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Publication Title | Cruise Ship Owners Operators

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Cruise Ship Owners / Operators Preface

The AMEM Publication “Cruise Ship Owners/Operators and Passenger Ship Financing & Management Compa- nies” in fact is more than a directory!

Company co-ordinates

It is not only the most comprehensively and accurately structured listing of cruise ship owners and operators in the industry, despite the fact that the majority of cruise lines is more and more keeping both the company’s coordinates and the managerial staff secret.

The entire industry is obtrusively focused on selling their services weeks and months ahead of the specific cruise date, collecting the money at a premature stage and staying almost unattainable for their clients pre and after cruise requests. They simply ignore the fact that there are suppliers and partners around who wish to keep in touch personally at least with the cruise line’s technical and procurement departments!

The rest of the networking-information is camouflaged by the yellow-pages industry, which is facing a real prospect of extinction. The economic downturn is sending the already ailing business into a tailspin. The yellow-pages publishers basically give back in one downturn what took seven years to grow!

Cruise Ship Financing

It is more than a directory as it unveils the shift in the ship financing sector and uncovers how fast the traditional financiers to the cruise shipping industry fade away and perverted forms of financing are gaining ground.

Admittedly there are some traditional banks around, which can maintain their market position through a blend of sober judgements, judicious risk management and solid relationships. But like any other banking sector, careful assessment of potential borrowers is paramount. That means their equity standing, the cash buffers they have and the company cash flow. Money talks, of course, but a key parameter is also the evaluation of the senior management team. And size is also important, especially in the cruise sector. Small companies have less of a financial buffer if accidents occur in what is an increasingly challenging business environment!

With regard to size – always bear in mind that Carnival Corp. and Royal Caribbean Cruises Ltd. control up to 75 per cent of world’s gross cruise tonnage!

In todays oligopolistic mature cruise industry, in other words a situation where a handful of large firms account for a relatively large market share, the only way for a new cruise venture to succeed is to have very deep pockets – like MSC – or to meet a niche market demand – like Star Clipper, Seadream or Silversea Cruises. Gone are the growth years of the seventies, eighties and early nineties where the probabilities and rates of returns were a lot higher for start-ups. If you have no deep pockets, no market niche – you will have to find a reckless investment fund that is backed up by a steady flow of (preferably dirty) money.

Recent years have seen an explosion in environmental legislation, primarily driven by the US and the EU, with a focus on the environmental performance of ships and how ships impact on the marine ecosystems they inhabit.

The cruise industry is the most outsourced, non-US industry in America and the Western world! By registering their companies and cruise ships overseas to avoid labour, wage and safety laws, many foreign cruise lines also avoid income taxes. The fact of the matter is that all of the CLIA cruise lines operate their ships flying the flags of countries like the Bahamas, Panama or Liberia outside the scope of US or EU legislation with the exception of the ECAs Emission Control Areas in US and European waters.

A failure to adhere to the rigorous environmental standards set by IMO, EU and US regulatory bodies can result in strict financial penalties, which can in turn impact upon the models for evaluating the different companies.

Another issue that inflicts the risk for financiers is the case of an accident. Small companies can have major problems if there is an incident upon one of their ships – not just in terms of their set-up when it comes to tackling the issue itself, but also with respect to the damage it can do to their cash flow.

Cruise Ship Owners/Operators and Passenger Ship Financing & Management Companies


© 2013 by J. R. Kuehmayer · Austrian Marine Equipment Manufacturers – – Version 16

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