German luxury cruise operator Hapag-Lloyd Cruises will be a prime beneficiary of a renewed focus on the premium market by the TUI Group and its partner Royal Caribbean Cruises. The businesses have confirmed plans to ramp up their luxury, expedition and premium cruise segments as part of a strategy to lure new audiences to luxury cruise products.
Under the new venture, the former TUI Group subsidiary will be integrated into the TUI Cruises joint venture, a successful structure having been established by TUI and Royal Caribbean 12 years ago.
A contract signed in Hamburg last week values Hapag-Lloyd Cruises at €1.2 billion.
The new alliance has seen TUI and Royal Caribbean Cruises Ltd agree to further expand their partnership by using the proven joint venture structure of TUI Cruises across the luxury and expedition cruise segment.
TUI Group’s plans for the expansion of the Cruises segment will be expedited through the partnership. Due to limited global shipbuilding capacity, TUI Cruises’ Mein Schiff fleet are not scheduled for the next three new build deliveries until 2023, 2024 and 2026.
The merger of TUI Cruises and Hapag-Lloyd Cruises under the umbrella of the joint venture will create a leading European cruise company with a current combined fleet of twelve ships.
TUI Cruises and Hapag-Lloyd Cruises will continue to operate their product concepts in the future. TUI Cruises will continue to cater to the premium German-speaking segment and Hapag-Lloyd Cruises will continue to have an exclusive presence in the luxury and expedition ship segment.
“The ships’ identities, service, quality and customer experience will remain as individual and unique as they are today. This will create significant advantages for the Group, for our expansion and for our investments,” said TUI CEO Fritz Joussen.
Hapag-Lloyd Cruises fleet currently consists of two luxury ships within the five-star-plus category and three expedition cruise ships. A further expedition cruise ship has been ordered and will be added to Hapag-Lloyd Cruises’ fleet in 2021 to replace MS Bremen. In light of the transaction it is possible that the luxury and expedition fleet will grow in the coming years.
“Products and brands such as MS Europa and MS Europa 2 have international potential and appeal. Going forward, this will enable us as shareholders to take a capital-light approach to financing the ships and international growth within a joint venture framework.”
“TUI and Royal Caribbean Cruises have developed the joint venture company on the basis of a strong partnership over the past ten years. The expansion decision is the next big step of growth for us – from a strategic and a commercial perspective,” said Joussen.
Each partner will continue to leverage its core strengths: TUI’s strong brand and selling power combined with Royal Caribbean’s shipbuilding, operational and digital expertise.