It was a cold and cloudy July day in Reykjavik, and French arts patron Maryvonne Pinault was at a pier fulfilling her godmother duties for Le Laperouse, the first of six 184-passenger, upscale expedition yachts from her husband’s Marseilles-based cruise line Compagnie du Ponant. French billionaire and Kering SA chairman Francois Pinault wasn’t there to watch his wife smash a bottle of Champagne against the ship’s hull in the time-honored nautical tradition. But it was always going to be her ship more than his; buying the cruise company was Madame Pinault’s idea, after all.

In 2015, Pinault’s holding company, Groupe Artemis, acquired Ponant from Bridgepoint Capital for an undisclosed sum. Now the cruise line, which reports annual revenues of about $182 million, is part of a luxury portfolio that also includes Gucci, Christie’s auction house, and famed vineyard Château Latour. The Pinaults, by extension, are joining a tight-knit community of billionaires in the cruise industry, ranging from newcomer Richard Branson to industry forefather Micky Arison and the self-made Norwegian upstart, Torstein Hagen.

In an industry very much dominated by top players—Carnival Corp. and Royal Caribbean Cruises Ltd. control 70 percent of the market—it is mostly niche segments such as Ponant’s that are attracting wealthy entrepreneurs, says Brian Egger of Bloomberg Intelligence. Despite barriers to entry such as the cost and time it takes to build new ships, he says the industry can be a “good bet,” especially if you’re going after an underserved demographic.

The potential market is expansive. According to the Cruise Lines International Association trade group, cruising is a $126 billion industry with plenty of room to grow. Egger says that only about 20 percent of Americans have taken cruises, and the number is smaller for Europeans and smaller still for Asians. “It’s still a relatively under-penetrated sub-segment of the leisure and vacation market,” he says.

Get new cruisers on a ship, though, and they’re very likely to become return clients. So perhaps it’s no surprise that billionaires like Pinault are feeling the call of the seven seas.

New Investors at Sea
Branson identified one such niche before announcing his intention to start a cruise line in 2014: Virgin Voyages. With significant funding from Bain Capital, he’s spending $2.55 billion to build three adults-only ships for so-called “rebels with a cause,” starting with the 2,700-passenger Scarlet Lady, slated for completion in 2020. It’ll have a naked mermaid on its hull, mostly serving the Caribbean and employing a “Scarlet Squad” that promotes female leadership within the crew.

In an email from Genoa, Italy, where he was attending a shipyard event, Branson said he’d been thinking about the cruise industry for more than 40 years.

“At the age of 27, I was already dreaming of starting a cruise line despite never having been on a cruise,” Branson told Bloomberg. “What I had seen and heard about cruises sounded quite dull, so I figured I’d start my own.”

Meanwhile, Malaysian Chinese billionaire Lim Kok Thay, chairman of resorts and casinos company Genting Group, has been reshaping the luxury cruise market since he acquired Crystal Cruises from Japan’s Nippon Yusen Kabushiki Kaisha in 2015 for $550 million in cash. Lim isn’t as new to the cruise industry as Branson: His company also owns Asia’s Star Cruises and Dream Cruises and maintains a small stake in Norwegian Cruise Line. But with Crystal, he’s delving into the global industry’s top-end sector and making it even  friendlier for the world’s richest cruisers.

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