into force on 31 December 2018 aiming at
making ship recycling greener and safer.
Vessel Pax Capacity 35-40 Years Old in 2030 Cumulated Pax Capacity
6000 800000
5000
Pacific Sun (built in 1986)
Source: Source: CdA 2019 Data Base
4000
Island Escape (built in 1982)
3000 400000
Aegan Queen (built in 1968)
2000
1000
0 0
August 5, 2019 | Slide 8
1960 1970 1980 1990 2000 2010 2020 2030
Year of Delivery
ORDERBOOK: SHIPBUILDING LANDSCAPE
In GT
• No new entrants nor consolidation of yards since last
year. Vard Others
CSSC 1.4% 3.6%
2.4%
MV Werften
• From 2019–2027, 88 % of cruise ship GT delivered 4.7%
from three European groups:
• Fincantieri
• Meyer Meyer Turku
11.8% Fincantieri
• Chantiers de l’Atlantique 38.7%
• Despite low GT figures, new entrants have a
significant number of vessels to build (43) Meyer Werft
15.8%
Chantiers de
l'Atlantique
21.6%
(*) Kleven,Uljanik, CMIH, Brodosplit, Ulstein, WestSea, De Hoop, Asenav, Barreras
August 5, 2019 | Slide 9
Source: Source: Chantiers de l’Atlantique 2019 Data Base
EXPEDITION VESSELS ON THE RISE
• 46 vessels to be delivered from 2019 to 2023, with 12 expedition ships to be in operation this year (out of 24
new passenger ships)
• 14 yards involved (from small to medium yards)
• Many delays declared and contracts at loss
• 2019 is a key year: is this segment sustainable or only temporary ?
14 Helsinki Shipyard
13
Uljanik
12
12 11 Fincantieri
West Sea
10 9 Vard
8 Ulstein
MV Werften
6 Mariotti
Kleven
4 3
2 2 De Hoop
2 1 1 1 Damen
CMIH
August 5, 2019 | Slide 10
0 Brodosplit
2010 2011 2013 2015 2018 2019 2020 2021 2022 2023 Asenav
CdA data base July 2019 (Orderbook – ref Cruise Industry News 2019)aseSIGNIFICANT CRUISE VESSELS IN 2018-2019
Chantiers de l’Atlantique – 129 500 GT Fincantieri – 152 050 GT
August 5, 2019 | Slide 11
Meyer Werft – 183 900 GT Vard – 9 900 GTTHE RISE OF LNG FUELED VESSELS
• IMO’s 2020 0.5% sulfur cap driving cleaner fuels for new orders
• Air emission concerns in ports
• New IMO CO2 emission reduction targets
• Uncertainties of future price of HFO/LSHFO/MGO
• Currently 1 full LNG cruise ship in operation; 15 full LNG cruise ships in 2022
• Challenge: LNG supply at all cruise areas
30 40%
35%
25
30%
20
25%
15 20%
15%
10
10%
5
6 5%
5 4 3
0 1 1 2 2 2 0%
August 5, 2019 | Slide 12
2018 2019 2020 2021 2022 2023 2024 2025 2026
LNG Confirmed Ships on order % of LNG Orders / Year
Source: Cruise Industry Orderbook – April 2019THE CRUISE ENVIRONMENT FOOTPRINT
• Public opinion tolerance to air emissions is decreasing rapidly in many
countries and NGOs getting more aggressive
August 5, 2019 | Slide 13
• Storms/Hurricanes,
• Ocean acidification, Sea level rise,
• Desertification, Droughts, snow storms
• Diseases, Human & animals mass migrations, etc…STATE OF THE CRUISE INDUSTRY
• Global cruise market continues to grow based on a strong American and European source markets; Asia-
Pacific market steady
• New destinations also contribute to market growth
• Asia-Pacific, Arctic, Middle East, Cuba
• Again, new record order book
• Market continuously evolving to improve product
• Clean energies (LNG, battery power, fuel cells)
• Guest experience and connectivity
• Like any industry, it is cyclical; any distressing event could initiate cycle downturn
• Supply / demand balance (ref. China in 2018)
• Destination and port congestion
• Ship wreck, natural disaster (ref. Viking Sky last April 2019)
• Geopolitical issues and nationalism (ref. Brexit, Cuba)
August 5, 2019 | Slide 14
• Environmental pressure
• Economical or credit crisis (ref. “Subprimes” 2008)FERRY MARKET
FERRY MARKET ORDERS ON THE RISE
• Ferry orders have increased over the last years to replace aging fleet
• 28 ferries (⩾ 150 m for European Shipowners) on orderbook from 2019 to 2022
• High number of ferries built in China:
• Guangzhou Shipyard International (Gotland, Moby, GNV, DFDS, ENTMV)
• AVIC Weihai (Stena, Brittany Ferries, DFDS)
• Xiamen (Viking)
• Huanghai (C-K Ferry)
• Nanjing Jinling Shipyard (Grimaldi)
Ferries on order by Shipyards from 2019 to 2022
Ferries order - (⩾ 150 m for European Shipowners
(⩾ 150 m for European Shipowners)
20 9 8 8
15 8
15 28 Ships
7
9 6
10 8
7
8 8
5 4
5 3 4
2
1 3 2
0 2 1 1 1 1 1 1
2014 2015 2016 2017 2018 2019 2020 2021 2022 1
0
August 5, 2019 | Slide 16
Source: Chantiers de l’Atlantique Industry DatabaseSIGNIFICANT FERRIES IN 2019-2020
Guangzhou (GSI)– Destination Gotland - 2019 Xiamen (XSI) – Viking - 2020
August 5, 2019 | Slide 17
Avic Wehai – Stena Lines - 2020 Jinling – Grimaldi - 2020STATE OF THE FERRY INDUSTRY
• Lack of orders in last decade due to high oil prices
• With lower oil prices Increased owner profitability Fleet replacement
• Environmental regulations also driving fleet replacement
• Scrubbers and catalytic converters
• Dual fuel MGO / LNG
• Hybrid technologies
• Strong international competition continues
• Chinese shipyards at the lead from 2019,
• But appears to be large price-cost discrepancy, especially when main equipment to be
purchased in Europe
August 5, 2019 | Slide 18This presentation and the information contained herein are property of Chantiers de l’Atlantique, and they cannot be reproduced, used or communicate, even partially, without the written consent by Chantier de l’Atlantique.
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