On the surface, the new Coronaventure cruise ship seems to be a nice little piece of infrastructure that Disney hopes will lure back tourists to the resort.
But in fact, the Coronacastor is a $1.6-billion project, which will take years to complete and cost $3 billion.
And while the cruise line will be built in a cost-efficient way, it will also be a major blow to the economy, particularly the Canadian economy, where cruise ship sales are down.
The cruise ship’s cost will be a huge hit for the Canadian cruise industry.
It will make it harder for cruise lines to attract and retain top talent, said Chris Gagnon, a cruise line analyst with BMO Capital Markets.
And that will make Canadian cruise line operators, including cruise lines like Royal Caribbean, less competitive in the global market.
“There’s going to be an impact on their revenues and their ability to attract talent and the talent that will drive their growth in the future,” Mr. Gagnonsays.
Cruise ships are big businesses that make millions of dollars a year for cruise line owners, he said.
The new cruise ship will be used primarily for entertainment and for weddings, business conferences, corporate retreats and other special events, but it will be home to about 10,000 people.
Cruise lines already spend millions on their fleets.
Last year, the United States cruise line Carnival Corp. spent $2.5 billion on its cruise ships, including the new Carnival Coronaval, which was the company’s biggest acquisition to date.
Carnival and its competitors spent $1 billion and $1 million respectively on their ships in 2016, according to research firm Cruise Line Insider.
“It’s going the wrong way,” said Richard Hirschfeld, senior vice-president and chief executive officer of the Canadian Cruise Line Association.
The Coronachan is the third ship built in the country’s first phase of the $2 billion Coronapacastora project, said David Schlosser, vice president of the cruise lines’ business division.
The project began last spring, when Royal Caribbean agreed to build the ship and build it out, with financing from the Canadian government.
Royal Caribbean was already in the planning stage when it purchased the Coronet for $1,000 million in 2015.
But it didn’t know how much the ship would cost until last month, when the company began construction.
Royal Cruise Lines said it would be a significant cost blow, but added that the ship’s construction was a matter of pride for the company.
“This ship is going to represent our proud heritage as one of the world’s leading cruise lines,” Mr and Mrs. Schlossers said in a statement.
“We are proud of what our company has achieved over the years and the quality of our vessels, which is why we have chosen Coronaward to be the first ship built.”
Carnival also says it will have a “significant presence” at Coronacanaval, a celebration of its 90th anniversary.
Royal Canadian Navy ships and aircraft will also participate in the event, which includes a parade, a naval show and other events.
The company said it expects the Corontacastoria to be in service by the end of 2020, and will be one of many ships at the celebrations.
In addition to the cruise ship project, the government also invested $300 million in the Corondale cruise ship and $200 million in Royal Caribbean’s Coronamarket ship, both of which were delivered in January.
The government also signed an agreement with Carnival to build a $2-billion, 7,000-room resort, which it hopes will attract tourists to Canada.
While the cruise ships will be popular, the cruise industry will be hurt.
Cruise line operators have struggled to attract customers as cruise line sales have been on a downward trend for decades.
Last month, Royal Caribbean announced it was cutting 1,300 jobs at its cruise line, and announced it will slash its workforce by 5 per cent.
Royal Cruises has already announced a $5.6 billion restructuring and restructuring of its operations in 2019.
It also has begun cutting staff at Royal Caribbean Cruises, the Canadian Caribbean Cruisers, Royal Hawaiian Cruises and Carnival Cruise Lines, among others.
With a report from The Canadian Press