Cruises in demand despite increased prices

Jason · February 9, 2005

Despite increasing prices, cruises in demand among travelers

By John Pain, The Associated Press

MIAMI Ã‚Â· Travel agent Joe Canino is noticing something among his customers booking cruises that he hasn't seen in a while: sticker shock.

But his clients still seem willing to pay an extra $1,000 for the same trip they took a year or two ago.

"They question why it's higher, but it doesn't deter them," said Canino, a cruise expert at Hebron Travel in Hebron, Conn.

Higher ticket prices and an insatiable demand among vacationers have the cruise lines basking in the smoothest sailing since the heavy discounts and tough times prompted by the 2001 recession and that year's terrorist attacks.

Passengers are inching closer to spending as much on tickets and extras on board as they did in the high-flying days of 1999 and 2000, analysts say. Carnival Corp. & PLC, the world's largest cruise company, just finished its most profitable year and expects to do better this year. No. 2 Royal Caribbean Cruises Ltd. and smaller players also report strong demand.

Into the second month of the heaviest booking quarter of the year, cruise lines are racking up reservations faster than last year. Despite rising oil prices and an increase in gastrointestinal illnesses among passengers, the industry expects the good times to continue.

"I think people are generally feeling optimistic about the economy. It's been nice and cold across the country, which always encourages people to take a [cruise] vacation. ... It's a great value," said Andy Stuart, NCL Corp. Ltd.'s executive vice president of marketing, sales and passenger services. NCL operates Norwegian Cruise Line, NCL America and Orient Lines.

A recent search on Cruisequick.com, a no-frills online travel agency, still turned up Caribbean trips on Carnival Cruise Lines for as little as $100 a day per person, including a cabin, food and entertainment.

Cruise.com, one of the largest online cruise travel agencies, has been selling trips at prices averaging about 20 percent higher than last year, Managing Director Anthony Hamawy said.

After expected increases through the rest of this year, Carnival's average ticket prices should be about 3 percentage points below the peak levels before the terrorist attacks, said Robin Farley with UBS Investment Research.