Clia UK’s deputy chair says he would “bet money” on ocean lines entering the river sector by buying brands and forming “super massive fleets”.
The notion of river lines being bought out by their larger neighbours in the ocean sector has gathered pace in recent months due to the escalating operating costs of being a new market entrant.
Private equity group Duke Street took over German river operator A-Rosa earlier this year – a sale which shows the attraction of the sector to investors outside the cruise industry.
Travel Weekly’s editor-in-chief Lucy Huxley put the question to a panel of John Fair, CroisiEurope’s UK sales director; Paul Melinis, APT’s UK regional director, and Clia’s Giles Hawke, who is also Avalon Waterways’ chief executive, at the Clia River Cruise Conference in Paris.
“I would bet money on the fact that there will be consolidation,” Hawke said. “I would bet money on the fact there will be consolidation and companies coming in and buying river cruise lines and forming super massive fleets.
“I would bet money on an ocean cruise line paying money for a river cruise line. It is only a question of when.”
Paul Melinis added that the market consolidation was “definitely going to happen” and Fair, CroisiEurope’s UK sales director, added: “Only time would tell.”
Melinis said: “There is certainly demand [for market consolidation].”
Debra Fox, APT’s chief commercial officer, told Travel Weekly that consolidation happens in any market.
“It is the way that it has always been,” she said. “Look at APT, we were a bus touring company and now we have ocean and river ships. The market constantly changes – it is evolution.”
However, Fox admitted that the river sector represented “a different financial proposition” to ocean.
“The ocean cruise lines are cruising with thousands of people,” she added. “River cruises lines sail with 25, 50, 100 people.”
Earlier, the panel dismissed pressures to build bigger river ships, explaining that fuel efficiency was more important when designing a vessel.
More: ‘Fuel efficiency will dictate river ship design’