Executives: The cruise industry not only will survive the downturn, but thrive

mercedes · March 18, 2009

MIAMI -- The economy may be in one of its worst downturns in decades, and there's no doubt the cruise industry is hurting. But in the words of Holland America CEO Stein Kruse, "this, too, shall pass."

"The situation we're in, as bad as the economy is, is temporary," the longtime cruise and shipping executive told a room packed with hundreds of industry leaders today at the start of the annual Cruise Shipping Miami convention -- the industry's biggest get-together.

Kruse was one of half a dozen cruise line CEOs on stage for a kickoff panel on the "state of the industry," and he urged his colleagues in the cruise business not to "get caught up in this situation where it's all doom and gloom."

Another top industry executive, Carnival CEO Gerry Cahill, echoed the upbeat message, though he admitted things were tough in the business.

"Consumers have all gone through a divorce, even if they didn't know it," Cahill told the audience, noting that people are "opening their mail and discovering half of their net worth is gone."

Cahill adds that people in California and Florida -- two of the largest source markets for cruisers -- have been some of the hardest hit by the downturn. If 2008 was the year of the "staycation," some are saying 2009 will be the year of the "no-cation," he noted. "This is all very scary stuff."

Still, even with all the job losses, home foreclosures and other negative financial fallout of the economic downturn, Cahill noted that Carnival continues to fill its ships, "week in and week out . . . overall, the cruise industry is well positioned to take on the economic challenges. It will take time but we will see calmer seas ahead."

Like Kruse, Cahill urged his colleagues to look to the future. "Our industry needs to look at these times as a way to grow market share," he says. "Now is not the time for the industry to hold back."

Celebrity Cruises CEO Dan Hanrahan noted that the average booking window at Celebrity has shortened significantly since last year, but he said it's a temporary phenomenon. "I think the consumer needs to see that the economy is starting to recover," he says. "When the consumer gets that confidence I think you'll see the booking window extend again."

Several executives, including Kruse, blamed the media for some of their troubles.

"We're not being helped by the mainstream media, (which is) continuing to talk about the situation that we are in," says Kruse. "We are sort of being told to be scared. We are being told not to spend. We are being told that there is a crisis . . . the reality is that more than 90% of people live in their homes and pay their mortgages, more than 90% of people have jobs."