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Cruise ship in dry dock
Alison O'Brien  /  CNBC
With the cost of the biggest new ships approaching $1 billion, cruise lines are overhauling olders vessels for a fraction of the cost.
By Producer, CNBC documentaries
updated 3/25/2009 11:46:49 AM ET 2009-03-25T15:46:49

In today's turbulent economy, the multi-billion dollar cruise industry is sailing in uncertain waters. So, investing more than $1 billion to build a new ship may not be financially sound.

But, renovating older ships to look like new, is.

The overhaul is performed at a "dry dock"  - a place many people within the cruise industry have never seen. This dock is drained of water, which allows for workers to inspect, refurbish and repair a ship from the bottom up, and everywhere in between. The renovations, not matter how major, are just a fraction of the cost of building a new vessel.

When CNBC visited in November 2008, the ship undergoing the extreme makeover was the 76,800-ton Norwegian Spirit, a mid-size ship in Norwegian Cruise Line's 11 vessel fleet. For 24 hours a day, for three weeks straight, nearly 250 contractors worked alongside the Spirit's regular 1,000 member crew, who were trained to do jobs they never do while the ship's at sea.

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"Everybody gets their briefing," said Frank Hasenwinkel, Spirit Hotel Director. "If you are usually a waiter, you would work in the engine room scrubbing floors, or as a casino guy, you would do some fire duties. They get some extensive training."

Entering into the center of the ship, there's a flurry of carpet laying, sanding and welding; the Spirit's public address system sounds the familiar cruise ship signal: "Bing Bong! Good morning, team Spirit! This is Capt. Hoyt. Well, we are now on the countdown - it is 8 days until we are embarking passengers in New Orleans. Eight days and counting..."

Capt. Evans Hoyt has sailed the seas since he was 17 years old, and has been with Norwegian Cruise Line since 2004. He piloted the Pride of America in Hawaii, then spent time in the European fleet, until coming to the 10-year-old Spirit. He is supervising what turned out to be a $16 million overhaul.

Video: Ports of call

"The capital investment on one of these ships is enormous", said Hoyt. "Even if you have the capital to build a new ship, the availability of shipyards and the delay time in the construction of one of these is quite a bit."

"The whole point is to keep the quality of the ship up and this is our opportunity here to to do all the upgrades that will bring us up to the premier level of the rest of the fleet."

On the dock, crews changed out one of the ship's four main engines, then rewelded the cutout on the side of the ship through which the engine was transported. On scaffolds, two workers cleaned the propellers, which usually live below sea level, while others painted the ship's bottom.

Inside, more than 21,000 square meters of carpet were replaced, and the 1,000-seat Stardust Theatre was completely redone. Fifteen upholsterers, who create seat covers for the thousands of chairs onboard, lived in what serves as a bar when the ship is in service. The renovation takes time and money, but to Norwegian Cruise Line, it may translate into future profits.

"A large percentage of our guests are actually repeat customers and, like in a hotel, you want to offer the guests an updated look," Hasenwinkel said. "And little things like carpets or new windows or new fabrics, new furniture - these are all things that are very important and that people realize right away."

Those repeat visitors will also notice that the Spirit has grown to make room for new cabins.

"The video arcade, which we had on Deck 10 portside aft, has now been converted to 11 new cabins - eight of which will be balcony cabins," said Hoyt, standing next to a newly-upgraded Bridge navigational system.

The balcony cabins, according to Hasenwinkel, are the top sellers.

"After the ship is all done, you won't see any difference from the rest of the ship," he said. "It's quite fascinating to add balconies. How they are doing that? I'm amazed myself."

On Nov. 22, 2008, the Norwegian Spirit left dry dock and headed towards its home port of New Orleans, where passengers anxiously awaited its return.

"I think when the passengers come on, the overall impact will be that of a new ship," Hoyt said. "That's what we're shooting for."

Video: Cruise ship makeover

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