Billionaire Richard Branson is officially inserting himself into another sector of the travel industry. Virgin Group, Branson’s investment arm, announced its entry into the cruise business, extending the brand’s travel empire beyond planes, trains, and spaceships.
The company’s new line, Virgin Cruises, will be based in Florida and plans to design and construct two new, “world class” cruise ships, according to the press release issued today. “We plan to shake up the cruise industry and deliver a holiday that customers will absolutely love,” Branson said in the statement.
Citing “competitive reasons,” the company—the first new entrant to the cruise business since Disney Cruise Line was formed in 1996—wouldn’t say when it expects to start operating its routes.
Tom McAlpin, a former president of the Disney cruise business and most recently the president and CEO The World, Residences at Sea, will serve as CEO of Virgin Cruises, which is backed by private equity firm Bain Capital. Neither the size nor terms of the investment were disclosed, but Sky News reported recently that Bain’s investment would be several times larger than the $100 million that Virgin Group itself was expected to invest in the new venture.
Branson has had a mixed year in the travel business. His US airline, Virgin America, recently had its stock market debut, but his space-tourism business, Virgin Galactic, suffered a major setback when a test flight crashed this fall.
In the cruise business, he’ll be putting his notable brand experience up against Carnival Corp. and Royal Caribbean Cruises, the industry’s two biggest operators. Neither saw its shares rattled by Virgin’s confirmation of its plans for the cruise business, which came on a momentous day for Royal Caribbean’s stock: it is set to join the S&P 500 Index at the close of trading today.
As business threats go, even Branson no doubt is a lot less scary than the Ebola virus concerns that pounded cruise line stocks in October and the series of other viral outbreaks that have plagued cruise ships this year.