Under Lim’s stewardship, Crystal has undergone a lightning-fast expansion. The company, which had just two ships at the time of acquisition, has bought and renovated an existing river ship, built four new, all-suite river vessels to sail the Danube and Rhine, added a charter jet service, purchased three shipyards, and ordered an additional ocean-and-expedition ship. It’s also renovated its two original products, Crystal Symphony and Crystal Serenity, reworking their overall footprints to add butler-serviced penthouse suites and offer additional space per passenger.
And there’s Madame Pinault, who fell in love with Ponant and its environmental bonafides on a cruise to Antarctica. She and her husband are leaning into the niche. In addition to the six expedition yachts, the Pinaults have also commissioned the world’s first electric-hybrid icebreaker powered by liquified natural gas. It’s costing the company about $323 million and will carry 270 passengers when it’s complete in 2021.
“Shipbuilding is a capital-intensive undertaking,” reminds Bloomberg Intelligence’s Egger. While the romance and favorable economics of the cruise industry are likely to continue to attract wealthy entrepreneurs, even those with ocean-deep pockets still face risks in the seafaring trade.
“Cruise sales are affected by swings in consumer discretionary demand and the price of fuel, the expense for which amounted to between 6 percent and 8 percent of Carnival’s sales in the past three years,” says Egger. Also, he notes, hurricanes, shipboard incidents, and geopolitical events can disrupt itineraries. “Fortunately for cruise operators, ships, unlike their land-based hospitality rivals, are mobile assets that can be redeployed to avoid stormy weather—both political and meteorological.”
Cruise-Made Billionaires
If anyone understands why cruising makes it’s all worth it, it’s Torstein Hagen.
A Norwegian-born cruise industry executive, Hagen took a big bet when he emptied his bank account in 1997 to purchase four river ships. The company he created to take North American tourists through Russia—Viking River Cruises—has since grown to 64 river ships, with an additional seven due next year. So large is the reach that nearly half of the North Americans who take a river cruise in Europe do so on one of his ships.
Today, Hagen is a cruise billionaire (after selling minority stakes in the business). His secret has been an all-inclusive fare that eliminates such standard upcharges as shore excursions and booze.
Just as important, he designs ships to his own persnickety tastes: They serve Norwegian salmon, his favorite food; have streamlined contemporary furnishings, because that’s what he likes; and have only square wastebaskets in guestrooms, because they’re better for catching wadded-up paper. The ensuing formula is endlessly replicable, with an appeal beyond rivers. Currently, Hagen is doubling the size of his five-ship ocean line that debuted in 2015, to rave reviews.
A newly minted cruise billionaire, Manfredi Lefebvre d’Ovidio, is one of Hagen’s best friends. In July, d’Ovidio sold a 66.7 percent stake of his ultra-luxury, expedition-focused Silversea Cruises to Royal Caribbean for about $1 billion.
For the Love of Seafaring
Some industry bold-facers, such as MSC Cruises’s Gianluigi and Rafaela Aponte, find that owning ships is as much about passion than profits. The couple, who made their fortune in the cargo-shipping business, launched MSC in 2003 as a way to further build on a family-held seafaring history that dates to the 17th century.