Marine Log - February 2009 - (Page 17) BYWILLIAM EBERSOLD, CONTRIBUTING EDITOR CRUISESHIPPING Being built by STX Europe in Turku, Finland, Royal Caribbean's 220,000 grt Oasis of the Seas will have three ABB Azipod propulsion units when it makes its debut in late 2009 CAN MEGASHIPS, EUROPE PROPEL PROFITS? I n his keynote speech at the December Seatrade Med Conference in Venice, Carnival UK CEO David Dingle called the current state of affairs “a period of enormous challenge, but one of no less optimism as European cruise capacity continues to increase and the industry’s economic contribution continues to grow.” Similarly, a recent Cruise Lines International Association (CLIA) statement noted that “with a track record of continued growth, the North American cruise industry is wellpositioned to take on the global economic challenges of 2009.” CLIA president and CEO Terry Dale stated that “CLIA members are confident that they will weather the challenges and emerge stronger than ever, as they have before.” The optimism that pervades recent industry gatherings seems to be based on the superb value proposition of cruises, the popularity and high customer satisfaction of cruising, the continuing delivery of innovative new ships, enticing itineraries and shore excursions and the prospect that special pricing will suffi- ciently stimulate demand to continue to fill the ships. Yet the sobering fact is that even before the recent meltdown of the economy and recognition of the depth of the recession, the North American cruise market that accounts for two-thirds of the global industry had matured and growth had flattened (and declined in 2008). CLIA’s own forecast for 2009, when its members expect to add 6.5% to their fleet capacity (4.8% after adjustment for actual delivery dates throughout the year), is for only a 2.3% increase in the global carriage of passengers by member lines. Fortunately, in recent years the cruise lines have been able to take advantage of higher yields available outside of North America and have deployed increasing amounts of seasonal capacity to these markets, most notably in Europe. The high yields that were the magnet for so much additional new capacity stimulated additional European demand and made cruising attractive and accessible to a much broader segment of the European population in much the same way that introduction of megaships did in North America 15-20 years ago. The resultant high growth rates in Europe (where the penetration rate is only about 1%) as both a source and destination market has expanded the market base and undoubtedly contributed to the confidence with which the European cruise industry approaches the future. However, the continuing addition of capacity to that market would inevitably have created downward pressure on the very yields that made the region attractive in the first place (just as the removal of capacity from the North American market has had the opposite effect in contributing to the reported firming of rates in the Caribbean for a time). Because of the economic crisis, when that would have happened can now only be conjectured. THE FLEET, BY THE NUMBERS As of January 1, 2009, the active global cruise fleet consisted of 326 ships (1,000 GT and above) of 14.1 million GT with a capacity of 370 thousand lower berths, 6% more than one year earlier. This included nine new ships of nearly FEBRUARY 2008 MARINE LOG 17 www.marinelog.com http://www.marinelog.com
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