Despite the stubborn virus that continues to make an occasional
appearance onboard, cruise executives are expressing cautious
optimism for a healthy Wave Season.
“We’ve gone through an awful lot,” said Kirk Lanterman, CEO of
Holland America Line-Westours. “But the cruise industry seems to be
very resilient and pricing seems to be good.”
Radisson Seven Seas Cruises has reported that bookings during
Christmas week were 15 to 20 percent higher than last year. And
Carnival Corp. expects yields to inch up 1 to 3 percent in
The biggest damage to cruising’s reputation continues to be the
extensive, sometimes shrill media coverage of the Norwalk-like
virus that has sickened thousands.
In one of the most recent outbreaks, Royal Caribbean
International reported 71 suspected cases on the Majesty of the
Seas’ four-day cruise, which ended Dec. 27.
Overall, however, the International Council of Cruise Lines
reports that the virus hit less than .01 percent of the 7.4 million
people estimated to have cruised in 2002. And the virus has
sickened many people on land too.
While health authorities have praised the lines’ response to the
virus, some executives worry that consumers have lingering doubts
that will affect their actions during the time of year when most
cruise reservations are made.
Factor in economic issues, the fear of war with Iraq, rising
tension with North Korea and continuing strife in Israel, and it
would seem that Wave Season is facing rough waters.
But Mark Conroy, president of Radisson Seven Seas Cruises and
chairman of the Cruise Lines International Association, said the
bookings already have begun for the busy months of January,
February and March.
“During Christmas week, we did about $1 million more in net
revenue than Christmas week the year before,” Conroy said. “That’s
about 15 or 20 percent more.”
He said consumers appear to be more concerned about the economy
and Iraq than they are about the virus and that many are waiting
until the last minute to make reservations.
For example, Conroy said the line received two lucrative
bookings for a 122-day world cruise on Dec. 16, just three weeks
before the Jan. 7 departure.
“We are noticing a lot of churn in the number of bookings that
stick from reservation to sailing,” Conroy said. “The stick is
usually about half, but now it ranges from 30 to 45 percent. The
marketing seems to be working, which means people are calling
agents and making reservations, but they’re not always putting the
money down. Customers want to go, but they’re nervous.”
Micky Arison, chairman of the six-brand Carnival Corp., said
advance-booking occupancy levels and prices for fiscal 2003 were
“up slightly” compared with last year’s levels at the same
The company does not release exact figures.
“However, booking levels have slowed recently, which may have
been partially caused by the recent media attention focused on
stomach flu on cruise ships,” Carnival Corp. stated Dec. 19.
“Historically, widespread adverse media coverage on cruise industry
issues has had a temporary negative effect on booking trends.”
This quarter, Carnival Corp. expects net revenue yield to
increase 1 to 3 percent compared with the same period last
But operating costs will be 4 to 6 percent higher, when
calculated on an available berth-day basis, because fuel costs are
increasing. There also will be a significant increase in marketing
costs related to the new ships that are expected to increase
capacity by 17.5 percent this year.
Norwegian Cruise Line also reports that both load factors and
yields are running ahead of last year.
“Clearly, there’s some uncertainty in terms of a possible war,
but we’re not seeing that reflected in our bookings,” said Andy
Stuart, senior vice president of marketing and sales. “We’re seeing
a very strong outlook for 2003.”
Other events tilting in favor of the cruise industry were the
early snow and miserable weather in parts of the Northwest, Midwest
“The weather hasn’t been that great all over the country, so
people are starting to plan vacations,” Conroy said.
Of course, it might not be that difficult to increase sales and
revenue over early 2002. At that time, the travel industry still
was reeling from the post-Sept. 11 fallout. Cruise lines lured
passengers with deep discounts remember $399 for a week in the
Caribbean? and redeploying ships to nearby seaports, which has
proven successful for most lines.
“There are some events hanging on out there who knows what will
happen with the Iraq situation,” Lanterman said. “But I think the
Wave Season will turn out to be very good.”