At this time last year, on the eve of the annual Passenger Vessel Association convention, the energy sector was mired in bad news while passenger vessel operators were faring much better. Now, the energy market has eroded further, with oil dipping below $27 bbl. today for the first time since 2003. The price of oil has fallen over 25% this year. As oil prices continue to drop, so too do rates and utilization for OSVs and rigs.
While oil is suffering through another boom-to-bust cycle, business continues to improve for the passenger vessel industry, whose 2016 annual convention opens in Washington, D.C., on Saturday. Passenger vessel operators are not only benefitting from low fuel prices but also seeing improved corporate and convention business.
In our February issue, Dale DuPont reports that passenger vessel operators had another strong year in 2015, highlighted by slow, steady expansion and new boat orders, and expect more of the same this year. As Troy Manthey, chief of Yacht StarShip in Tampa, Fla., said, “We’re having a good year. The price of gas is down and people have more money to spend.”
Another company, St. Croix Boat & Packet Co. in Stillwater, Minn., had its best season since 2000. The improved economy and demand for cruises has encouraged many operators to expand. Manthey said his company is opening a new water taxi service in late January and they’re renovating three vessels. New Orleans Steamboat Co. also has growth plans. The New Orleans-based company is building a 600-passenger, 160’×36′ boat to join the 1,600-passenger Natchez. In Cleveland, Nautica Queen Dinner Cruise Ship, which saw business increase more than 10% from 2014 to 2015, is considering replacing the 385-passenger, 102′ Nautica Queen, built in 1981, with a newer vessel.
This is good news for the passenger vessel sector, and a welcome change from reporting on the continued gloom and doom emanating from the energy sector. Let’s hope that at this time next year, we’ll have good news to report from both sectors.