PHOTO: The Celebrity Century is being sold to a Chinese travel company. (Courtesy of Celebrity Cruises)
Royal Caribbean Cruises Ltd. plans to sell the 1,814-passenger Celebrity Century, to a Chinese travel company called Ctrip. The 1995-built vessel will leave the Celebrity Cruises fleet in April.
"Since its inaugural sailing, Celebrity Century has created many wonderful memories for hundreds of thousands of guests, and we expect this successful history to continue as she transitions to the Chinese cruise market," RCCL Chairman and CEO Richard D. Fain said in a press release. "The vessel's sale is an excellent business opportunity for both Royal Caribbean and Ctrip, and will generate strong value for both companies' shareholders."
Celebrity previously announced that the Century would leave its fleet in April and scheduled several farewell cruises, including one with President and CEO Michael Bayley. It appeared to be headed for RCCL's French cruise line, CDF Croisières de France, but now is off to Asia.
In its own press release, Ctrip said it has entered into a memorandum of understanding with RCCL to form a joint venture to manage the ship and "potentially broaden the relationship."
"China is becoming one of the largest cruise markets in the world," Ctrip President Min Fan said. "As the largest cruise agency in China, Ctrip has sent over 120,000 guests to cruise trips so far and acquired more than 10 percent of market share in China. We are excited about the strong growth of the cruise industry and strive to strengthen our leadership in this market."
China clearly is a hot market. Royal Caribbean International earlier this year revealed plans to move its highly anticipated new ship, the 4,180-passenger, 167,800-ton Quantum of the Seas, to Shanghai, China, in April, about six months after it begins sailing from Bayonne, N.J. Rival Carnival Corp. plans to deploy one Princess and three Costa ships in Shanghai in 2015, increasing its capacity in China by 140 percent from 2013.
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Before it enters the China market, the Century will be renovated "to provide an outstanding cruise experience to China's leisure travelers," Min Fan said.
The Century was the first in Celebrity's Century-class of ships and was hailed as a modern, beautiful ship when it was introduced. It gained positive attention for its cutting-edge art collection, ice-topped martini bar and an alternative restaurant with tableside preparation.
Other members of the Century class have already left the fleet - the Galaxy and Mercury now operate for TUI Cruises, an RCCL joint venture with German travel company TUI AG.
While the price was not disclosed, cruise analyst Robin M. Farley of UBS Investment Research estimated it at $157 million, which "seems not a bad price compared to other 20-year-old ship sales, assuming the ship was significantly underperforming the fleet EBITDA average, which it probably was given that the 1995-built Century was the oldest ship in Celebrity fleet."
Farley also again noted the significance of the growing Chinese cruise market as a "positive trend" for the industry, adding that "we wouldn't be surprised to see more asset sales to China over time."
"Given the long-term potential for China to be a major force in the cruising market, much as it has in the lodging industry (where China is now the second biggest market for Marriott outside of the U.S.), we believe the emergence of China as a major sourcing market can provide new demand for tonnage that can be redeployed from more mature markets like North America, which could also potentially drive pricing in that existing market as tonnage goes to emerging markets, a benefit unique to the cruise market, as hotel supply cannot be 'redeployed,' " Farley wrote.
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The Century's final voyage for Celebrity will be its March 22 itinerary. The 15-night Dubai-to-Rome sailing on April 5 is being redeployed to a 14-night sailing from Dubai to Singapore. Guests booked on the voyage can cancel for a full refund or move to an alternative sailing with an onboard credit and compensation to cover air change fees. Celebrity said it is contacting those guests, although they and their travel agents can 888-283-7275 with questions.
Celebrity Century joined the Celebrity fleet in December 1995. The 71,545-ton ship was built by Meyer Werft in Papenburg, Germany.
Ctrip.com International Ltd. is a provider of accommodation reservations, transportation ticketing, packaged tours and corporate travel management in China. Shanghai-based Ctrip also books vacation packages and guided tours. Since its inception in 1999, Ctrip has grown substantially and is a well-known travel brand in China.
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