Eleven million passengers are expected to cruise on the ships of the member lines of the Cruises Lines International Association (CLIA) in 2005, according to Andy Stuart, chairman and executive vice president of marketing, sales and passenger services for Norwegian Cruise Line and Terry Dale, president and CEO of CLIA, who spoke at the recent Miami cruise conference.

That is up from the 10.5 million who cruised in 2004, including nine million Americans. Also according to CLIA, 16 percent of the American population has cruised, and three quarters of those who have said they are interested in cruising again within the next three years.

In addition, Stuart and Dale described new consumers as being “connected” – demanding Internet · and cell phone access while on vacation; demanding new experiences – even above cost considerations; and seeking “mass-clusivity” – experiences once limited to the wealthy but now available to the mass market. Stuart and Dale also see a strengthening of the family travel market, while also realizing a need to deliver cruises at lower costs to attract more first timers.

Recovery?

But the industry still has a long way to go before achieving pricing that is fair for the value offered, according to Howard Frank, vice chairman and COO of Carnival Corporation.

He said that the industry may reach 1999 price levels in 2005 which he said was remarkable when inflation is taken into account and that there is opportunity to grow prices much more. “We expect prices (fares) will continue to rise,” Frank noted.

Speaking for Royal Caribbean Cruises, Jack Williams, president and COO, agreed. He pointed out that the industry had not only been impacted by 9/11, but also by the dot-com bubble, a weak economy, the SARS scare and the war in Iraq. “We have a long way to go,” Williams said. “Yet, we achieved record net income in 2004 and see solid demand in 2005. 

“Our guidance for 2005 is that we will get back to pre-9/11 yield levels,” he continued.