Saudi Arabia, the Middle-Eastern powerhouse, is turning its eyes towards the cruise industry and spending billions of dollars upgrading its cruise hub and infrastructure.
And in an interesting move, the country is eyeing off purchasing luxury line Seabourn, which is currently owned by the Carnival Corporation.
Reports from America say the cruise giant is in preliminary discussions to sell the ultra-luxury cruise brand to the Saudi sovereign wealth fund. According to CNBC, talks between the two parties are still ongoing and a deal of this size would give the Saudis a stronger footprint in the cruise industry, at a time when travel continues to rebound across the Middle East.
The deal would also give Carnival access to more capital, since its shares have lost over 40 per cent in the past three months and the company, after two years without revenue during the pandemic cruise pause, badly needs cash.
Last week, Carnival Corp. was hitting the borrowing market offering of US$1 billion in senior unsecured notes. Before that, the company debts amounted to about US$35 billion.
Saudi funds already have more than eight per cent of Carnival shares.
The price tag is for Seabourn is the problem,
CNBC reporter Seema Moody shared that the Public Investment Fund of Saudi Arabia is a ready and willing buyer.
A spokesperson for Carnival Corporation told Cruise Industry News: “We don’t comment on rumour and speculation.”
It’s been long known in the industry that Saudi Arabia has been looking to invest in cruise, meaning the rumours don’t come as a surprise.
Saudi Arabia has already developed ports and put cruising infrastructure into place, continuing to fuel the rumours. Their public investment also already has a significant stake in Carnival Corporation.
Part of the public investment fund’s goals is to generate money through non-oil projects for Saudi Arabia, aiming to attract tourist sand international cruise ships to Saudi Arabia.
It isn’t yet known if Carnival would be looking to begin a joint venture with Cruise Saudi or an outright sale of the Seabourn brand.
Seabourn was founded in Norway in 1988, before being fully acquired by Carnival in 2001.
Seabourn has a seven ship luxury fleet, including two new expedition ships either in operation or about to be. It has a large slice of the American luxury market – a big attraction for the Saudis.
Seabourn says of its brand: “With their unmatched sense of style, elegance and grace, Seabourn luxury cruise ships beckon you to travel beyond the bounds of the imagination. On board Seabourn, every desire is met promptly and with a welcoming smile. Whether it’s a warm blanket and a cup of gourmet hot chocolate as you drift on a small ship cruise along the Norwegian Fjords or a relaxing neck massage poolside, you’ll feel that you’re a member of a very exclusive club when sailing on these luxury cruise ships.
“Step aboard any one of our ships and you’ll enjoy a sophisticated and luxurious small ship cruise like no other. You will feel as though you’ve been invited to sail on a private yacht.
“Each small ship cruise offers all ocean-front suites, luxuriously appointed accommodations, an open-bar policy serving premium wine, champagne and spirits, and a world-class dining experience, further enhanced through a culinary partnership with Chef Thomas Keller.”
Saudi is expected to spend a trillion dollars in the next decade to attract 100 million tourists.
“Today, Saudi Arabia is the largest investing destination in the tourism sector,” said Fahd Hamidaddin, CEO of the Saudi Tourism Authority, speaking to Skift.
Having set the ball rolling, the destination has signed up Argentinian soccer star Lionel Messi as its newest tourism ambassador even as American golfer Jack Nicklaus says he turned down $100 million to be the face of Saudi-backed LIV Golf Series according to reports on Monday.
Seabourn would sit well with Saudi’s aspirations.
Well-known cruise executive Lars Classen was appointed CEO of Cruise Saudi in March. Mr Classen previously was CEO of A-ROSA River Cruises and president of AIDA Cruises, as well as playing a role in starting The Ritz-Carlton Yacht Collection.