From the Newsletter 7/2/09

Reduced Earnings
Royal Caribbean Cruises has cautioned that higher fuel prices and the swine flu will reduce its full-year earnings, in addition to increased interest expenses and foreign currency adjustments. The street consenus is $1.10 per share, compared to the company’s April guidance of $1.35. In its second quarter conference call on June 18, Carnival Corporation reduced its earnings guidance to $2.00 to $2.10 from $2.10 to $2.30.

Shrinking?
Is the North American cruise market shrinking? When the passenger traffic of European-based members of the Cruise Lines International Association is subtracted from the “official” passenger numbers, in addition to the increased foreign passenger sourcing of the North American brands, the American market may be generating fewer passengers in 2012 than in 2009, if the trend continues.

Greenland
While more cruise ships have been discovering Greenland, there will be little growth or even a decrease in traffic in 2009 due partially to the economic downturn as well as the lack of airlift to Greenland, according to Malik Milfeldt, cruise consultant to the Greenland Tourism and Business Council. The forecast for 2009 calls for “more than 25,000 passengers, compared to 28,891 in 2008, and “less than 30,000 in 2010,” according to Milfeldt.

To promote more cruise traffic, Milfeldt said that Greenland will introduce what he called a “North Atlantic brand” (itinerary) together with other North Atlantic destinations in September (Cruise Newfoundland and Labrador, the Port of Reykjavik, Orkney and the Port of Torshavn).

In 2008, cruise passengers generated more than $5 million in direct spending in Greenland.

Luxury Growth
Overall, the luxury market will see little if any growth in 2009, despite the new Seabourn Odyssey ship, due to deployment changes and longer itineraries. In 2010, however, market capacity will jump by 18 percent, 7.5 percent in 2011 and approximately 3 percent in 2012, when total North American passenger capacity in this segment will be about 258,000.

Alaska 2010
Alaska’s cruise capacity will be down 13 percent in 2010, compared to 2009, according to estimates by Cruise Industry News. For 2010, Alaska, which is the sixth largest sailing region in the world, anticipates 828,484 passengers – compared to 950,988 in 2009 – which is up 3 percent over 2008.

Cruise lines surveyed by Cruise Industry News said they were not ready to commit to the 2011 season yet.

And there is more: SOLAS relief; the recent most cruise survey from the Susquehanna Financial Group; the latest cruise deals on Travelzoo’s Top 20 list; issues facing cruise tourism in Bermuda; latest update on air standards and the proposed ECA; about the Atlantic Alliance –a viable alternative to the Baltic and Norwegian fjords; and more.

FOR THE FULL REPORTS, READ THE JULY 2 ISSUE OF CRUISE INDUSTRY NEWS, THE NEWSLETTER. SEE SUBSCRIPTION INFORMATION OR CLICK HERE.