Where Do Old Cruise Ships Go To Die?

The 18-year-old Carnival Victory—a bit retro, 

yet still a big moneymaker.Source: Carnival Cruise Lines

On a recent four-night cruise to the Bahamas on the 2,758-passenger Carnival Victory, a lively crowd was downing neon drinks at an equally fluorescent bar in the ship’s multi-story atrium. The casino was packed and smoky. This was old-school cruising, and everyone was loving it.

Most ships have an official lifespan of 30 years, the amount of time it takes for the asset to depreciate to 15 percent of its original book value. By that measure, the 18-year-old Carnival Victory has passed the theoretical prime of her life.

She’s still quite the moneymaker. By focusing on short, three- and four-night sailings from Miami to the Bahamas and back, the aesthetically outdated ship carries twice as many passengers per year as many similarly sized vessels. In fact, the Carnival Victory is just one of the many middle-aged and elderly ships that were built during a cruise boom in the 1990s but now make up a multibillion-dollar portion of the cruise industry.

By Fran Golden.

Full story at Bloomberg.