MercoPress. South Atlantic News Agency

Hanover TUI line orders new vessels as Germany is set to become Europe's main cruise market

CEO Joussen said TUI will expand in hotels and cruise ships, and is merging with TUI Travel Plc (TT/), Europe’s largest tour operator

Germany's TUI Cruises, a joint venture of TUI AG and Royal Caribbean Cruises Ltd. are planning to spend as much as 2 billion Euros for four new vessels to meet increased European demand for cruise holidays. TUI Cruises expects Germany to overtake the UK as Europe's largest cruise market.

TUI Cruises ordered two 2,500-passenger ships for delivery in 2016 and 2017 from the Finnish arm of STX Corp. (011810) in Turku, with options for another two vessels, the company said in a statement.

If those options are exercised, the deals would be worth about 2 billion Euros for STX and would double TUI Cruises’ fleet to eight ships, Finnish Economy Minister Jan Vapaavuori said in Helsinki.

Demand for cruises is prompting Hanover, Germany-based TUI to expand its fleet, as Germany is set to overtake the U.K. as Europe’s largest cruise market. Chief Executive Officer Friedrich Joussen has said TUI will expand in hotels and cruise ships. The company is merging with TUI Travel Plc (TT/), Europe’s largest tour operator, in which it has a majority stake.

“In Germany and in Europe the interest in cruises is increasing. The Mein Schiff fleet of TUI Cruises has set a new premium standard in the market and it won new target groups for cruise holidays. The ships are excellently booked to capacity and the company is growing. TUI Cruises and its vessels are a pivotal pillar for our differentiation and growth strategy. Cruises meet the trend and are being discovered by new customer segments” said CEO Friedrich Joussen.

At the presentation of the TUI AG half-year results Joussen had already called the prospects for the cruise segment as highly attractive and alluded to an expansion of the Mein Schiff fleet. This expansion is now being turned into action with the two vessels on order.

Only recently, in June 2014, the Mein Schiff 3 as the first new-build of the fleet was commissioned by TUI Cruises. Already prior to the launching ceremony on 12 June, the vessel had been nearly fully booked.The two additional cruise vessels are on order and expected for delivery as soon as 2016 and 2017.

The new cruise liners will be sister ships of the previous new-builds Mein Schiff 3 and Mein Schiff 4: 295 meters long spanning 15 decks with 1,250 cabins. The majority of the “well-being” ship’s cabins, 90 per cent, will be outside cabins with 82 per cent having balconies. The 97,000 Gross Registered Tons (GRT) new build will carry approximately 2,500 guests based on double occupancy.