Earnings Potential

Commissions to travel agents may provide a significant opportunity for savings, according to a report by UBS.

UBS pointed to Carnival Cruise Lines as having chipped away at distribution costs by growing more direct business. But the financial firm thinks that cutting commissions to agents would be more profitable than increasing the proportion of direct bookings.

The report also said that investor sentiment could shift from its concern about overcapacity to concern about there not being enough unit growth in 2005 and after, which may lead to a more positive view on future orders.

The cruise industry has never been a pricing power story, according to UBS. Instead of getting passengers to pay 10 percent more, growth has been about getting 10 percent more people to cruise.

But onboard revenue has been growing and UBS described it as "high margin, non-commission revenue" that has grown per passenger every year - even in difficult travel periods.

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