11.1 million passengers are forecast to cruise on the fleet of the member cruise lines of the Cruise Lines International Association (CLIA) in 2005, according to the organization's Chairman Andy Stuart, who is also executive vice president of marketing, sales and passenger services for Norwegian Cruise Line (NCL).

Stuart broke the 11.1 million down into 9.4 million passengers originating in North America and 1.7 million originating overseas. He also described the forecast as "realistic" and based on a fleetwide occupancy rate of 105 percent. All the fundamentals of the business are very strong, he added.

 Net cruise capacity will be up about 4.6 percent year-over-year from 2004, which counted an estimated 10.6 million passengers, according to Stuart, including 9.0 million North Americans and 1.6 million international passengers. Ships sailed at 105 percent capacity compared to 102 percent in 2003. With 12 new ships introduced last year, the industry saw a 6.9 percent net capacity increase, but carried 11.4 percent more passengers than in 2003, according to CLIA.

Stuart attributed the industry's growth to its offering tremendous value for the money, cruising's all-inclusive nature, more close-to-home ports - appealing to the drive market, reducing the need to fly and lower cost; and the industry's ability to evolve, meeting customers' needs.

"The cost of a cruise vacation for four has gone down as much as $1,000," Stuart added, when airfare can be taken out of the equation.

The closer-to-home ports and the lower price also attract many first timers, according to Stuart.

In the context of product evolution, Stuart also explained the increased onboard spending: "Cruises are still pretty much all-inclusive. What was included yesterday is still there, but we have added much more."

Trends to Watch

Stuart also outlined trends to watch in 2005: The booking curve extending; cruise fares on the rise; European cruises benefiting from the currency exchange rates; more growth in close-to-home cruising; rise in multigenerational travel; increased emphasis on kids and youth activities; increased differentiation in the  luxury segment; and more onboard innovation across all market segments.

Only three new ships will enter the market in 2005: NCL's 2,100-passenger Pride of America in June; NCL's 2,400-passener Norwegian Jewel in August; and Carnival Cruise Lines' 2,974-passenger Carnival Liberty in August.

In addition, Princess Cruises is re-introducing the 1,950-passenger Sea Princess after her stint as the Adonia for sister company P&O Cruises; Oceania Cruises plans to introduce the 684-passenger Nautica in November. She was formerly the R5.

Also, Royal Caribbean International will be adding approximately 300 more passengers to the capacity of the Enchantment of the Seas for a total of 2,250, after that ship is stretched this summer.

Leaving the North American fleet will be Princess' 1,200-passenger Royal Princess, which is going to P&O Cruises; Celebrity Cruises' 1,350-passenger Horizon, which is going to Island Cruises in October; NCL's 1,500-passenger Norwegian Sea, which is being transferred at the end of July to sister company Star Cruises for service in Asia; and Radisson Seven Seas Cruises' 350-passenger  Radisson Diamond, which has been sold and will become a gaming ship in Hong Kong.

European Market

The European Cruise Council is forecasting some 3.5 million passengers in 2005.

P&O Cruises will be introducing the new 1,952-passenger Arcadia in April. She was originally destined to be Cunard Line's Queen Victoria. P&O, which is also transferring the Adonia back to Princess (see above), will instead receive the 1,200-passenger Artemis, which starts service in June. She presently sails as the Royal Princess.

MSC Cruises will introduce the 1,566-passenger Sinfonia in March. She was formerly the European Stars of Festival Cruises.

Iberojet has chartered another former Festival ship, the Mistral, and will be re-introducing her as the Ibero Star.

 Island Cruises will introduce the former 1,350-passenger Horizon in late fall, but has not yet named the ship.

Leaving the European market will be the 1,022-passenger Costa Tropicale which is going to sister company P&O Australia and will sail as the Pacific Star, starting in December.

Fred. Olsen Cruise Lines has purchased the Grand Latino from Iberojet. The ship was originally built in 1973 as the Royal Viking Sky, but has since also done service as the Superstar Capricorn, Hyundai Kumgang, and Golden Princess.

Fred. Olsen said it will take delivery in October 2005 and plans on extensive refurbishment before the ship enters service in early 2006. She is a sister ship to Fred. Olsen's Black Watch which was built in 1972 as the Royal Viking Star, but has since also served as the Star Odyssey.

Louis Cruise Lines has acquired the Seawing from MyTravel Group. The ship was built in 1971 as the Southward of NCL.

And, Costa which has a 17 percent capacity increase over last year, reported setting new sales records in January - with the highest number of bookings in any single day; the highest number of confirmed passengers for any one week; and the highest number of confirmed passengers for any one month. - Oivind Mathisen

Excerpt from the Cruise Industry News Quarterly Magazine: Spring 2005