Seatrade 2006

The cruise industry expects another record-breaking year

By: Marcia Levin

Seatrade 2006, the annual cruise industry meeting and trade show, took place the week of March 13 at the Miami Beach Convention Center. The industry’s big guns had plenty to smile about as they joined travel agents, media and representatives of shipyards and worldwide destinations at the five-day gathering.

CLIA chairman Andy Stuart who is also vice president of marketing, sales and passenger services for Norwegian Cruise Line, dubbed 2005 “an extraordinary success.” More than 11.18 million passengers enjoyed a cruise vacation last year, with cruise lines reps grinning about a 103 percent occupancy rate.

Ninety percent of those 11.18 passengers sailed on ships belonging to the “big four”: Carnival Cruise Lines, Royal Caribbean International, Norwegian Cruise Line and MSC Cruises. The traditional “State of the Industry” panel featured Bob Dickinson, president and CEO of Carnival Cruise Lines, Adam Goldstein, president of Royal Caribbean International, Colin Veitch, president and CEO of NCL Corporation, and Rick Sasso, president and CEO of MSC Cruises (USA). Stein Kruse, president and CEO of Holland America Line, and Dan Hanrahan, president of Celebrity Cruises, rounded out the panel.

The executives all agreed that last year’s success was largely due to close work with and support of the travel agent community.

The panel discussed the exciting news that at least 25 newbuilds will debut between now and 2009, marking an investment of approximately of $14.3 billion. A popular topic dealt with the question of whether size counts. Case in point is Royal Caribbean’s Freedom of the Seas, launching with a series of consecutive travel agent events from May 11 to June 4. The 3,600-passenger ship will feature a surfing program, boxing ring and the line’s iconic rock-climbing wall. Another Royal Caribbean vessel currently on order will break even Freedom of the Seas’ record as the world’s largest. Set to debut in 2009, the 220,000-ton, 6,000-passenger ship will arrive with a whopping price tag, as well: approximately $1 billion. Needless to say, Royal Caribbean’s Goldstein answered the size question with a resounding “yes,” while Dickinson of Carnival hedged that it might be more feasible to build and operate two smaller vessels for the price of one extra-large ship.

In addition to newbuilds, the panel also touched on the topics of higher fuel costs, as well as cruise ship security. On the former subject, Celebrity’s Hanrahan noted that the industry would simply have to become more efficient in its operations, utilizing LED lighting, for example. As for the latter (which has surely been in the news of late) Royal Caribbean’s Goldstein noted that travel agents are aware of the industry’s overall safety record and have been positive in their reaction and aware of many talking points dealing with the issue.

Another popular session at Seatrade dealt with small ships. They, too, have a positive outlook. These lines approximately 40 brands such as Regent Seven Seas Cruises (formerly Radisson Seven Seas), Crystal Cruises, Silversea Cruises, Clipper Cruise Line, American Cruise Line and Cruise West make up about $6 million of the global cruise market.

“We predict the small ship market will be a fast growing segment over the next 10 years,” said Charles Robertson, chairman and CEO of American Cruise Lines.

Noted Gregg Michel, president and COO of Crystal, “new customers grew last year by 43 percent.”

Baby-boomer cruisers, who accounted for 20 percent of passengers on ships in 2004, are expected to number 70 percent by 2010.

In addition to formal sessions, Seatrade annually features the world’s largest cruise industry trade show. This year’s panoply of vendors offered an array of goods and services for cruise passengers, ranging from soup stock in a box to cannoli on a stick; bed linen to chocolates; mobile phones to bowling alleys. (The new Norwegian Pearl debuts later this year with a bowling alley on board.)

Once again the top five most popular cruise destinations are familiar ones: Caribbean, Alaska, Hawaii, Northern Europe and the Mediterranean. A total of 32 domestic ports will welcome cruise-ship passengers in 2006. A large array of domestic and international ports was represented at Seatrade. They ranged from “tried and true” Bahamas, St. Lucia and Key West, to the more exotic, such as Oman and Singapore. Newer ports such as Grand Turk in the Turks and Caicos and new-and-improved passenger terminals like the Port of Baltimore, were on everyone’s mind. Other ports generating buzz were the $400 million Portside Wharf at Brisbane, Queensland, Australia set to open later this year; a $15.6 million rehab of Prince Edward Island’s Charlottetown Seaport; and a $25.6 million update of the Port of Malaga. A new cruise pier with terminal is due in 2008 at the Port of Copenhagen.

Overall, Seatrade made one thing clear: 2006 is expected to be another record-setting year for the cruise industry.