At the half-year mark, 1992 looks to be a much better year for the industry than 1991, but the cruise lines are clearly facing more hurdles in the months to come. The market is still strugglig to absorb the new capacity while in the clutches of the recession which refuses to go away.

While industry executives are upbeat, their actions speak for themselves:

Rates

Carnival Cruise Lines has announced a range of discounts for the fall season and that it is holding most prices for 1993. In addition, the line's early booking program guarantees current rates for sailings through 1993 if booked and deposited by October 31, 1992.

According to Robert Dickinson, Carnival's Senior Vice President of Sales and Marketing, the company's pricing strategy is aimed at maintaining consumer confidence in the strong value/price relationship of cruises.

Norwegian Cruise Line announced some time ago that it is holding 1993 prices and port charges at 1992 levels until further notice. The line's 92/93 brochure lists prices through July 1993 and reservationists will accept bookings for all 1993 sailings up to Christmas and New Years for which prices have yet to be determined.

Princess Cruises is raising 1993 rates slightly on its exotic programs, but holding 1992 rates in the mass market, according to a spokesperson.

Royal Caribbean Cruise Line has announced that it is raising 1993 brochure prices on the average 5.5 percent over 1992.

While last year's deep discounts are gone, various discounts and early booking programs now in effect can give passengers a price reduction off the brochure rates as high as 30 percent on selected sailings with some of the cruise lines.

Bob Falcone, Chairman of Cruises Inc., a cruise agency, said that his agency has seen the average price paid on a cabin, based on double occupancy, increase from $2,380 to $2,460 over the last four months. He said that was particularly encouraging since these bookings are for the fall season. Falcone's firm sells space on most of the contemporary and premium class ships.

Falcone also noted that today's rates were in the same range as those his firmed cleared in 1985/86.

Redeployments

In 1993, redeployments will produce capacity increases in Bermuda: 20 percent; Alaska: 10 percent; and Europe, three percent. In addition, some cruise lines will see sharp capacity increases in several markets, for instance, RCCL jumping 70 percent in Europe; and NCL, by 60 percent in Bermuda.

Further capacity increases will be brought on by new tonnage.

Next spring, Carnival will reposition one of its ships, most likely the Mardis Gras to Europe, temporarily reducing its capacity in the North American market. In addition, Carnival will also be "testing" 10- and 11-day itineraries for the first time later in 1993.

In May of 1993, NCL will reposition the 740-passenger Westward from the West Coast to Miami where she will be sailing three- and four-day cruses. The 758-passenger Starward will replace the Westward in Los Angeles and will herself be replaced by the new 1,250-passenger Windward in San Juan in June.

But first, in December of 1992, NCL will introduce the new 1,250-passenger Dreamward sailing out of Fort Lauderdale during the winter and from New York to Bermuda during the summer months. The Dreamward will increase NCL's capacity in Bermuda by 60 percent.

Princess will also be moving ships about in 1993 when the line will be increasing its capacity in Alaska by some 25 percent. The line will operate smaller ships in Europe maintaining this year's capacity level with more sailings.

RCCL may have embarked on the most ambitious redeployment program.

The 1402-passenger Song of America will replace the smaller 1,012-passenger Nordic Prince on seven-night cruises from New York to Bermuda during the summer, increasing RCCL's Bermuda capacity by nearly 30 percent.

Beginning in November, the Song of America will sail a winter season 10- and 11-day cruises between Miami and San Juan.

The Nordic Prince will spend the summer of 1993 in Alaska replacing the 728-passenger Sun Viking increasing RCCL's Alaska capacity by about 30 percent. During the winter, the Nordic Prince will sail weekly from Los Angeles to Mexico.

In Europe, RCCL will be increasing its capacity by some 70 percent when the Sun Viking, which sails in Alaska this summer, will spend the summer of 1993 there with the 1,022-passenger Song of Norway, offering 12-day cruises.

The Sun Viking will continue to spend winters in the Caribbean sailing seven-day cruises from San Juan but will introduce a modified itinerary in December 1993, that includes St. Croix, St. Barts, Guadeloupe, St. Maarten, St. John and St. Thomas.

At press time, the Song of Norway's South America program was not unexpectedly cancelled.

According to a RCCL spokesperson, company executives cited poor market interest caused by safety concerns and political unrest in the region. The Song of Norway bad been scheduled to sail a series of South American cruises in the first quarter of 1993. The Song of Norway will now sail a winter program of transcanal cruises before turning to Europe for the summer.

RCCL's other five ships will continue on their current year-round schedules.

Battles Brewing?

The biggest regional battle brewing for 1992 may be in Bermuda where the cruise lines will have to generate 20 percent more passengers in 1993 than in 1992. The two "hottest" products in that market should be NCL's new Dream ward and Celebrity Cruises' Horizon.

Fort Lauderdale will be another hot spot where the Dreamward will be joining a fleet of new premium and upper-end contemporary market ships including Celebrity Cruises' Zenith; Costa Cruise Lines' Costa Classica, Costa Allegra and Costa Romantica; Holland America Line's Statendam; and Princess Cruises' Regal Princess and Crown Princess.

In Palm Beach, Crown Cruise Line is doubling its fleet with the new Crown Jewel being added to the nearly new Crown Monarch.

Strong competition can be expected between these cruise lines since they offer premium and upper-end contemporary market products that would seem to overlap in many aspects.

Ten- and 11-day and transcanal cruises are also suddenly becoming extremely popular with Carnival, Celebrity, Crown, Hal, Regency Cruises, and RCCL among those offering such sailings.

In Miami, the three- and four-day market will beat up again with the addition of Majesty Cruises' 1,100-passenger Royal Majesty providing a 22 percent increase in capacity.

At the very top end of the market, Royal Viking Line is committed to maintain its position as the very best. Crystal Cruises, Seabourn Cruise Line and Cunard/Sea Goddess are equally determined to fight for the honors, however. Also claiming to be in this market are Classical Cruises, Radisson Diamond, Renaissance Cruises, and Seven Seas Cruises.

Caribbean Relief

At the half-year mark, the outlook for 1993 is improving. The cruise lines are also reducing their summer capacity in the Caribbean. As a result, the operators who are there should obtain better load factors and better prices until the market can absorb the new tonnage and the American economy returns to normal.

The interesting question now will be bow the other markets can absorb the capacity increases.