Next year could be a great year for the cruise industry based on its performance in 1997. The challenge for 1998 will be to continue on the growth course set this year and generate enough market demand to fill not only all the new ships, but the older ships as well.

According to industry sources, Cruise Lines International Association expects to tally up 1997 with approximately 5.1 million cruise passengers, compared to 4.7 million last year. That would be an 8.5 percent increase year-over-year.

Rick James, senior vice president of sales and corporate relations at Princess Cruises and chairman of CLIA, summed up the general industry sentiment, when he said that 1997 will be the most profitable year ever for Princess. In addition, by mid­ December, next year's bookings were 35 percent ahead compared to last year's.

James also said that Princess has seen a slight improvement in yield in 1997 and that 1998 bookings are coming in at slightly higher rates than has been the case this year. James said that yield was up in Alaska, Europe and in the Caribbean.

James noted that the industry overall had reached an 88 percent occupancy rate in 1997, and that the average cruise has increased in length from 6.4 to 6.5 days.

"All indications are very positive for next year, " James said. "There is nothing on the horizon to make us believe anything else than more growth in 1998."

1997- 1998

This year, even though the industry has seen seven new ships introduced, enough old tonnage was sold or redeployed so that there was no increase in ship numbers. But since the new ships are bigger, there was an increase in berths and an overall three percent increase in passenger capacity.

In 1998, based on scheduled new ship arrivals and redeployments, the fleet should grow from 115 to 123 ships boosting passenger capacity from approximately 5.8 million this year to 6.7 million next year.

As can be seen from the chart in the left column, the North American industry will continue to grow its capacity into the foreseeable future. In addition to the ships under construction or presently ordered are new orders expected for the Carnival Corp. family of cruise lines and Norwegian Cruise Line, amongst others. (See "Another Wave" article in Cruise Industry News, Dec. 4, 1997.)

In addition, new ships have been ordered for the growing cruise fleets in Europe and the Far East. (Cruise Industry News will cover these markets in similar reports in future issues.)