1 00:00:00,000 --> 00:00:01,300 You know, for the last 20 years 2 00:00:01,300 --> 00:00:02,580 or so, I feel like the cruise industry 3 00:00:02,580 --> 00:00:06,339 has been playing this very specific, 4 00:00:06,480 --> 00:00:08,419 very loud game of mine is bigger 5 00:00:08,419 --> 00:00:10,300 than yours. Oh, absolutely. The 6 00:00:10,300 --> 00:00:12,119 floating city era. Right. It was 7 00:00:12,119 --> 00:00:14,529 all about scale. Like if one line 8 00:00:14,529 --> 00:00:16,390 built a ship with a park, the next 9 00:00:16,390 --> 00:00:18,190 one built a ship with a literal 10 00:00:18,190 --> 00:00:19,969 mall inside. And then came the go 11 00:00:19,969 --> 00:00:21,230 -kart track. Go -kart tracks, the 12 00:00:21,230 --> 00:00:23,429 robotic bartenders, the indoor skydiving. 13 00:00:23,730 --> 00:00:25,329 It was this total one -size -fits 14 00:00:25,329 --> 00:00:26,410 -all approach where they just tried 15 00:00:26,410 --> 00:00:28,250 to cram every single demographic. 16 00:00:28,269 --> 00:00:30,289 From toddlers to retirees. Yeah, 17 00:00:30,570 --> 00:00:32,429 from toddlers and swim diapers to 18 00:00:32,429 --> 00:00:34,289 retirees playing bridge onto the 19 00:00:34,289 --> 00:00:36,469 exact same massive vessel and just 20 00:00:36,469 --> 00:00:37,509 kind of hoped everyone got along. 21 00:00:38,530 --> 00:00:40,289 It was essentially the department 22 00:00:40,289 --> 00:00:42,109 store model of travel everything 23 00:00:42,109 --> 00:00:45,250 for everyone all the time But if 24 00:00:45,250 --> 00:00:46,689 you look at the stack of research 25 00:00:46,689 --> 00:00:47,890 and the maritime reports we have 26 00:00:47,890 --> 00:00:50,429 on the desk for this deep dive That 27 00:00:50,429 --> 00:00:52,710 era isn't just fading. It is effectively 28 00:00:52,710 --> 00:00:55,119 over over Completely. We are watching 29 00:00:55,119 --> 00:00:56,820 the industry fresher into these 30 00:00:56,820 --> 00:00:58,560 incredibly specific niches. And 31 00:00:58,560 --> 00:01:00,439 that's exactly what we're unpacking 32 00:01:00,439 --> 00:01:02,320 today. We aren't looking at cruising 33 00:01:02,320 --> 00:01:04,319 as this giant monolith anymore. 34 00:01:04,799 --> 00:01:06,920 We've got three very specific stories 35 00:01:06,920 --> 00:01:08,719 to get into. Very different stories. 36 00:01:08,879 --> 00:01:10,780 Right. One from a shipyard in Germany, 37 00:01:11,180 --> 00:01:12,659 one from a port in northern China, 38 00:01:12,879 --> 00:01:14,299 and one from the headquarters of 39 00:01:14,299 --> 00:01:16,359 Virgin Voyages. And together, they 40 00:01:16,359 --> 00:01:18,260 show how the industry is hyper -specializing. 41 00:01:18,659 --> 00:01:20,319 It's no longer about building the 42 00:01:20,319 --> 00:01:21,659 biggest ship. It's about building 43 00:01:21,659 --> 00:01:23,900 the exact right ship. for a very 44 00:01:23,900 --> 00:01:25,760 specific slice of humanity. And 45 00:01:25,760 --> 00:01:27,500 the contrasts are just stark. I 46 00:01:27,500 --> 00:01:29,480 mean, we have Carnival basically 47 00:01:29,480 --> 00:01:30,680 admitting that a roller coaster 48 00:01:30,680 --> 00:01:32,180 might not be the best use of deck 49 00:01:32,180 --> 00:01:34,400 space. We have a Chinese operator 50 00:01:34,400 --> 00:01:36,280 turning a mineral transport logistics 51 00:01:36,280 --> 00:01:38,379 network into a tourism empire. Which 52 00:01:38,379 --> 00:01:40,560 is wild. Right. And then we have 53 00:01:40,560 --> 00:01:42,480 the adults -only model making so 54 00:01:42,480 --> 00:01:43,859 much money that it is literally 55 00:01:43,859 --> 00:01:45,959 forcing legacy lines to rewrite 56 00:01:45,959 --> 00:01:47,920 their own rule books. So let's start 57 00:01:47,920 --> 00:01:49,079 with the hardware, because I know 58 00:01:49,079 --> 00:01:50,239 you love the engineering side of 59 00:01:50,239 --> 00:01:51,879 things. We are going to Pappenberg, 60 00:01:51,879 --> 00:01:55,120 Germany. Ah, the Meyer Werft shipyard. 61 00:01:55,400 --> 00:01:57,659 Yes, Meyer Werft. If you listener 62 00:01:57,659 --> 00:01:59,620 have ever seen those crazy photos 63 00:01:59,620 --> 00:02:02,040 of massive cruise ships being built 64 00:02:02,040 --> 00:02:04,260 indoors, it's usually there. And 65 00:02:04,260 --> 00:02:05,519 they are currently putting together 66 00:02:05,879 --> 00:02:07,780 the carnival festival which is a 67 00:02:07,780 --> 00:02:09,560 massive deal this is the fourth 68 00:02:09,560 --> 00:02:12,379 ship in their excel class now usually 69 00:02:12,379 --> 00:02:13,800 by the time you get to the fourth 70 00:02:13,800 --> 00:02:16,400 ship in a class the excitement kind 71 00:02:16,400 --> 00:02:17,620 of dies down a bit because it's 72 00:02:17,620 --> 00:02:19,159 just a copy paste of the previous 73 00:02:19,159 --> 00:02:21,199 ones by just stamping them out exactly 74 00:02:21,199 --> 00:02:23,500 but the festival is different they 75 00:02:23,500 --> 00:02:25,599 are making significant changes to 76 00:02:25,599 --> 00:02:27,419 the physical structure itself and 77 00:02:27,419 --> 00:02:28,659 the construction updates coming 78 00:02:28,659 --> 00:02:30,560 out of pappenberg are pretty wild 79 00:02:30,560 --> 00:02:32,199 they just hit a major milestone 80 00:02:32,199 --> 00:02:33,780 they lifted the bridge into place 81 00:02:33,780 --> 00:02:36,199 but In the shipyard, they don't 82 00:02:36,199 --> 00:02:37,639 call it the bridge. They call it 83 00:02:37,639 --> 00:02:40,759 Block 68. Block 68. It sounds so 84 00:02:40,759 --> 00:02:42,639 mundane. But you have to understand 85 00:02:42,639 --> 00:02:44,759 the scale here. The bridge of a 86 00:02:44,759 --> 00:02:46,620 modern mega ship isn't just a room 87 00:02:46,620 --> 00:02:48,060 with steering wheel and some windows. 88 00:02:48,120 --> 00:02:50,680 No, it's huge. It is a massive multi 89 00:02:50,680 --> 00:02:52,919 deck slice of the ship's superstructure. 90 00:02:53,419 --> 00:02:55,300 It houses all the navigation equipment, 91 00:02:55,419 --> 00:02:56,620 the captain's quarters, critical 92 00:02:56,620 --> 00:02:58,539 safety systems. It is incredibly 93 00:02:58,539 --> 00:03:00,120 heavy. How heavy are we actually 94 00:03:00,120 --> 00:03:01,860 talking? Well, to lift it onto the 95 00:03:01,860 --> 00:03:03,580 hull, they had to use a specific 96 00:03:03,580 --> 00:03:06,479 800 ton crane called the Kaiser 97 00:03:06,479 --> 00:03:09,020 Radler. The Imperial Eagle. That 98 00:03:09,020 --> 00:03:10,719 is a serious name for a piece of 99 00:03:10,719 --> 00:03:12,319 machinery. It absolutely needs to 100 00:03:12,319 --> 00:03:14,449 be. The block itself weighs roughly 101 00:03:14,449 --> 00:03:17,349 the same as 500 midsize sedans. 102 00:03:17,349 --> 00:03:18,629 Wow. And they aren't just lifting 103 00:03:18,629 --> 00:03:19,830 it up and dropping it on top. They 104 00:03:19,830 --> 00:03:21,349 have to thread a needle with it. 105 00:03:21,810 --> 00:03:23,330 The shipyard released some data 106 00:03:23,330 --> 00:03:24,689 on the precision involved here, 107 00:03:24,689 --> 00:03:27,129 and it is mind boggling. They positioned 108 00:03:27,129 --> 00:03:29,770 this massive steel block within 109 00:03:29,770 --> 00:03:32,030 three ten thousands of one percent 110 00:03:32,030 --> 00:03:33,590 of the ship's total length. OK, 111 00:03:33,650 --> 00:03:35,370 hang on. Three ten thousands of 112 00:03:35,370 --> 00:03:36,990 one percent. Yeah. Why does it need 113 00:03:36,990 --> 00:03:38,370 to be that precise? I mean, it's 114 00:03:38,370 --> 00:03:39,629 a ship that's what, three hundred 115 00:03:39,629 --> 00:03:41,370 and forty five point three nine 116 00:03:41,370 --> 00:03:43,449 meters long. If they're off by an 117 00:03:43,449 --> 00:03:44,530 inch or two, does it really matter? 118 00:03:44,789 --> 00:03:46,969 It matters immensely. You have to 119 00:03:46,969 --> 00:03:48,629 think of a ship like a living organism. 120 00:03:48,770 --> 00:03:50,610 It has veins and arteries. Like 121 00:03:50,610 --> 00:03:52,409 plumbing and stuff. Exactly. Pipes 122 00:03:52,409 --> 00:03:55,150 for water sewage fuel and massive 123 00:03:55,150 --> 00:03:56,849 bundles of electrical cabling running 124 00:03:56,849 --> 00:03:58,530 from the engine room all the way 125 00:03:58,530 --> 00:04:00,409 up to the bridge. And these are 126 00:04:00,409 --> 00:04:02,389 all prefabricated inside the blocks. 127 00:04:02,750 --> 00:04:04,770 If block 68 is off by two inches, 128 00:04:05,590 --> 00:04:07,580 those pipes don't line up. Oh man. 129 00:04:07,740 --> 00:04:09,719 Yeah, you can't just shove a steel 130 00:04:09,719 --> 00:04:11,479 block into place. If you miss that 131 00:04:11,479 --> 00:04:13,219 alignment, you are talking about 132 00:04:13,219 --> 00:04:16,220 weeks of cutting steel and re -welding 133 00:04:16,220 --> 00:04:19,160 to fix the connections. It's a hugely 134 00:04:19,160 --> 00:04:20,899 expensive disaster. So it's not 135 00:04:20,899 --> 00:04:22,800 just welding a box on top, it's 136 00:04:22,800 --> 00:04:24,360 literally connecting the brain to 137 00:04:24,360 --> 00:04:26,079 the nervous system. Precisely. And 138 00:04:26,079 --> 00:04:27,300 they nailed it. And they're moving 139 00:04:27,300 --> 00:04:29,019 incredibly fast, too. The report 140 00:04:29,019 --> 00:04:30,639 from EMS Precab. They're the ones 141 00:04:30,639 --> 00:04:31,899 building the cabins, right? Right, 142 00:04:31,959 --> 00:04:33,660 the cabin builders. They reported 143 00:04:33,660 --> 00:04:37,100 they've already finished 949 crew 144 00:04:37,100 --> 00:04:39,899 cabins in just 25 weeks. That seems 145 00:04:39,899 --> 00:04:41,920 insanely fast. How do you build 146 00:04:41,920 --> 00:04:43,600 almost a thousand bedrooms in six 147 00:04:43,600 --> 00:04:45,759 months? Modular construction. They 148 00:04:45,759 --> 00:04:47,779 build the cabins in a factory nearby. 149 00:04:48,240 --> 00:04:50,810 The beds, the lights, the... carpets, 150 00:04:50,889 --> 00:04:52,430 everything is installed. And then 151 00:04:52,430 --> 00:04:53,850 they just slide them into the ship 152 00:04:53,850 --> 00:04:55,709 like drawers in a dresser. Wow. 153 00:04:55,850 --> 00:04:57,350 And now they're moving to serial 154 00:04:57,350 --> 00:04:59,449 production of the passenger cabins. 155 00:04:59,670 --> 00:05:01,050 Over twenty six hundred of them 156 00:05:01,050 --> 00:05:02,569 for a ship that will have a maximum 157 00:05:02,569 --> 00:05:04,269 capacity of over sixty six hundred 158 00:05:04,269 --> 00:05:06,470 guests. It's roughly one hundred 159 00:05:06,470 --> 00:05:08,110 and eighty three thousand gross 160 00:05:08,110 --> 00:05:10,649 tons. But here is where the story 161 00:05:10,649 --> 00:05:13,430 shifts from cool engineering to 162 00:05:13,430 --> 00:05:15,730 actual business strategy. You mentioned 163 00:05:15,730 --> 00:05:17,170 earlier that this is the fourth 164 00:05:17,170 --> 00:05:19,889 Excel class ship. The previous three 165 00:05:20,060 --> 00:05:21,420 The Mardi Gras, the Celebration, 166 00:05:21,480 --> 00:05:24,220 the Jubilee, they all have one very 167 00:05:24,220 --> 00:05:26,740 specific, very famous feature on 168 00:05:26,740 --> 00:05:28,459 the top deck. The Bolt. Right, the 169 00:05:28,459 --> 00:05:30,839 Bolt. The first roller coaster at 170 00:05:30,839 --> 00:05:33,120 sea. It was a massive deal. It was 171 00:05:33,120 --> 00:05:35,139 huge news. Every commercial carnival 172 00:05:35,139 --> 00:05:37,579 ran, showed people screaming on 173 00:05:37,579 --> 00:05:38,959 a roller coaster in the middle of 174 00:05:38,959 --> 00:05:40,560 the ocean. It was their main differentiator. 175 00:05:40,959 --> 00:05:42,560 But on the Festival, it's gone. 176 00:05:42,899 --> 00:05:44,500 Completely scrapped. So why did 177 00:05:44,500 --> 00:05:46,540 it break? Was it unsafe? No, no, 178 00:05:46,540 --> 00:05:48,879 it worked fine. But you have to 179 00:05:48,879 --> 00:05:50,620 look at the economics of a roller 180 00:05:50,620 --> 00:05:52,680 coaster versus what they're replacing 181 00:05:52,680 --> 00:05:54,939 it with. A roller coaster has terrible 182 00:05:54,939 --> 00:05:56,040 throughput. You can only get so 183 00:05:56,040 --> 00:05:58,259 many people on it per hour. It breaks 184 00:05:58,259 --> 00:05:59,839 down sometimes. It requires intense 185 00:05:59,839 --> 00:06:00,839 maintenance. And honestly, once 186 00:06:00,839 --> 00:06:02,160 you ride it once or twice, are you 187 00:06:02,160 --> 00:06:03,560 really going to ride it every single 188 00:06:03,560 --> 00:06:06,060 day of your seven day cruise? Probably 189 00:06:06,060 --> 00:06:07,600 not. It's totally a one and done 190 00:06:07,600 --> 00:06:09,980 kind of thing. Exactly. It's a marketing 191 00:06:09,980 --> 00:06:11,540 hook to get you to book the trip, 192 00:06:11,740 --> 00:06:13,139 but it doesn't keep you occupied 193 00:06:13,139 --> 00:06:14,680 for hours once you're on board. 194 00:06:15,100 --> 00:06:16,339 Now look at what they are replacing 195 00:06:16,339 --> 00:06:18,860 it with. An expanded Carnival Waterworks 196 00:06:18,860 --> 00:06:20,459 park, and more importantly what 197 00:06:20,459 --> 00:06:22,139 they're calling immersive music 198 00:06:22,139 --> 00:06:24,100 spaces. Immersive music spaces? 199 00:06:25,319 --> 00:06:26,839 Which kind of sounds like marketing 200 00:06:26,839 --> 00:06:28,579 speak for a really nice bar with 201 00:06:28,579 --> 00:06:30,339 a band. It is, but think about the 202 00:06:30,339 --> 00:06:32,480 revenue generation. A music venue 203 00:06:32,480 --> 00:06:34,399 holds hundreds of people at once. 204 00:06:34,740 --> 00:06:36,139 They sit there for two, maybe three 205 00:06:36,139 --> 00:06:39,399 hours. They buy drinks. They socialize. 206 00:06:39,560 --> 00:06:40,959 They come back the next night because 207 00:06:40,959 --> 00:06:42,120 the band is playing a different 208 00:06:42,120 --> 00:06:44,420 set. Right. The repeat value is... 209 00:06:44,160 --> 00:06:46,379 Way higher. Carnival president Christine 210 00:06:46,379 --> 00:06:48,199 Duffy called music the universal 211 00:06:48,199 --> 00:06:50,279 language. But the business translation 212 00:06:50,279 --> 00:06:53,339 here is that music is a sticky amenity. 213 00:06:53,560 --> 00:06:55,720 Sticky. Yeah. It keeps people in 214 00:06:55,720 --> 00:06:57,560 the revenue generating zones of 215 00:06:57,560 --> 00:06:59,360 the ship much longer than a two 216 00:06:59,360 --> 00:07:00,759 minute roller coaster ride ever 217 00:07:00,759 --> 00:07:02,519 could. That is fascinating. So they 218 00:07:02,519 --> 00:07:04,300 hooked us with a thrill ride on 219 00:07:04,300 --> 00:07:05,560 the first three ships established 220 00:07:05,560 --> 00:07:07,680 the whole brand identity. And now 221 00:07:07,680 --> 00:07:09,079 they're optimizing the fourth ship 222 00:07:09,079 --> 00:07:11,240 for actual guest behavior and onboard 223 00:07:11,240 --> 00:07:13,740 revenue. Precisely. They are shifting 224 00:07:13,740 --> 00:07:16,180 from, look at this crazy mechanical 225 00:07:16,180 --> 00:07:17,699 thing we have, to look at this vibe 226 00:07:17,699 --> 00:07:20,100 we created. And for you, the listener, 227 00:07:20,259 --> 00:07:22,759 this ship launches on May 19th, 228 00:07:22,819 --> 00:07:24,839 2027 out of Port Canaveral. Doing 229 00:07:24,839 --> 00:07:26,139 the Caribbean runs, right? Yep. 230 00:07:26,339 --> 00:07:28,519 Classic Caribbean in Bahamas, including 231 00:07:28,519 --> 00:07:30,180 stops at the new Celebration Key. 232 00:07:30,439 --> 00:07:31,980 So if you want the coaster, you 233 00:07:31,980 --> 00:07:33,560 book the Mardi Gras. If you want 234 00:07:33,560 --> 00:07:35,300 the immersive music and the huge 235 00:07:35,300 --> 00:07:36,800 water park, you book the festival. 236 00:07:37,319 --> 00:07:39,120 It's specialization within the exact 237 00:07:39,120 --> 00:07:41,300 same fleet. OK, so that's the American 238 00:07:41,300 --> 00:07:43,439 giant tweaking its formula. Now, 239 00:07:43,500 --> 00:07:45,180 I want to fly halfway across the 240 00:07:45,180 --> 00:07:47,379 world to China because there is 241 00:07:47,379 --> 00:07:49,279 a fascinating pivot happening there 242 00:07:49,279 --> 00:07:50,600 that I don't think many people in 243 00:07:50,600 --> 00:07:51,759 the West are really paying attention 244 00:07:51,759 --> 00:07:54,360 to. Oh, the Tianjin Oriental International 245 00:07:54,360 --> 00:07:56,259 cruise story. And if you thought 246 00:07:56,259 --> 00:07:57,899 carnival swapping out a roller coaster 247 00:07:57,899 --> 00:07:59,740 was a big retrofit, wait until you 248 00:07:59,740 --> 00:08:00,639 hear what these guys are doing. 249 00:08:00,759 --> 00:08:01,720 Right, because they aren't building 250 00:08:01,720 --> 00:08:03,100 a new ship. No, they bought a used 251 00:08:03,100 --> 00:08:05,240 one. They acquired a vessel they're 252 00:08:05,240 --> 00:08:07,540 calling the Vision, which they delayed 253 00:08:07,540 --> 00:08:09,500 the maiden voyage of to March 3rd, 254 00:08:09,579 --> 00:08:12,300 2026. But any cruise nerd listening 255 00:08:12,300 --> 00:08:13,860 to this will know this ship by its 256 00:08:13,860 --> 00:08:16,209 former name, the Costa Magica. Oh, 257 00:08:16,269 --> 00:08:17,730 wow. The Costa Magica that was built 258 00:08:17,730 --> 00:08:20,250 back in 2004. Yeah. It's a Joe Farkas 259 00:08:20,250 --> 00:08:22,009 design. Yeah. Very colorful, very 260 00:08:22,009 --> 00:08:24,610 Italian, lots of neon and distinct 261 00:08:24,610 --> 00:08:27,589 shapes. It is a very, very specific 262 00:08:27,589 --> 00:08:29,370 aesthetic. And right now it is sitting 263 00:08:29,370 --> 00:08:32,230 in the Kingdow Bay High Heavy Industry 264 00:08:32,230 --> 00:08:34,909 Shipyard undergoing a massive transformation. 265 00:08:35,110 --> 00:08:36,929 They aren't just changing the carpet 266 00:08:36,929 --> 00:08:38,950 in the hallways. They are fundamentally. 267 00:08:40,299 --> 00:08:41,960 reprogramming the ship. Reprogramming 268 00:08:41,960 --> 00:08:43,340 it for who, though? For what they 269 00:08:43,340 --> 00:08:44,620 call the northern strategy. See, 270 00:08:44,620 --> 00:08:45,860 when we talk about the Chinese cruise 271 00:08:45,860 --> 00:08:47,419 market, everyone always talks about 272 00:08:47,419 --> 00:08:49,460 Shanghai. Shanghai is basically 273 00:08:49,460 --> 00:08:52,480 the Miami of China. It's huge. It's 274 00:08:52,480 --> 00:08:55,320 glitzy. And it is absolutely packed 275 00:08:55,320 --> 00:08:57,340 with competition. Royal Caribbean 276 00:08:57,340 --> 00:08:59,059 is there. Adora Cruise is there. 277 00:08:59,279 --> 00:09:01,240 It's a shark tank. So Tianjin Oriental 278 00:09:01,240 --> 00:09:02,320 is basically saying we don't want 279 00:09:02,320 --> 00:09:03,899 to fight the sharks. Exactly. They 280 00:09:03,899 --> 00:09:05,679 are moving north. They are basing 281 00:09:05,679 --> 00:09:07,519 the vision in Tianjin and their 282 00:09:07,519 --> 00:09:09,600 other ship, the Dream. places like 283 00:09:09,600 --> 00:09:11,960 Dalian and Qingdao. They are targeting 284 00:09:11,960 --> 00:09:13,899 a massive population in northern 285 00:09:13,899 --> 00:09:15,960 China that is vastly underserved. 286 00:09:16,120 --> 00:09:17,259 It's like an American cruise line 287 00:09:17,259 --> 00:09:19,100 deciding to just skip Miami and 288 00:09:19,100 --> 00:09:21,639 Fort Lauderdale entirely to dominate 289 00:09:21,639 --> 00:09:23,159 the market out of Philadelphia or 290 00:09:23,159 --> 00:09:25,139 Boston. That is a perfect analogy. 291 00:09:25,720 --> 00:09:27,179 And because they're targeting a 292 00:09:27,179 --> 00:09:29,080 totally different demographic, specifically 293 00:09:29,080 --> 00:09:30,919 multigenerational Chinese families, 294 00:09:31,460 --> 00:09:33,340 the hardware of the ship has to 295 00:09:33,340 --> 00:09:35,399 change. You can't just run a loud 296 00:09:35,399 --> 00:09:37,340 Italian party ship for a Chinese 297 00:09:37,340 --> 00:09:39,139 grandmother and her grandkids. So 298 00:09:39,139 --> 00:09:40,840 what does that refit actually look 299 00:09:40,840 --> 00:09:43,379 like in practice? It's deep. They're 300 00:09:43,379 --> 00:09:44,940 ripping out bars that would be super 301 00:09:44,940 --> 00:09:46,399 popular in Europe and replacing 302 00:09:46,399 --> 00:09:48,299 them with traditional tea houses 303 00:09:48,299 --> 00:09:51,440 or mahjong rooms. The dining spaces 304 00:09:51,440 --> 00:09:53,000 are getting a complete overhaul. 305 00:09:53,000 --> 00:09:55,139 to feature local northern Chinese 306 00:09:55,139 --> 00:09:57,000 cuisine. But honestly, the most 307 00:09:57,000 --> 00:09:58,340 interesting part of the story isn't 308 00:09:58,340 --> 00:10:00,240 the ship itself, it's the owner. 309 00:10:00,559 --> 00:10:02,059 Tangshan Oriental Shipping. Yeah, 310 00:10:02,080 --> 00:10:02,799 I looked them up with the notes. 311 00:10:03,100 --> 00:10:04,360 They are at a hospitality company. 312 00:10:04,399 --> 00:10:05,860 Not at all. They move minerals. 313 00:10:06,159 --> 00:10:07,679 They're an industrial shipping firm. 314 00:10:07,840 --> 00:10:09,539 Which sounds incredibly odd, Reidy. 315 00:10:10,200 --> 00:10:12,100 You'd think, what do guys who move 316 00:10:12,100 --> 00:10:13,980 coal and iron ore know about running 317 00:10:13,980 --> 00:10:15,679 a floating resort? I mean, yeah, 318 00:10:15,700 --> 00:10:16,980 it seems like a completely different 319 00:10:16,980 --> 00:10:19,200 skill set. Yeah. It is on the surface. 320 00:10:19,600 --> 00:10:21,120 But think about the underlying supply 321 00:10:21,120 --> 00:10:23,389 chain. A cruise line is essentially 322 00:10:23,389 --> 00:10:25,409 a massive logistics company that 323 00:10:25,409 --> 00:10:27,529 also happens to serve food and entertainment. 324 00:10:28,129 --> 00:10:30,190 Tangshan Oriental already has the 325 00:10:30,190 --> 00:10:32,230 docks. They have the fuel contracts, 326 00:10:32,409 --> 00:10:34,669 the maritime tracking systems, the 327 00:10:34,669 --> 00:10:36,250 relationships with the port authorities. 328 00:10:36,509 --> 00:10:37,549 They have all the hard infrastructure 329 00:10:37,549 --> 00:10:39,950 figured out. Exactly. Buying the 330 00:10:39,950 --> 00:10:41,470 ship and hiring hotel directors 331 00:10:41,470 --> 00:10:43,549 is the easy part for them. It shows 332 00:10:43,549 --> 00:10:45,750 how incredibly diverse capital is 333 00:10:45,750 --> 00:10:46,830 entering the cruise space right 334 00:10:46,830 --> 00:10:48,389 now because they see the profit 335 00:10:48,389 --> 00:10:50,409 potential. And they're expanding 336 00:10:50,409 --> 00:10:52,360 fast. They have the vision, the 337 00:10:52,360 --> 00:10:54,259 dream, and they're introducing another 338 00:10:54,259 --> 00:10:56,120 ship called the Ideal, which is 339 00:10:56,120 --> 00:10:57,379 formally intended for the Neonix 340 00:10:57,379 --> 00:10:59,720 brand. And part of that profit potential 341 00:10:59,720 --> 00:11:01,360 comes from removing friction for 342 00:11:01,360 --> 00:11:03,220 the passenger. You mentioned something 343 00:11:03,220 --> 00:11:04,659 in the research about visa -free 344 00:11:04,659 --> 00:11:05,860 travel. Can we break that down? 345 00:11:05,940 --> 00:11:07,480 Why is that such a massive unlock 346 00:11:07,480 --> 00:11:09,899 for this market? This is the killer 347 00:11:09,899 --> 00:11:11,600 app of their entire business model. 348 00:11:12,000 --> 00:11:13,840 They are running six -day itineraries 349 00:11:13,840 --> 00:11:15,799 to South Korea. Places like Busan, 350 00:11:15,879 --> 00:11:18,539 Jeju, Incheon. Now typically international 351 00:11:18,539 --> 00:11:20,139 travel for a Chinese citizen can 352 00:11:20,139 --> 00:11:22,399 involve complex visa applications 353 00:11:22,399 --> 00:11:24,559 fees, long waiting periods. It's 354 00:11:24,559 --> 00:11:26,080 a ton of friction. Right. Nobody 355 00:11:26,080 --> 00:11:27,259 wants to go stand at an embassy 356 00:11:27,259 --> 00:11:28,620 just to take a family vacation. 357 00:11:28,860 --> 00:11:30,980 Exactly. But these specific cruise 358 00:11:30,980 --> 00:11:32,759 itineraries are designed around 359 00:11:32,759 --> 00:11:34,539 visa free travel. You show up at 360 00:11:34,539 --> 00:11:36,919 the port in Tianjin with your passport. 361 00:11:37,299 --> 00:11:39,000 You get on the ship. You visit Korea. 362 00:11:39,059 --> 00:11:41,639 You come back. It turns an international 363 00:11:41,639 --> 00:11:43,460 vacation into something as easy 364 00:11:43,460 --> 00:11:45,460 as taking a bus to the next town. 365 00:11:45,779 --> 00:11:47,860 That is huge for multi -generational 366 00:11:47,860 --> 00:11:49,100 families. It is a game changer. 367 00:11:49,200 --> 00:11:51,179 And the pricing reflects that exact 368 00:11:51,179 --> 00:11:53,059 accessibility. Their entry level 369 00:11:53,059 --> 00:11:56,100 fares are starting around 2499 Chinese 370 00:11:56,100 --> 00:11:57,779 yuan. Which is very affordable. 371 00:11:58,100 --> 00:11:59,519 Highly affordable. They are going 372 00:11:59,519 --> 00:12:01,779 for sheer volume. They want the 373 00:12:01,779 --> 00:12:04,059 first time cruiser, the retirees, 374 00:12:04,500 --> 00:12:05,799 the huge families who have never 375 00:12:05,799 --> 00:12:08,000 been to sea before. While Carnival 376 00:12:08,000 --> 00:12:09,519 is fighting tooth and nail for the 377 00:12:09,519 --> 00:12:10,919 premium traveler in the Caribbean. 378 00:12:11,830 --> 00:12:14,090 Tangent Oriental is building a regional 379 00:12:14,090 --> 00:12:16,450 bus service at sea. And I honestly 380 00:12:16,450 --> 00:12:17,730 mean that as a compliment. It's 381 00:12:17,730 --> 00:12:19,649 incredibly smart business. It really 382 00:12:19,649 --> 00:12:20,789 highlights that there isn't just 383 00:12:20,789 --> 00:12:22,610 one single cruise market. There 384 00:12:22,610 --> 00:12:24,909 are dozens of them operating simultaneously. 385 00:12:25,970 --> 00:12:27,370 But speaking of markets, let's pivot 386 00:12:27,370 --> 00:12:28,990 to the one that is currently just 387 00:12:28,990 --> 00:12:31,529 printing money. The one that explicitly 388 00:12:31,529 --> 00:12:33,769 bans the exact target audience of 389 00:12:33,769 --> 00:12:35,450 that Tianjin ship. The adults -only 390 00:12:35,450 --> 00:12:36,929 movement. We have to talk about 391 00:12:36,929 --> 00:12:38,690 Virgin Voyages. Because every time 392 00:12:38,690 --> 00:12:39,830 we look at their earnings reports 393 00:12:39,830 --> 00:12:41,389 lately, the graph just goes straight 394 00:12:41,389 --> 00:12:42,950 up. It's unbelievable. They just 395 00:12:42,950 --> 00:12:45,669 reported that January 2026 was the 396 00:12:45,669 --> 00:12:47,610 highest booking month in the company's 397 00:12:47,610 --> 00:12:50,590 entire history. Wow. And 2025 saw 398 00:12:50,590 --> 00:12:52,570 a nearly 30 % increase in gross 399 00:12:52,570 --> 00:12:55,250 ticket revenue and a 20 % rise in 400 00:12:55,250 --> 00:12:57,370 overall bookings. But the key phrase 401 00:12:57,370 --> 00:12:58,850 they use in the release is that 402 00:12:58,850 --> 00:13:00,840 they're are sailing at, quote, full 403 00:13:00,840 --> 00:13:02,700 commercial load. Full commercial 404 00:13:02,700 --> 00:13:04,480 load. Translate that for us. Does 405 00:13:04,480 --> 00:13:05,879 that just mean every single cabin 406 00:13:05,879 --> 00:13:07,679 is full? It means every cabin is 407 00:13:07,679 --> 00:13:09,639 full, yes, but it implies a lot 408 00:13:09,639 --> 00:13:11,200 more than just head count. It means 409 00:13:11,200 --> 00:13:12,580 they are hitting their absolute 410 00:13:12,580 --> 00:13:15,039 maximum revenue potential per passenger. 411 00:13:15,440 --> 00:13:16,820 See, a ship full of families is 412 00:13:16,820 --> 00:13:19,379 great, but kids don't buy $15 martinis. 413 00:13:19,679 --> 00:13:21,100 They don't sit down and play blackjack 414 00:13:21,100 --> 00:13:22,600 for three hours. Right. They don't 415 00:13:22,600 --> 00:13:26,159 book $200 spa treatments. Bingo. 416 00:13:26,940 --> 00:13:29,700 A ship with 2 ,500 adults generates 417 00:13:29,700 --> 00:13:31,879 vastly more onward revenue than 418 00:13:31,879 --> 00:13:34,080 a ship with 2 ,000 adults and 500 419 00:13:34,080 --> 00:13:36,519 kids. The profit margins on an adults 420 00:13:36,519 --> 00:13:38,320 -only ship are naturally just so 421 00:13:38,320 --> 00:13:39,799 much better if you can actually 422 00:13:39,799 --> 00:13:41,759 fill the rooms. And Virgin is clearly 423 00:13:41,759 --> 00:13:43,519 filling them. They are packing them 424 00:13:43,519 --> 00:13:46,200 in. Their CEO, Nirmal Sivarimutu, 425 00:13:46,299 --> 00:13:48,000 said, quote, kid -free travel is 426 00:13:48,000 --> 00:13:50,100 not a niche category, it's a movement. 427 00:13:50,559 --> 00:13:51,860 And looking at the broader economic 428 00:13:51,860 --> 00:13:54,100 numbers, he's not wrong. The adult 429 00:13:54,100 --> 00:13:55,679 -only travel market is projected 430 00:13:55,679 --> 00:13:58,240 to literally double from $9 .2 billion 431 00:13:58,240 --> 00:14:01,620 in 2024 to $18 .1 billion by 2033. 432 00:14:05,740 --> 00:14:07,960 The idea of a week where I literally 433 00:14:07,960 --> 00:14:09,720 cannot hear a single tantrum at 434 00:14:09,720 --> 00:14:11,419 the pool is very, very appealing. 435 00:14:11,559 --> 00:14:12,940 It kind of sells itself. It really 436 00:14:12,940 --> 00:14:14,179 does. People just want to switch 437 00:14:14,179 --> 00:14:16,120 off and reconnect. And Virgin has 438 00:14:16,120 --> 00:14:17,500 finally completed their initial 439 00:14:17,500 --> 00:14:19,399 fleet rollout. The fourth ship, 440 00:14:19,500 --> 00:14:21,200 the Brilliant Lady, launched late 441 00:14:21,200 --> 00:14:24,519 in 2025. So they now have four identical 442 00:14:24,519 --> 00:14:26,740 sisters sailing globally. Scarlet 443 00:14:26,740 --> 00:14:28,419 Valiant, Resilient, and Brilliant. 444 00:14:28,639 --> 00:14:29,919 And they really lean into the model, 445 00:14:30,159 --> 00:14:32,059 too. No main dining room, no buffet. 446 00:14:32,379 --> 00:14:34,580 Over 20 included eateries, hammocks 447 00:14:34,580 --> 00:14:37,100 on the terraces. Exactly. But because 448 00:14:37,100 --> 00:14:38,919 this model is working so undeniably 449 00:14:38,919 --> 00:14:40,600 well, the competition is starting 450 00:14:40,600 --> 00:14:42,700 to panic. Or at least they are starting 451 00:14:42,700 --> 00:14:44,480 to aggressively copy it. So who 452 00:14:44,480 --> 00:14:45,799 is jumping on the bandwagon here? 453 00:14:45,919 --> 00:14:47,700 O'Shaena Cruz has just made a massive 454 00:14:47,700 --> 00:14:49,659 move. Effective for all bookings, 455 00:14:49,820 --> 00:14:52,740 after January 7th, 2026, their entire 456 00:14:52,740 --> 00:14:54,759 fleet is going 18 plus. The whole 457 00:14:54,759 --> 00:14:56,299 fleet, that is a huge risk for a 458 00:14:56,299 --> 00:14:57,799 legacy line to just cut out families 459 00:14:57,799 --> 00:14:59,840 completely. It is a calculated risk. 460 00:14:59,919 --> 00:15:01,620 They looked at their internal demographics 461 00:15:01,620 --> 00:15:03,440 and realized, you know, we aren't 462 00:15:03,440 --> 00:15:05,200 really serving families that well 463 00:15:05,200 --> 00:15:07,399 anyway, so let's just fully lean 464 00:15:07,399 --> 00:15:09,820 into the adult market. Even Carnival, 465 00:15:10,019 --> 00:15:11,059 the fun ship line, the one with 466 00:15:11,059 --> 00:15:13,279 the Dr. Seuss breakfasts, they are 467 00:15:13,279 --> 00:15:16,250 adding specific kid -free transatlantic 468 00:15:16,250 --> 00:15:18,750 and Mediterranean voyages in 2026. 469 00:15:19,049 --> 00:15:19,950 Just dipping their toe in the water. 470 00:15:20,210 --> 00:15:21,649 Right. And you see major design 471 00:15:21,649 --> 00:15:23,730 changes, too. Lines like Norwegian 472 00:15:23,730 --> 00:15:25,990 with their spice H2O areas and Royal 473 00:15:25,990 --> 00:15:27,909 Caribbean with the solarium. They 474 00:15:27,909 --> 00:15:29,710 are physically expanding their adult 475 00:15:29,710 --> 00:15:31,230 only zones, even on their giant 476 00:15:31,230 --> 00:15:33,129 family focused ships. Wait, I saw 477 00:15:33,129 --> 00:15:34,769 a counterpoint in the source material 478 00:15:34,769 --> 00:15:37,309 today. P &O cruises. They are doing 479 00:15:37,309 --> 00:15:39,230 the exact opposite. Yes. And this 480 00:15:39,230 --> 00:15:40,809 is why I love following this industry 481 00:15:40,809 --> 00:15:43,379 right now. It's 4D chess. P &O announced 482 00:15:43,379 --> 00:15:44,620 they are actually opening their 483 00:15:44,620 --> 00:15:46,340 traditionally adult -only ships, 484 00:15:46,600 --> 00:15:48,620 the Aurora and the Arcadia, to families 485 00:15:48,620 --> 00:15:51,159 starting in December 2026. That 486 00:15:51,159 --> 00:15:52,840 seems crazy. Everyone else is rushing 487 00:15:52,840 --> 00:15:54,559 toward no kids and P &O is standing 488 00:15:54,559 --> 00:15:55,820 there saying bring them all on. 489 00:15:56,009 --> 00:15:58,009 It seems counterintuitive, but think 490 00:15:58,009 --> 00:15:59,389 about the market dynamics for a 491 00:15:59,389 --> 00:16:01,950 second. If Virgin Oceania Viking 492 00:16:01,950 --> 00:16:04,149 Saga, if they are all viciously 493 00:16:04,149 --> 00:16:05,649 fighting for the adults only crowd, 494 00:16:05,809 --> 00:16:07,629 that space is suddenly getting very 495 00:16:07,629 --> 00:16:09,850 crowded. Meanwhile, if you are a 496 00:16:09,850 --> 00:16:11,690 family who wants a premium, traditional 497 00:16:11,690 --> 00:16:13,570 British cruise experience. Like 498 00:16:13,570 --> 00:16:15,309 not a megaship with water slides, 499 00:16:15,350 --> 00:16:17,549 but a real classic ship. Exactly. 500 00:16:17,610 --> 00:16:19,129 Where do you go? You really don't 501 00:16:19,129 --> 00:16:20,929 have many options left. Exactly. 502 00:16:21,509 --> 00:16:24,289 Pino sees a massive vacuum. They 503 00:16:24,289 --> 00:16:25,919 are zagging while... Everyone else 504 00:16:25,919 --> 00:16:27,799 zigs. They are betting that there 505 00:16:27,799 --> 00:16:29,899 is a premium family market that 506 00:16:29,899 --> 00:16:32,220 is being completely ignored by this 507 00:16:32,220 --> 00:16:35,000 gold rush to ban kids. It's a brilliant 508 00:16:35,000 --> 00:16:36,690 counter move. It all comes back 509 00:16:36,690 --> 00:16:38,769 to that main theme of specialization. 510 00:16:39,110 --> 00:16:40,509 It feels like the days of just calling 511 00:16:40,509 --> 00:16:42,529 a travel agent and booking a quote 512 00:16:42,529 --> 00:16:44,769 unquote cruise are totally gone. 513 00:16:44,909 --> 00:16:46,330 You have to really know exactly 514 00:16:46,330 --> 00:16:48,009 what you are buying. You do. You 515 00:16:48,009 --> 00:16:49,450 have to audit your own desires as 516 00:16:49,450 --> 00:16:51,049 a trailer. Because if you book the 517 00:16:51,049 --> 00:16:52,789 Carnival Festival expecting an adrenaline 518 00:16:52,789 --> 00:16:54,269 roller coaster, you'll be disappointed. 519 00:16:54,610 --> 00:16:56,470 If you book the Tianjin Oriental 520 00:16:56,470 --> 00:16:58,450 Ship expecting a quiet library and 521 00:16:58,450 --> 00:17:00,370 a burger, you'll be shocked by the 522 00:17:00,370 --> 00:17:02,210 bustling mahjong rooms and the regional 523 00:17:02,210 --> 00:17:04,410 cuisine. And if you book Virgin 524 00:17:04,410 --> 00:17:06,220 expecting a traditional captain's 525 00:17:06,220 --> 00:17:08,039 dinner in a tuxedo, you're going 526 00:17:08,039 --> 00:17:09,460 to be very confused by the drag 527 00:17:09,460 --> 00:17:11,400 brunch. Right. It puts the burden 528 00:17:11,400 --> 00:17:13,039 on the consumer to be informed. 529 00:17:13,359 --> 00:17:15,079 But it also means you are so much 530 00:17:15,079 --> 00:17:16,460 more likely to find a product that 531 00:17:16,460 --> 00:17:18,559 actually fits you perfectly. The 532 00:17:18,559 --> 00:17:20,019 average cruise passenger just doesn't 533 00:17:20,019 --> 00:17:22,099 exist anymore. The industry finally 534 00:17:22,099 --> 00:17:24,019 realized that trying to please everyone 535 00:17:24,019 --> 00:17:26,200 usually results in a mediocre experience 536 00:17:26,200 --> 00:17:28,180 for everyone. So we had the vibe 537 00:17:28,180 --> 00:17:29,940 shift in Germany moving from mechanical 538 00:17:29,940 --> 00:17:31,980 thrills to social spaces. We have 539 00:17:31,980 --> 00:17:33,599 the regional utility and family 540 00:17:33,599 --> 00:17:35,819 focus in China. and we have the 541 00:17:35,819 --> 00:17:37,740 adult escape going global with virgin. 542 00:17:38,859 --> 00:17:40,319 Before we wrap up this deep dive, 543 00:17:40,460 --> 00:17:41,680 I want to ask you, where does this 544 00:17:41,680 --> 00:17:44,180 go next? If adults only is now a 545 00:17:44,180 --> 00:17:46,759 mainstream category, What is the 546 00:17:46,759 --> 00:17:48,119 next hyper niche we're going to 547 00:17:48,119 --> 00:17:49,119 see? I've been thinking about this 548 00:17:49,119 --> 00:17:50,579 a lot, actually. The shipbuilding 549 00:17:50,579 --> 00:17:52,519 technology is allowing for smaller, 550 00:17:52,759 --> 00:17:54,740 much more efficient ships now. I 551 00:17:54,740 --> 00:17:56,200 genuinely wonder if we will see 552 00:17:56,200 --> 00:17:57,940 the rise of the dedicated remote 553 00:17:57,940 --> 00:17:59,839 work ship. Oh, like a floating digital 554 00:17:59,839 --> 00:18:02,640 nomad colony. Exactly. Rip out the 555 00:18:02,640 --> 00:18:04,579 giant casino, which, honestly, millennials 556 00:18:04,579 --> 00:18:06,299 and Gen Z aren't using as much anyway, 557 00:18:06,460 --> 00:18:08,039 and put in a massive high -tech 558 00:18:08,039 --> 00:18:10,119 co -working space. Give it fiber 559 00:18:10,119 --> 00:18:12,400 optic satellite internet. Have the 560 00:18:12,400 --> 00:18:13,880 ship stay in port for three or four 561 00:18:13,880 --> 00:18:15,339 days at a time so you can work your 562 00:18:15,400 --> 00:18:17,259 hours during the day and explore 563 00:18:17,259 --> 00:18:18,839 a new city at night. I would sign 564 00:18:18,839 --> 00:18:21,099 up for that in a heartbeat. No vacation 565 00:18:21,099 --> 00:18:23,000 days used, but I wake up in Lisbon. 566 00:18:23,160 --> 00:18:24,940 Sign me up immediately. Right. Or 567 00:18:24,940 --> 00:18:27,160 maybe even ships dedicated to hyper 568 00:18:27,160 --> 00:18:29,319 -specific music genres. We have 569 00:18:29,319 --> 00:18:31,500 theme cruises now, like the 80s 570 00:18:31,500 --> 00:18:32,960 rock cruise, but those are just 571 00:18:32,960 --> 00:18:34,720 temporary charter rentals on regular 572 00:18:34,720 --> 00:18:36,839 ships. Could we see a small ship 573 00:18:36,839 --> 00:18:38,940 that is permanently built as a jazz 574 00:18:38,940 --> 00:18:41,259 club at sea, designed acoustically 575 00:18:41,259 --> 00:18:42,980 from the hull up for that exact 576 00:18:42,980 --> 00:18:45,890 purpose? Wow. The segmentation really 577 00:18:45,890 --> 00:18:47,789 is just getting started. It is such 578 00:18:47,789 --> 00:18:49,470 a fascinating time to watch these 579 00:18:49,470 --> 00:18:51,170 billion dollar bets play out across 580 00:18:51,170 --> 00:18:52,609 the globe. It certainly is. Well, 581 00:18:52,609 --> 00:18:53,829 listener, I want you to think about 582 00:18:53,829 --> 00:18:55,490 it. If you had a boarding pass in 583 00:18:55,490 --> 00:18:57,730 your hand tomorrow, which gangway 584 00:18:57,730 --> 00:18:59,509 are you walking up? Are you heading 585 00:18:59,509 --> 00:19:01,009 for the high tech musical party 586 00:19:01,009 --> 00:19:02,970 on the festival, the easy access 587 00:19:02,970 --> 00:19:04,670 family trip on the vision or the 588 00:19:04,670 --> 00:19:06,470 kid free sanctuary on the brilliant 589 00:19:06,470 --> 00:19:08,490 lady? Let us know what you think. 590 00:19:09,289 --> 00:19:10,549 Thanks for diving in with us today 591 00:19:10,549 --> 00:19:12,089 and we will catch you on the next 592 00:19:12,089 --> 00:19:12,269 one.