Questionmark over Island Cruises brand

The future of the Island Cruises brand hangs in doubt after half shareholder TUI UK agreed to buy out joint partner Royal Caribbean.

One of the joint venture’s two ships – Island Escape – is to be retained by TUI while the second – Island Star – will be returned to Royal Caribbean.

The US cruise company said it would “recognise a small gain” on the sale of its interest in Island Cruises and the early termination of the Island Star charter.

Royal Caribbean plans to redeploy the Island Star to its Spanish brand Pullmantur Cruises.

“Redeploying the Island Star to our expanding Pullmantur fleet allows us to better serve the strategically important Spanish market,” said the line’s chairman and and chief executive Richard Fain.

Island Cruises’ managing director Patrick Ryan is to leave the company at Christmas. The future of the rest of the Island Cruises staff has not yet been determined.

TUI UK director of cruising David Selby is to lead a review of the integrated business, according to a letter to staff.

But cruise agents speculated that the Island Cruises brand would not be retained as TUI’s Thomson Cruises seeks to attract more older, higher spending passengers rather than cost conscious first-timers which were Island’s stock in trade.

Island has carved a niche out alongside Carnival UK’s two-ship Ocean Village brand for offering quality, casual Mediterranean fly-cruises in the summer and Caribbean in the winter to travellers who have not experienced cruise holidays before.

But it had become known in the trade for deep discounting particularly in the shoulder seasons.

The deal means that Island Escape will continue to operate its published itineraries in Brazil this winter and from Palma for next summer.

Island Star will operate its Caribbean itineraries under the Island Cruises banner this winter until it is returned to Celebrity on April 6, 2009.

Thomson Cruises currently operates a fleet of five ships, and had planned to reduce to four next year.

But TUI UK & Ireland managing director Dermot Blastland said: “It is our intention to integrate Island Escape into this established fleet.

“The Island Escape will, therefore, continue to deliver the same exceptional value for money cruise product within Thomson Cruises.”

The statement does not make it clear what happens to the Island Cruises staff other than saying that Ryan has “decided to persue his career outside of Island Cruises” and is to stay on until Christmas to support the transition.

Fain said: “We thank TUI for their efforts and cooperation throughout the life of the joint venture. Island Cruises has been a rewarding investment for us, but over the past year our priorities have shifted.

“We believe by focusing on developing and expanding the Royal Caribbean International and Celebrity Cruises brands in the UK we will be better able to serve our customers and create value for our shareholders.

“This belief has been strengthened by the success of the inaugural season of Independence of the Seas, which has served the U.K. market from Southampton since it entered service in May 2008.”

by Phil Davies