Princess 1996 Earnings

Princess Cruises’ parent company P&O has announced operating profits of $250 million for P&O/Princess Cruises for 1996, compared to $175 million for 1995.

Ocean Princess

Princess also announced that it has ordered another sister ship to the 77,000-ton, 1,950-passenger Sun Princess for delivery in late 1999. The new ship, to be named Ocean Princess, follows the Dawn Princess, which will be introduced next month, and the Grand Princess and Sea Princess, both arriving in 1998.

Grand Princess to Europe

The 109,000-ton, 2,600-passenger Grand Princess will be introduced in Europe next summer, sailing a 12-day program between Barcelona and Istanbul. She will then make a trans-Atlantic sailing from Barcelona to New York prior to beginning her maiden Caribbean season.

P&O/Princess Cruises Chairman and CEO Tim Harris pointed out that the 43 percent increase in earnings had been achieved against a 13 percent increase in capacity.

(Total taxable profit for P&O was $517.9 million for 1996, compared to $320 million for 1995.)

P&O/Princess Cruises has not yet released further details but it is believed that the operating margin is about 15 percent which would give the cruise operations total revenues of nearly $1.7 billion for 1996.

Last year, the two cruise companies operated a total of 13 ships (Princess, P&O, Swan Hellenic) with 15,820 berths and an estimated annual capacity of 614,260 passengers.

It is estimated by Cruise Industry News that if the average P&O/Princess Cruise is of 10-day duration, Princess would record 6,142,600 passenger days which would translate into $276.87 in revenue per passenger day and $40.70 in operating income per passenger day. All of which compare favorably to the other leading cruise companies.

Sun Princess

Princess Cruises President Peter Ratcliffe attributed the increase to the positive reception of the Sun Princess, plus the company’s consistent marketing efforts and positive relationship with travel agents. “Besides,” he added, “the new ship has commanded higher rates while being more efficient to operate.”

Ratcliffe also noted how Princess will continue to grow its destinations consistently with the new ships. Meanwhile, the existing ships are being deployed in other Princess programs ranging from trans-Canal sailings to what Princess calls its “Exotic” and “Super Exotic” cruises.

Ratcliffe said that Princess will continue to build new ships and that the future may very well include another Grand Princess-sized ship as well.

In addition, P&O Cruises will soon be ordering another ship in the Oriana-class for the U.K. market.

Longest European Summer in ’98

Taking the industry by surprise, Princess decided to position the Grand Princess in Europe next summer after much industry debate on how these big ships, which cannot transit the Panama Canal, are limited to the Canbbean.

Sailing 12-day cruises between Barcelona and Istanbul, the Grand Princess will call at Monte Carlo, where passengers will be tendered in; Florence, Naples/Capri, Venice, Athens and Ephesus, where the ship will be able to dock.

All the ports of call have infrastructure that will easily accommodate and absorb passengers and crew.

Fares for the Grand Princess’ 12-day cruises start at $3,495 per person, including early booking discounts (50 percent off the second passenger fare if booked before Feb. 28, 1998), airfare and overnights in both Barcelona and Istanbul, according to Richard James, senior vice president of sales and corporate relations, who also said that a brochure will be available in the next couple of weeks.

Also in Europe next summer will be the Royal Princess, conducting northern Europe and eastern Mediterranean cruises, as well as the Pacific Princess and Island Princess, offering a series of programs, including cruises beyond the Arctic Circle.

Altogether Princess will offer 45 sailings with 17 different itineraries in Europe in 1998 – a 40 percent increase over 1997.

Luxury Focus

Princess, which has traditionally been a premium and contemporary product, is also taking a stab at the luxury market.

All the Princess ships in Europe Will be featuring butler service for all the suites and mini-suites. According to James, specially trained butlers will augment regular stateroom stewards to provide touches found in luxurious hotels, such as polishing golf clubs, booking shore excursions, delivering afternoon tea, arranging for dry cleaning, laundry and shoe shines.

In addition, James pointed out that the Grand Princess has more suites and mini-suites than two entire suites-only ships. “We believe that a significant segment of the luxury market’s passengers are going to be attracted by the combination of service and amenities we will offer.”

The Grand Princess will also have 710 staterooms with private balconies and will feature some of the largest standard accommodations at sea, James said.

“What we are realizing is that many people cruise on the small luxury lines to enjoy the extraordinary service and personal attention they promise, but they are also intrigued by the huge choice and variety of amenities on a ship like the Grand Princess,” James added.

“Of course, a really big attraction will be that we can offer this at a considerably lower price than the luxury lines.”

According to Princess, the new Ocean Princess is destined for Alaska and the Caribbean, meaning that the Grand Princess may very well be returrung to Europe in 1999.

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