MSC Cruises Goes Ultra Luxury Targeting High Net Worth Travelers

Chances are good that people who care about cruises will have heard of MSC Cruises. After all, it might not be the biggest cruise operator that can be found out there, but it isn’t too far from it, seeing as how it occupies the number four position for the time being.

For those who are unfamiliar, MSC Cruises started out as Lauro Lines with a couple of cruise ships in 1960. Like most companies, it encountered both weal and woe, though the striking nature of some of those woes means that they tend to be much better-remembered than their counterparts. Eventually, Lauro Lines was bought out by the Mediterranean Shipping Company (MSC) in 1989, with the result that it was renamed StarLauro Cruises and then MSC Cruises.

In the present time, there can be no doubt about the fact that MSC Cruises occupies a very powerful position in its chosen industry. However, it is clear that it isn’t content with treading water, as shown by the fact that it is planning to expand into the ultra luxury market.

How Is MSC Cruises Planning to Expand Even Further?

In short, MSC Cruises has commissioned four new cruise ships from Fincantieri that will start seeing service in 2023, 2024, 2025, and 2026. Said ships will be used to offer an even more exclusive set of services for an even more exclusive clientele than the cruise operator’s current premium brand called The Yacht Club, though for understandable reasons, information is scarce at the moment save that the services will be personalized in nature.

Otherwise, some other small tidbits have been shared with interested individuals as well. For example, MSC Cruises is still partnering with De Jorio Design for the interior design of the cruise ships, meaning that interested individuals can expect something that will presumably be similar but not the same as the cruise operator’s current interiors for its premium brand. Likewise, it is interesting to note that the four ships will have a value of more than $2 billion euros, which is considerable sum to say the least. After all, one euro tends to have a higher value than one USD, as shown by the exchange rate of 1 euro to 1.12 USD as of April 3 of 2019.

It remains to be seen whether MSC Cruises will succeed at establishing its new brand for its new target. Certainly, it promises to be an interesting showcase of the economics of luxury goods if nothing else. For those who are unfamiliar with the concept, luxury goods are products and services that people consume more of when their income increases, so much so that such expenditures become a bigger proportion of their overall spending. Some people have been known to confuse the concept of luxury goods with the concept of Veblen goods, but this is inaccurate because the latter refers to products and services that see their demand go up when their price goes up, which is a blatant violation of the standard assumptions about the nature of demand. Certainly, the two overlap to a considerable extent, but they are by no means synonymous with one another.

In any case, the establishment of an ultra-luxury brand should be possible so long as MSC Cruises can implement its plan in the right manner. After all, while luxury goods do tend to be higher-quality than their non-luxury counterparts, much of their value lies in their prestige. As a result, it isn’t difficult to see why some consumers might be convinced to go for an ultra-luxury brand rather than a luxury brand with the right marketing, particularly if the ultra-luxury brand really does come with noticeable improvements as is being promised in this case.

Final Thoughts

With that said, what might be even more interesting is that these four new cruise ships are just one component of MSC Cruises’s expansion effort, which will cost more than 13 billion euros in total. This is a massive investment that is meant to bring the cruise operator’s fleet to 29 cruise ships by 2027, thus enabling it to expand its revenue intake by that much more. Considering that the general market for luxury goods is expected to continue rising for the near future, this does seem like a bold move that could very well pay off handsomely.



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