CRUISE INDUSTRY CONTRIBUTED $32.4 BILLION

[JoeyandDavid]

ARLINGTON, Va. (Aug. 31, 2006)  The North American cruise industry generated $32.4 billion into the U.S. economy in 2005, an increase of nearly 8 percent over 2004, contributing to the economy of every state in the nation. In an annual study commissioned by the International Council of Cruise Lines (ICCL), Business Research and Economic Advisors (BREA) found that the cruise industry supported more than 330,000 jobs nationwide and paid a total of $13.5 billion in wages and salaries to Americans in 2005.

Cruise lines, their passengers and crew were responsible for a total of $16.2 billion in direct spending on U.S. goods and services last year – $1.5 billion, or 10 percent, more than in 2004. The industry’s direct expenditures supported nearly 143,000 jobs and paid $5.2 billion in wages and salaries, an increase of 5.6 percent and 8.1 percent, respectively. BREA noted that while growth in embarkations was not as robust in 2005, global spending on a per passenger basis rose from $1,553 in 2004 to $1,667 in 2005, up 7.3 percent.

“Last year was challenging due to weather disruptions and fewer new ships delivered,†said ICCL President Michael Crye. “Through those challenges, however, the cruise industry remained a robust economic resource in 2005, benefiting the U.S. economy with $32.4 billion – $4 billion more in goods, services and wages than it spent in 2004.â€Â

The study noted that direct economic benefits to the U.S. economy derived from five main sources:

• Spending by cruise passengers and crew for goods and services associated with a cruise, including travel to the port of embarkation and pre- and post-cruise vacations;

• Shoreside staffing by cruise lines for U.S.-based headquarters, marketing and tour operations;

• Purchase of goods and services necessary for cruise operations, including food and beverages, fuel, hotel supplies and equipment, navigation and communication equipment, etc.;

• Payments for port services at U.S. homeports and ports-of-call; and

• Maintenance and repair of cruise ships at U.S. shipyards and capital expenditures for port terminals, office facilities and other capital equipment.

The $16.2 billion in direct purchases for goods and services for cruise operations by the North American cruise industry benefited the economies of all 50 states. Benefits to states from cruise line purchases included air transportation, food and beverages, ship maintenance and refurbishment, engineering and travel agent commissions. Economic impacts were concentrated in 10 states that accounted for 77 percent of the total U.S. impacts: Florida, California, New York, Alaska, Texas, Georgia, Washington, Hawaii, Massachusetts and Illinois.

Indirect economic impacts included expenditures by cruise line vendors and businesses that supply goods and services to passengers and crew. For example, food processors purchase raw foodstuffs, electricity and water to run equipment and process raw materials, transportation services to deliver finished products to cruise lines or wholesalers, and insurance for property and employees.

In 2005, the cruise industry experienced a more moderate rate of capacity expansion than in recent years. Four major new cruise ships were launched, but the size of the North American fleet remained unchanged at 192 vessels as an equal number of ships were withdrawn from the market. Due to larger newbuilds, capacity grew by 2.2 percent for a total combined capacity of 245,755 lower berths. Overall occupancy rose to 106 percent in 2005, due in part, to passenger rescheduling after a number of cruises were canceled during the hurricane season.

U.S. ports continued to handle 75 percent of all global cruise embarkations in 2005. More than 8.6 million cruise passengers began their cruises from U.S. ports, an increase of 6.3 percent over the previous year. Globally, demand for cruising remained strong in 2005, and the industry increased passenger carryings by 6 percent over 2004 to 11.5 million passengers worldwide. U.S. residents totaled 9.1 million, or 79 percent, of global passengers.

The top 10 cruise embarkation ports – Miami, Port Everglades, Port Canaveral, Los Angeles, Galveston, Tampa, New York, Long Beach, Seattle and New Orleans – accounted for 84 percent of all U.S. passenger embarkations. Higher 2005 embarkation numbers were posted by Miami (5.3 percent), Los Angeles (30.9 percent), Galveston (22.1 percent), Tampa (6 percent) and Seattle (18.2 percent).