Marine Log - February 2008 - (Page 19)

BY BILL EBERSOLD, CONTRIBUTING EDITOR CRUISESHIPPING NCL announced that it would withdraw and re-flag the Pride of Hawaii CRUISE GROWTH DRIVEN BY MEGASHIPS & EUROPE T he global cruise industry achieved solid performance in 2007, fueled by high revenue yields and rapid growth in Europe. The cruise lines responded to recent sluggish growth in the Caribbean by positioning some of their best and newest ships in Europe, keeping new ships in Europe for their inaugural seasons and enticing a growing number of Americans to purchase a dollar-denominated European cruise vacations as a hedge against dollar weakness. The weak dollar did not have an adverse impact on new ship orders, as the focus shifted to European-based brands. The year was also characterized by continuing new brand development, broader deployment of ships across the globe, and acquisitions that included entry of a major private equity firm. 12.6 MILLION PASSENGERS IN 2007 Year-end estimates by the Cruise Lines International Association (CLIA) indicate that its member lines carried 12.6 million passengers worldwide in 2007, up 4.6% from 2006. The estimates include 10.3 million North American paswww.marinelog.com sengers and 2.3 million from international markets. Occupancy remained high at more than 105%. CLIA projects that its member lines will carry 12.8 million passengers in 2008, matching the expected net increase in available bed-days. Early reports from Europe indicated that 2007 growth would be at least 10%, and likely in the mid-teens. The European Cruise Council (ECC) had projected that the number of Europeans cruising worldwide in 2007 would be up nearly 15% to 3.9 million, after more than 9% growth in each of the two prior years. CLIA’s destination analysis indicated that its member lines devoted approximately 25% of its available 2007 capacity to the European market. The Mediterranean is emerging as the fastest growing market, and the most popular for pre- and post-cruise stays. Despite the rapid growth in Europe, however, North America remains by far, both the most important source market for global cruise passengers and the largest operating area for cruises. CLIA reported that the Caribbean and Bahamas absorbed 41% of available 2007 fleet capacity, while Alaska and Hawaii accounted for an additional 12%. The cruise lines recorded solid growth in North America early in the year, with several lines (Carnival, Royal Caribbean, Norwegian and Princess) carrying more passengers than ever before in a first quarter. However, pricing was weak before the ships began their migration to seasonal markets, and didn’t recover until much later in the year. Despite some concern for the impact of a weakening U.S. economy on discretionary spending, higher yields are expected to continue well into this year. In addition to the strong value proposition offered by the cruise industry, its prospects are enhanced by the ability to shift deployment away from weaker markets. Reduction of capacity in any market is itself a stimulus for yield improvement in that market. A younger fleet mix resulting from the steady flow of new vessels into the marketplace also brings an increase in higher yielding cabins. FLEET Ten new cruise ships were delivered in FEBRUARY 2008 MARINE LOG 19 http://www.marinelog.com

Table of Contents Feed for the Digital Edition of Marine Log - February 2008

Marine Log - February 2008 Contents Editorial Second Thoughts Update Inside Washington Cruise Growth: Driven by Megaships and Europe Another Piece of the Short Sea Transport Puzzle Putting Together a More Advanced Jones Act Tanker Evolving Propulsion Options for Diesel Electric Ships In Search of Smarter Shipbuilding Seatrade Peview Events Newsmakers Tech News Contracts Website Directory Infodirect ML Marketplace Opinions

Marine Log - February 2008

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