March 11, 2008
With the constant jabber about economic downturn, the collapse of the housing market, falling stocks, oil prices at $105 a barrel (yikes), recession or ... world depression, how will the failing state of the economy affect cruising? The question was among those posed at this morning's "State of the Industry," featuring five top executives from Carnival, Norwegian Cruise Line, Royal Caribbean, MSC Cruises and Celebrity.
And in an act of solidarity not always seen by such highly competitive people, all five on the panel were quite confident that travelers won't stop cruising. Basically they all "dittoed" each other on cruising's inherent value (prices have remained stable for decades even as rates at hotels and resorts are skyrocketing). Indeed, Celebrity's Dan Hanrahan, who wore two hats today (he's also head of the marketing outreach for Cruise Lines International Association this year), noted that the value of a cruise vacation "has helped us to weather the storm so far." He also noted that, based on past economic downturns, cruise travel has proven to be recession-resistant -- which isn't the same thing as recession-proof.
Added Carnival Cruise Lines' Gerry Cahill: "I'm not going to tell you cruising won't be affected. It will be. But it has great resilience."
The discussion about the economic impact on cruising has been a hot topic for the past month or so on Cruise Critic; 73 percent of readers who responded to Members Speak Out: How Will You Cruise in 2008?, a survey geared toward our North American audience, noted that they'd still go this year though many were also allowing for thriftier moves, such as driving to a port rather than flying, monitoring onboard expenditures, and even cutting a pre- or post-cruise land vacation in Europe and the U.K. due to huge currency differentials.
At today's session, Hanrahan pointed out that the buying trend for cruises is changing. It used to be that most lines -- and many passengers -- purchased cruises during "wave season," which occurs from January through March. To spur demand at that time, cruise lines enhanced advertising, offered value added extras (upgrades, free flights), and even proffered some sale prices. Now, however, "the new norm is consistent, year-round sales."
--by Dan Askin, Assistant Editor More stories live from Seatrade 2008!