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Despite the Concordia tragedy and a stagnant global economy, the number of cruisers keeps going up.
Last year approximately 20 million cruises were booked worldwide, and that number is expected to rise to 30 million in the next 10 years. “That is quite modest growth, less than we've had in the last 10 to 20 years,” says U.K.-based Tony Peisley, cruise industry analyst and author of Cruising at the Crossroads: A Worldwide Analysis to 2025. “Still, this is the golden age of cruising in terms of quality of the product.” Peisley says the credit crunch in 2008 caused many cruise lines to temporarily suspend ordering new ships, but by the end of 2011 there were 27 on order, a trend he says will not soon stop (there are approximately 300 cruise ships in the world today). “You will still get people saying, ‘Well, there is too much capacity and that's why the yield is not as good as it has been,’ and I always say to that, ‘How many hotels were built this year? Hotels don't run 100 percent-full, and ships do.’”
Keeping Fares Low and Revenues High
Mike Driscoll, editor-in-chief of Cruise Week, concurs: “I think there is definitely optimism for the long term. For years they have been growing the business by ships, but now they are hoping to grow by rates; and hopefully later in the decade go back to the growth of ships.” To that end, numerous cruise lines have initiated cost-cutting drives, many of them technologically driven, in order to keep fares reasonable for passengers.
Money-saving measures include changing hull coatings, lowering speed and energy re-use. “If you look at the profit figures for Carnival, it is still making very healthy profits, but they would be a lot higher if fuel hadn't gone up,” explains Peisley. “Fuel cost is going to be the biggest issue in the future because of the environmental regulations coming in on fossil fuel,” he added, referring in part to the North American Emission Control Area (ECA) expected to be in place in August 2012, which will extend up to 200 nautical miles around U.S. and Canadian coasts and require the use of low-sulfur fuel or scrubbers.
Complete Post at:
http://www.maritime-executive.com/article/cruise-industry-outlook-steady-as-she-goes
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