It's full speed ahead for Cruise Lines!!

[JoeyandDavid]

The world's top cruise lines rely heavily on North American passengers, but will not let the recession keep them from scouring Europe, Asia and Latin America for new customers and destinations.

Instead of cutting costs by easing away from markets outside North America, which accounted for 10.2 million of the 12.6 million cruises taken in 2007,cruise executives said on Tuesday the fast growing leisure segment was looking far beyond its mainstay Caribbean and Alaskan routes.

"There's a 100 percent chance that the trend of global expansion of the cruise industry will continue," Royal Caribbean International President Adam Goldstein said at a conference. "This isn't made easier by current conditions, but it isn't going to be stopped by them."

Goldstein, whose line is a unit of Royal Caribbean Cruises Ltd said a sure sign of the sector's future beyond North America came in the last three weeks, when neither a Royal Caribbean ship nor a Celebrity ship could find an open berth at Sydney, Australia, a city that once saw few cruise liners.

Some deployments away from itineraries favored by North American passengers were meant to offset soft U.S. pricing, according to executives, but the overarching reasons are strategic and have to do with segment growth.

"Most of the other markets are virgin, in a sense, compared to North America," said Richard Sasso, president of privately held MSC Cruises USA

Inc.

Executives at the Seatrade Cruise Shipping conference said yearly cruise penetration, even in significant markets such as Britain and Germany, was much lower than North America's 3.5 percent and was lower still in other regions.

"If the United Kingdom and Germany had the U.S. cruise penetration of 3.5 percent, there would be an additional 2 million (cruise passengers a year), just from those two countries alone," said Stein Kruse, chief executive of Holland America Line, a unit of Carnival Corp .

Australia's cruise passengers would double to about 1 million a year, if the 3.5 percent penetration rate was met there, Kruse said.

Cruise lines were being welcomed in many Asian destinations, where officials were investing in ports and other infrastructure, according to Goldstein."It's very refreshing to see these beginning to happen in Singapore, Hong Kong and other places. That will allow the biggest and greatest cruise ships in the world to frequent those destinations," Goldstein said.

Cruise operators, including giants Carnival and Royal Caribbean, are caught up in the global recession, even as they are scheduled to add 11 new ships in 2009, according to Chris Hayman, chair of Seatrade Communications Ltd.

Both Carnival and Royal Caribbean have suspended quarterly stock dividends and reported drop-offs in fares and on-board spending by passengers, but executives on Tuesday pledged to keep advertising heavily as a way to build repeat customers.

"It's the biggest mistake we could make, to cut marketing, in this environment," Carnival Cruise Lines President Gerard Cahill said.

[sailingrose]

Time will only tell the future of the cruise lines......if they can hang on........

[lashl]

The cruise lines are just like any other business in this market. You had better get creative and come up with some new ideas. I think they will be alright.

[deb1220]

I think they'll survive. I agree with Steve - they've just got to come up with new ideas and incentives.