symphony of the seas

COVID-19 and the £1 billion cruise ship

The cruise industry has been hit hard by COVID-19.

Whilst during a trip to the southern coast of the UK this summer I saw 10 large ships moored up off the coast. I think they’re still there.

I imagine it’s a similar picture in many of the world’s harbours.

When you start playing with the numbers of cruising, you quickly realise two things. 1. They’re big. 2. You’ll need a calculator.

The Symphony of the Seas the world’s largest cruise ship by gross tonnage (228,081 GT) measures 361.011 metres in length, cost £959m ($1.35bn) to build, has 18 decks, is able to accommodate 5,518 passengers at double occupancy up to a maximum capacity of 6,680 passengers, as well as a 2,200-person crew.

A week in the Ultimate Family Suite sells for between $20,000 (low season) and $80,000 (Christmas week).

It’s owner Royal Caribbean suspended all service across most of its fleet, including Symphony of the Seas, until September of this year (2020).

How much have cruise operators fortunes changed during the COVID-19 pandemic?

Methodology

At the moment cruise operators are all offering some incentives to attract passengers.

I managed to find an old price list from Royal Caribbean with 2018-2019 prices to get an idea of pre-pandemic prices.

The Symphony of the Seas operates around the world. I used the “starting from” prices for a 9 night cruise (cruise only) around the western Caribbean.Symphony

Results

Cruise cost (2018-19)

Download chart.

Cruise Only
Interior £1,099
Promenade £1,199
Ocean View £1,299
Balcony £1,499
Suites £2,399

Full table.

Estimated Revenue (2018-19)

Symphony of the Seas 9 night cruise (cruise only) Western Caribbean (2018-19 Prices) revenue share by room type

Download chart.

Type Cruise Only Estimated Percentage of rooms Passengers (100% occupancy) Cruise Revenue
Interior £1,099 0.40 2672 £2,936,528
Promenade £1,199 0.30 2004 £2,402,796
Ocean View £1,299 0.16 1069 £1,388,371
Balcony £1,499 0.10 668 £1,001,332
Suites £2,399 0.04 267 £641,013

Full table.

Assuming the above breakdown of room types, prices, and passengers (100% occupancy), the estimated ticket revenue alone for Royal Caribbean is £8,370,040.

Symphony of the Seas 9 night cruise (cruise only) Western Caribbean (2018-19 Prices) revenue estimations

Download chart.

Ticket Revenue (GBP)
100% occupancy £8,370,040.00
90% occupancy £7,533,036.00
80% occupancy £6,696,032.00
70% occupancy £5,859,028.00

Full table.

Let’s assume 80% occupancy as a best-case; £6,696,032, that the ship bills this, on average, for all cruises (it operates other routes), and that the ship is operating with passengers onboard 80% of the year (365 *0.8 = 292 days).

This means the cruise can be operated 32 times a year (292/9 days), giving an estimated income of £214,273,024 per year. Ignoring all operating costs (which will be high — the ship has over 2000 staff onboard), the ship will bill enough in ticket revenue to cover its cost (£959m) in just under 4 years (£959,000,000/£214,273,024).

Pre-COVID.

Assuming cruises were not operating for 5 months (150 days / 12 potential cruises) that’s an estimated £80,352,384 (£6,696,032*12) of lost revenue from this ship alone. Royal Caribbean has 26 ships.

Let’s assume that the both the occupancy rate drops to 40% (estimated revenue £3,348,016) — because ticket costs might not come down — AND that the amount of cruises are reduced by 50% to 16 times a year (16*£3,348,016), reducing revenues to £53,568,256 per year.

When you’re dealing with big numbers, even small changes can have a dramatic impact. It’s clear the cruise industry, like almost all travel industries is in for some very hard time ahead, even if these calculations are not

Improvements

This post contains very rough calculations, from estimated revenues to operational times of the ship.

It also completely ignores operating costs, which must be massive for a cruise ship.

Both of which would make immediate improvement to this post.

tl;dr

Pre-COVID 19 the world’s largest cruise ship, the Symphony of the Seas, could have billed around £7 million in passenger ticket revenue for a 9 day cruise. Revenues could easily be half this figure currently.

Footnotes

  1. Data sources + data used in this post.
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