Cruise ships are high-risk ventures, according to spokespersons for several U.S. banks, who also said their institutions tend to be unwilling to consider long-term financing for cruise ships, based on the premise that they last longer than other vessels. However, after a normal financing period of seven to eight years, cruise ships can be refinanced.

Risk elements associated with cruise ships include their vulnerability to the political and social stability of their ports of call, their sensitivity to recessionary forces; and their dependence on a continuous cash flow.

According to some sources, cruise ships, by definition, are cargo ships that carry people rather than products or raw materials, and they too, have inventories that wear down. As a result, many banks and financial institutions do not see a reason to grant cruise ships longer financing terms than they grant regular cargo vessels. And, as many pointed out, cruise ships face tremendous overhaul costs to remain in service.

While other sources said they approach cruise ship financing as they do hotel financing, most said the banks' key consideration is the professional level of the cruise ship operators.

Little or no development in big U.S.-flag ships is seen, unless major U.S. corporations decide to enter the cruise industry. Although many plans for U.S. flag-ships are announced, most die a quiet death because of failure to obtain Title XI financing.

Shipbuilding is also expected to remain concentrated in Europe, as European governments are willing to offer extensive subsidies. While Far Eastern yards, especially those in South Korea, appear to have the capability, sources stress that cruise ships are extremely complicated.

Alternative financing has been limited to private ownership, limited partnerships, and shipyard/government subsidies. Only Gotaas-Larsen (1/3 of RCCL), P&O and Trafalgar House (Cunard) shares are traded freely.

Other forms of financing, including timesharing, have not worked out.