Cruise Industry Leaders Gather for Annual Fest

March 16, 2004
Which cruise destinations are hot (or lukewarm)? Will cruise fares continue to stay cheap and cheerful (for passengers, not cruise lines)? And are cruise lines putting a halt to new-ship building programs?

All these and more were grist-for-the-proverbial-mill during today's (relatively) rousing "State of the Industry" debate at Seatrade, in Miami. Seatrade, now in its 20th year, is the industry's only major annual convention. Folks ranging from suppliers-to-ships (selling everything from plumbing systems to deck furniture), to destination representatives (from both established and hoping-for-cruise-traffic areas), to executives from nearly every major North American line all attend.

For many, the highlight of the four-day event is the "State of the Industry" debate -- which features a panel of cruise-line leaders who discourse on trends and developments. This year, participants were Norwegian Cruise Line's Colin Veitch, Carnival Corporation's Howard Frank, Radisson Seven Seas Cruises' Mark Conroy, Royal Caribbean's Richard Fain, Carnival Cruise Line's Bob Dickenson (making his 20th annual appearance) and Silversea Cruises' Albert Peter.

While much of what's discussed -- here and throughout various seminars that take place during the week -- is a bit arcane for most cruise travelers, some areas of debate are of interest to passengers. Among them:

The industry is at the tail end of a major building boom, and while a dozen new ships will be (or have already been) introduced throughout 2004, look for a real slowdown in 2005. Indeed, just four ships have been ordered for 2005: Cunard's Queen Victoria, Carnival's Carnival Liberty and as-yet-unnamed ships from Mediterranean Shipping Cruises (MSC) and Norwegian Cruise Line. We'll throw in a fifth -- sources say that NCL's Pride of America, currently undergoing major repair after it partially sunk (and then spent weeks partially underwater), will be ready for launch in spring 2005.

Why the slowdown? This year's 12 new launches are a result of the tail end of a multi-year building boom that is simply winding down. Still, cruise line executives admit that the dollar's weakness against the Euro (most shipyards are based in Europe) is a deterrent (panelists' positions ranged from "significant" to "a factor but not major" in their reaction to it).  Even in Japan, where Mitsubishi Heavy Industries just delivered the much-admired Diamond Princess -- its first new passenger cruise ship in 14 years -- the yen is trouncing the dollar.

In terms of itinerary length, Mark Conroy, the RSSC president who also has served as the industry's leader at Cruise Lines International Organization (a marketing and training arm of the industry) says that the biggest growth over the past year has been in the range of six- to eight-night cruises. One- to five-night trips are the second most popular in terms of length. Interestingly, in the face of that growth, NCL has actually moved out of the short cruise (one to five nights) market for the first time in many years.

Which regions are cruising's hottest? Most of the panelists agreed that Europe 2004 is selling very well, and here's a tip -- passengers are paying slightly higher fares (on average) than in the past couple of years. And, they are booking further in advance (last minute cruisers, take notice!).

What's not so hot? The Southern Caribbean is not considered a growth region. This trend has nothing to do with the quality of the islands and their in-port experiences by any stretch. It's due more to two other factors. First, most seven-night Southern Caribbean trips must rely on airlift to San Juan, which is more limited than, say, Miami or Ft. Lauderdale. Second, with many cruise lines -- including Carnival and NCL -- moving to a home-porting strategy, with embarkation ports ranging from Charleston to Galveston, a seven-night deep Caribbean itinerary is simply not as logistically possible as it would be from a closer port of embarkation. On the bright side, several executives agreed that the region is seeing growth from European-based travelers because of the quantity of charter options. These make good use of airports in the Dominican Republic as well as Barbados and San Juan.

On the horizon? Carnival Corp.'s Micky Arison (who did not participate) has already gone on record as saying that the company would like to develop the Asian market through one of its cruise lines.  "We're in the early stages of discussion to bring the traditional cruise product to Asia," says Howard Frank, the panel's Carnival Corp. representative. Currently, NCL parent Star Cruises owns that market. And, of course, some North American-based cruise lines do offer a handful of voyages that incorporate Asian ports of call (see this week's virtual cruise!).

We'll follow up tomorrow with more tidbits from Seatrade.