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Viking Cruises Goes Ocean Despite Industry Mishaps

NEW YORK (TheStreet) - Viking Cruises is launching a fleet of smaller ocean liners that the company says is the future of ocean cruising.

Earlier this month, Los Angeles-based Viking, known for its upscale river cruising ships, announced plans for an ocean line. The company claims it is the first new cruise line to launch in nearly a decade and will "return the focus of cruising to the destination" as opposed to onboard activities.

Viking's decision to get into the ocean business follows a string of recent mishaps. A fire on board a Royal Caribbean (RCL) ship this week in the Bahamas comes after the February debacle aboard a Carnival (CCL) cruise line in the Gulf of Mexico in which power was lost leaving hundreds of passengers stranded for days.

Yet the company is not deterred. Viking Ocean Cruises will begin sailing its first vessel, Viking Star, in the spring of 2015. The 464-cabin ship will sail to Scandinavia and the Baltics as well as the Mediterranean, between Barcelona and Venice and Venice and Istanbul, the company says.

A second Ocean Ship is on order for delivery in 2016. Viking also has conditional orders and options for four more ocean vessels.

Also see: Carnival Shares Slip on Lower Guidance

Viking says it has an opportunity in the ocean cruising space because of who it is targeting -- sophisticated baby boomers -- a market Viking's founder and CEO says has been forgotten by the wider ocean cruise industry when cruise lines started becoming "everything for everybody."

It also believes the future of ocean cruising is in smaller ships (less than 1,000 passengers).

"It is our view that in the race to build bigger ships, many cruise lines have lost sight of the destinations to which they sail," Hagen said in a May 17 launch release. "With our new ocean cruises, we are applying the same principles behind our award-winning river cruises to our itinerary and ship design; privileged-access excursions; and onboard experiences to make destinations the true focus."

While Viking is a private company, the stocks of larger cruise ship companies Carnival and Royal Caribbean have suffered. Carnival's stock is down 9% this year; Royal Caribbean's stock is up just 4%, compared to the S&P 500, which is up roughly 16% for 2013. Norwegian Cruise Line (NCLH) is an exception. The Miami-based company filed an initial public offering in January. The stock is up roughly 27% since then.

According to the U.S. Census, the median net worth for householders 65 and older in 2011 was $170,516 compared to the national average of $68,828.

Stock quotes in this article: CCL, RCL, TRIP 

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