Too much capacity in luxury cruise market?

Azmara boss warns overcapacity will hit market players
There is too much capacity coming into the luxury cruise market, the boss of Azamara Club Cruises warns – something he said would inevitably “drive prices down”.
Speaking at this year’s Clia conference in Southampton, chief executive Larry Pimentel was vocal in his concern about the amount of new tonnage entering the luxury sector.
“The luxury sector is seeing the most amazing growth that it has ever seen in its history,” he told delegates. “But it’s too much, too quickly, and it will drive down pricing.”
For agents, this is “an opportunity – and for your clients”. But the result would be damaging for the industry.
“There is too much capacity. […] It will drive it down.”
The increased volume will also likely have dire repercussions for the luxury cruise lines themselves, he warned.
“Within the next three years, I believe there will be cruise lines who will [be sold] or will merge, simply because they have to.”
New ship announcements include three new ships from Crystal Cruises, at least one and the potential for another from Scenic, two Viking ships already sailing with another four on order, one Silversea ship due in 2017, two new Seabourn ships due for delivery this year and in 2018, and four new ships on order by Ponant.
All this has hampered any growth ambitions for Azamara. “I believe the timing for new capacity [from Azamara] is wrong. I think there is too much coming. We have only two ships but we are a very profitable little company.”
TTG Digital

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