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Winning together in a changing world

With the speed of innovation accelerating and radical changes on the way, cruise lines, their destinations, shipyards and the entire supply industry may be entering the most exciting decade in their history.

A global order book comprising more than 90 vessels, and growing - the cruise business has never before seen such exciting times. Contrary to the logic of other segments of the shipping industry, the cruise sector's success hinges upon its ability to grow its share in the leisure industry and attract new passengers. The only true limiting factor is yard capacity. DNV GL expects new yards to open both in Europe and Asia over the next five to ten years, which will further boost growth.

The speed of innovation heats up

Innovation in cruise ship building occurs in two dimensions: marine technology innovation, which involves all efforts to make ships more fit for purpose, energy efficient and cost-efficient; and passenger-facing innovation, which develops new features to make the "product" more attractive to passengers and targets new passenger segments. There are dramatic improvements on both sides: technically, the shipbuilding industry is making giant strides towards improving fuel performance, developing new fuels and engine technologies. At the same time line operators and shipbuilders are carefully observing new trends and searching forever new ideas to innovate the passenger experience and offer on-board entertainments never seen before.

Until recently ship design was, to a large extent, the domain of naval architects, and cruise ships in general used to look fairly similar. Today exciting new developments come from designers from outside the maritime industry. While the naval architect will always play a key role, there is a growing need for inspiration from other sources. Unconventional thinking will be key in the innovation of future cruise vessels, both with respect to traditional naval architecture and interior design. DNV GL as a class society has stepped up its cooperation with innovators to make sure new concepts can be realized within the maritime framework. The industry is likely to see more "signature" designs going forward, and individual design features will be the intellectual property of the respective owner, not the yard, and be an important factor in attracting passengers.

Identifying competitive advantages

Public awareness of climate change related to human activity is growing steadily around the world. The cruise industry must continue its effort to reduce emissions. Since ships - much like aeroplanes - have no other choice than to store large amounts of energy on board, they are excluded from certain non-fossil energy sources that are available to land-based consumers, such as wind, tidal and hydroelectric energy. Nuclear energy harbours too many risks and lacks public acceptance. Therefore it is difficult to foreverroad map the energy future of shipping. Two areas need to be addressed simultaneously: tuning the effectiveness of technical solutions and operational practices, which will optimize short-term profit, and continuing the search for more environment-friendly fuels and engine configurations thus ensuring long-term success. All this amounts to a major challenge not only for cruise lines but also for engine manufacturers, the suppliers of the power plants for tomorrow's cruise ships. Conceivably new suppliers will position themselves for this market, going head to head with the established engine manufacturers.

The exploration vessel segment looks poised for dramatic changes. The current order book for exploration vessels is more than seven times the capacity of one of the historic market leaders, Lindblad Expeditions. Luxury features are entering this segment, and vessels are becoming larger. The new tonnage will enhance the passenger experience, while larger ship sizes will enable better profit margins and a lower price point. A key success factor for larger cruise vessels will be better solutions for passenger logistics.

As a new, more competitive fleet takes over, older tonnage will increasingly get "stranded". A look at the price point for Antarctic expeditions during the coming season reveals a tendency that is indicative of coming changes. Quite possibly, other niches of the cruise market will also see a revitalization, such as the ultra-luxury market and the destination segment. In addition, nobody should be surprised to see new residential vessels being contracted.

Digitalization drives efficiency and safety

Good data connectivity to shore has always been important for cruise ships. Therefore this segment will lead the drive to digitalize the maritime world. Fleet operational centres, which are being established everywhere, will profoundly change the way fleets are managed, allowing operators to track vessel performance in real time and pinpoint improvement opportunities.

Autonomous technologies will redefine bridge operation and be a step change in safety performance. Barrier management, introduced to the maritime industry over the last decade, will benefit from digitalization by enabling real-time barrier monitoring. The vision of "zero major maritime accidents" has never been closer. Digital technology will also allow cruise lines to interact with their passengers in much more sophisticated ways -pre, during and post voyage.

DNV GL pursues all these challenges and opportunities with passion, always seeking to help owners, yards and suppliers succeed. Realizing that "one size doesn't fit all", DNV GL has been tailoring its services to the specific client over the last years. Being flexible and able to challenge current ways of working while continuously adapting to a changing environment harbours great value for both sides.

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