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 is spending US$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 will 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 had 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,” he 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 US$550 million in cash. Lim is not 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 is delving into the global industry’s top-end sector and making it even friendlier for the world’s richest cruisers. 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 has 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 is Madame Pinault, who fell in love with Ponant and its environmental bona fides 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 is costing the company about US$323 million and will carry 270 passengers when it is completed in 2021. “Shipbuilding is a capital-intensive undertaking,” reminds Bloomberg Intelligence’s Egger. While the romance and favourable 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% and 8% 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 all worth it, it is Hagen. A cruise industry executive, he 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.
Some industry bold-facers, such as MSC Cruises’ Gianluigi and Rafaela Aponte, find that owning ships is as much about passion as about 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. Now the world’s fourth-largest line, MSC benefits from Gianluigi’s technical shipbuilding knowledge — he is a former sea captain from Sorrento, Italy — as well as Rafaela’s design intuition. Daughter Alexa is chief financial officer of the MSC Group, which includes all the family’s holdings, while her husband, Pierfrancesco Vago, runs the cruise line as executive chairman. Gianluigi’s net worth is valued at US$8.1 billion, according to the Bloomberg Billionaires Index. The family has been busy. After launching a dozen mega-ships in the last 15 years, the company is in the midst of a second-wave, multibillion-dollar expansion. By 2026, it will have tripled its passenger capacity to more than five million guests (growing to 25 mega-ships) and risen from being Europe’s leading line to become the industry’s third-largest player (outranking Norwegian Cruise Line Holdings). Nobody thinks of cruising as a family business more than Arison does, though. His late father, Ted, founded Carnival Cruise Line in 1972. To this day, Arison has a significant stake in the publicly traded company, which has grown to be the industry’s largest player, with 10 brands and more than 100 ships around the world. “I would say that we have been living my dad’s dream for many years now,” he tells Bloomberg. “I have loved cruising for as long as I can remember — I have a special passion for shipbuilding, of course, but I enjoy every part of this industry.”
