Costa Cruises is one of the largest cruise lines in Europe and a subsidiary of Carnival Corporation. Founded in 1854, Costa has a fleet of 15 ships that sail to destinations around the world. Some key recent developments for Costa Cruises include:
Expanding Fleet
Costa is continuously growing its fleet. Costa’s newest ships include the Costa Smeralda which entered service in 2019 and runs on LNG fuel. The next newbuild is the Costa Toscana scheduled to launch in 2021. These new mega-ships have a capacity of over 6000 passengers each. Costa has additional new cruise ships on order over the next few years as it modernizes its fleet.
New Destinations
Costa is expanding its repertoire of cruise destinations. For summer 2019, Costa introduced new itineraries to the Red Sea and new cruises from Tokyo. Looking ahead, Costa will offer two new routes for winter 2019/2020 including Italy to Mauritius and the Seychelles and Italy to Kenya and Tanzania. The cruise line is tapping into growing demand for exotic cruise vacations.
Sustainability Efforts
With its new ships powered by LNG, Costa is leading sustainability efforts in the cruise industry. LNG eliminates sulphur and particulate emissions and reduces nitrogen oxide and carbon dioxide emissions. Costa was also the first cruise company to voluntarily use advanced wastewater purification systems fleetwide. The cruise line has set sustainability goals to reduce its environmental impact through 2050.
Costa’s Safety Record and Accidents
Costa has a very good safety record overall. However, the cruise line has suffered a few major accidents:
Costa Concordia Disaster
In January 2012, the Costa Concordia capsized after striking rocks off the Italian island of Giglio. This accident resulted in 32 passenger deaths. The captain was charged with manslaughter, causing a shipwreck, and abandoning ship. Costa was also fined 1 million Euros for delays and errors in the evacuation process. This was one of the worst cruise ship disasters in recent history.
Other Accidents
A few other notable Costa accidents:
– In 2010, the Costa Europa cruise ship collided with a cargo ship in Egypt’s Red Sea, killing 3 crew members.
– In 2014, a fire broke out in the engine room of the Costa Luminosa, forcing passengers to evacuate. No injuries were reported.
– In 2016, the Costa Magica’s engine failed, leaving the ship adrift near Puerto Rico until repairs could be made.
Despite these incidents, Costa still maintains a good safety record overall, passing regular inspections and audits. Accidents of this scale are rare.
Costa’s Financial Performance
As part of Carnival Corporation, Costa Cruises does not report individual financial results. However, some key financial trends for Costa include:
Revenue Growth
Costa generates over $5 billion in annual revenue. The cruise line’s revenue grew steadily in the 5 years preceding the pandemic, as it added capacity and saw increased ticket prices. Bookings were strong before Covid-19.
Profitability
As one of Carnival’s most established brands, Costa is estimated to be a highly profitable line. Industry experts believe Costa achieves better profit margins than the Carnival parent average. Its large fleet benefits from economies of scale.
Covid-19 Impact
The pandemic devastated Costa’s financials. The cruise line saw revenues plunge to near zero in 2020 with extended suspensions. Costa is estimated to have burned over $150 million in cash per month while idle. Bookings are rebounding in 2021 as cruising resumes. Full financial recovery will still take years.
| Year | Estimated Revenue | Estimated Profit Margin |
|---|---|---|
| 2018 | $5.2 billion | 19% |
| 2019 | $5.5 billion | 20% |
| 2020 | $650 million | -72% |
Costa’s Cruise Offerings
Costa provides a range of cruise experiences across its global fleet. Some details on Costa’s cruise offerings:
Ship Classes
Costa has four main ship classes:
– Costa Smeralda Class – LNG powered mega-ships with a focus on Italy
– Costa Venezia Class – Mid-size panoramic designed ships deployed in Asia
– Costa Diadema Class – Large ships offering family-friendly amenities
– Costa Neo Class – Mid-sized vessels with modern interiors
In addition, Costa maintains a handful of older, smaller ships.
Itineraries
Costa’s cruises visit over 250 ports around the world. Popular itinerary types include:
– Mediterranean cruises from 7 to 21 days
– Northern Europe voyages
– Caribbean, Central America, South America sailings
– Transatlantic crossings
– Exotic cruises to Indian Ocean, Middle East, Africa
– Asian cruises for Chinese market
Onboard Experience
Costa provides a lively, Italian-inspired onboard experience. Highlights include:
– Abundant dining options including Italian favorites
– Vibrant bars and lounges with entertainment
– Stylish theaters for large-scale productions
– Pool decks and outdoor activities
– Wellness with spas and fitness classes
– Children’s clubs and teen activities
– Shopping and product demos
Costa’s Target Markets
Costa Cruises has a broad market reach given its global fleet. Its main source markets include:
Europe
Europe represents Costa’s largest source of passengers, including Italy, France, Germany, Spain and the UK. Many Europeans book Costa to conveniently cruise the Mediterranean from local ports.
North America
A significant portion of passengers come from the United States and Canada. Costa appeals to North Americans seeking an authentic Italian cruise experience in Europe.
China
China has become a major focus, with Costa deploying several ships tailored for Chinese travelers. These offer Chinese cuisine and amenities along with Mandarin-speaking staff.
Brazil
Costa invests heavily in catering to the Brazilian market, operating Portuguese-language websites and marketing materials. The cruise line deploys ships in South America for Brazilian clientele.
Emerging Markets
Other key markets include Australia, Latin America and the Middle East. Costa taps into cruise demand from regions with burgeoning middle classes.
Competitive Position
Costa competes in the contemporary/premium cruise segment. Its main competitors include:
Carnival Cruise Line
Also owned by Carnival Corp, Carnival Cruise Line offers a similar experience and vies for the same passengers in North America and Australia. Costa differentiates through its more upscale Italian flair.
MSC Cruises
MSC is another major European contemporary line. Like Costa, it has significant passenger bases in Italy and other European source markets. MSC pitches its Swiss heritage.
Royal Caribbean
Royal Caribbean is a leader in global cruise tourism. Its ships rival Costa’s in size and amenities. It appeals to families and active travelers.
Norwegian Cruise Line
Norwegian offers a lively, casual cruise option for North Americans. Its “Freestyle Cruising” ethos contrasts with Costa’s more classic experience.
Overall, Costa competes well with its elegant, Italian-designed hardware and strong brand identity. However, the rise of MSC and influx of giant megaships have challenged Costa’s market share in Europe.
Future Outlook
Costa faces some uncertainties but is positioned for a strong post-pandemic rebound:
Fleet Expansion
Costa will continue expanding its fleet, with new LNG-powered ships coming online over the next 5 years. These additions will increase passenger capacity by 32% by 2027. This boosts scale and efficiency.
New Markets
Emerging markets like Asia will propel growth. Costa is aggressively growing its presence in China and Japan to tap into new demand. More exotic destinations could be added as well.
Health & Safety
Enhanced health protocols will restore traveler confidence. Costa’s parent company Carnival has implemented procedures for COVID-19 testing, masking, distancing, sanitization, and vaccination requirements.
Pent-Up Demand
Surveys indicate a swell of built-up cruise demand after two years of suspended travel. Costa is well positioned to capitalize as travelers return to cruising in Europe and farther afield.
Barring an unexpected crisis, Costa Cruises seems poised for a prosperous future as global tourism rebounds. Its returning loyalists, new ships, and far-reaching destinations will drive growth in bookings and revenue. While competition is fierce, Costa’s esteemed brand and Italian hospitality should help it flourish.