Cruise lines expect good year

Cruise lines expect good year

The number of people taking cruises continues to grow.

MIAMI BEACH, Fla. (AP) — Leaders of the world’s largest cruise lines said Tuesday the industry’s 2008 outlook is positive despite economic pressures such as high fuel costs, the weak dollar and a struggling housing market.

Though not immune to a weakening economy, the industry has proved “recession resistant” because its all-inclusive vacations provide value for travelers who may be cutting back on discretionary spending, said Dan Hanrahan, marketing committee chairman for Cruise Lines International Association. He spoke along with other industry executives at the Seatrade Cruise Shipping Convention in Miami Beach.

He said there is a 105 percent occupancy rate for ships belonging to association cruise lines, and internal surveys of travel agents predict this year’s bookings and sales could be as good or better than 2007, Hanrahan said.

“There’s this belief amongst people that they deserve their vacations,” said Hanrahan, who also is president and CEO of Celebrity Cruises and Azamara Cruises, units of Royal Caribbean Cruises Ltd.

In the past four years, the industry has fought through two active hurricane seasons in the Caribbean, unflattering media reports about cruise safety, a downturn in housing and higher fuel prices.

Cruise ships have seen some significant shifts, such as the rising popularity of European trips, the increasing size of ships and investment by private equity firms in operators such as Norwegian Cruise Line.

Hanrahan said 12.6 million passengers took cruises in 2007 with 10.3 million of them from North America. The industry expects an increase in worldwide passengers this year to 12.8 million — as lines plan to add eight new ships in 2008 and more than 35 in the next four years.

Still, the dollar has plummeted against other currencies, U.S. consumers are paying more for gas and groceries, and the stock market has seen its share of tumult, said Gerald Cahill, president and CEO of Carnival Cruise Lines.

“I’m not going to tell you that cruising won’t be affected. It will be,” he said.

But he said the industry is healthy enough to withstand those challenges — especially when compared to land-based vacations such as theme park trips.

“It’s my guess that cruise pricing will once again turn out to be much more resilient than many of the doomsayers expect.”

Stein Kruse, president and CEO for Carnival’s Holland America Line, said lines are working to lower fuel costs by taking steps such as finding new hull paint that reduce a ship’s drag in the water, adjusting itineraries and “cold ironing” — using land electricity when in port rather than spending precious ship fuel.