Virgin Group to Launch New Cruise Line Based in South Florida

Virgin Group to Launch New Cruise Line Based in South FloridaDec. 05, 2014 – With interests already in airlines, space tourism, hotels and trains, billionaire entrepreneur Richard Branson confirmed Thursday that his Virgin Group also has its sights set on the sea.

The Branson family’s investment group announced that it is partnering with investment firm Bain Capital to form Virgin Cruises, a South Florida-based company that plans to operate two ships. News about a possible cruise venture for Virgin had been floating around since March, when Branson told a newspaper in Abu Dhabi that he was seeking investors for a $1.7 billion ocean cruise project.

A representative for Virgin Group would not comment on financial details Thursday.

Tom McAlpin — a former president of Disney Cruise Line and, most recently, president and CEO of The World, Residences at Sea — was named CEO of Virgin Cruises.

“Cruise guests deserve something better and different to what is being offered today, and Virgin Cruises is committed to creating breathtaking experiences for them and a new generation of guests,” McAlpin said in a statement.

Beyond some basic facts, and the appointment of a CEO, few additional details were available, including how much the companies are investing in the startup line, who will build the ships, what size they will be or when they will set sail.

But from the statement’s headline to prepared quotes, the partners made it clear that they intend to “make waves” in an industry they believe is ready for reinvention.

“With a small number of global players, an experience in need of refreshing, and consumers ready for something new and exciting, the industry exhibits all the characteristics of one that is ripe for a new entrant,” Ryan Cotton, a principal with Bain Capital, said in the statement.

The world’s three largest cruise companies — Carnival Corp., Royal Caribbean Cruises and Norwegian Cruise Line Holdings, all based in Miami-Dade County — have been trying in their own ways to refresh the cruise experience by moving away from traditional dining and entertainment models and creating more activities and attention-grabbing amenities on board. Just last month, Royal Caribbean International introduced a new ship boasting a skydiving simulator and bumper cars; Thursday, Norwegian Cruise Line announced a new partnership with Margaritaville.

Still, Branson promised his company’s ships would offer “great quality, a real sense of fun, and many exciting activities all delivered with the famed Virgin service.”

“We plan to shake up the cruise industry and deliver a holiday that customers will absolutely love,” he said in the statement.

Nick Fox, Virgin Group director of external relations, elaborated in an email: “I think it’s best to presume that we will be bringing the Virgin sense of style, fun and adventure to the market. We will be looking to deliver real quality, in a more modern setting with more choice for the customer. We will also be trying to attract a broader market than traditionally goes cruising over time.”

Branson is known for the sometimes-wild antics of a showman: A few years ago, to mark the 25th anniversary of Virgin Atlantic’s first flight to South Florida, he arrived at a press conference via Cigarette boat to the theme song of Miami Vice. Wielding a fake gun and gold handcuffs, he made his way to a second speedboat and proceeded to pretend-arrest supermodel Karolina Kurkova.

“Richard Branson has a legacy of using creative marketing and has developed a travel empire while building sexy brands,” Vicky Garcia, chief operating officer and co-owner of Cruise Planners, an American Express Travel Representative, wrote in an email. “Branson’s innovations and entrepreneurial spirit will bring a fresh perspective to the industry and adding the Virgin Cruise brand into the mix will help drive healthy competition and consumer demand.”

But recently his ambitions have been marred by tragedy. During an October test flight for space tourism enterprise Virgin Galactic, a spaceship broke apart, killing the co-pilot and injuring the pilot. The Associated Press reported that the company might resume tests next summer.

In Thursday’s news, Virgin said “competitive reasons” kept it from revealing when the cruise line will start operating, but UBS Investment Research analyst Robin Farley wrote in a note to investors that she would not expect a new ship to be designed, built and launched earlier than 2018.

Farley wrote that some investors have worried about the potential impact of a new player in an industry that has struggled to raise prices amid a glut of supply in markets such as the Caribbean. She said similar concerns accompanied the establishment of Disney Cruise Line in 1998, an addition she called “a big positive for the industry” since it attracted first-time cruisers.

“While Virgin is not the powerhouse vacation brand that Disney is, we still believe it would attract more attention to the cruise market than the capacity it will represent,” she wrote.

Media Contact:
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