While the cruise lines are following traditional deployment patterns in 2009, there may be more changes in store for 2010, pending how this year works out.
More ships are expected back to the Caribbean, as limited and more costly airlift and the recession put long-distance travel out of reach of many Americans. At the same time, more North American-based cruise lines are seeking to tap into local markets for their European programs. The same market conditions and a growing fleet are also forcing European operators to be more creative with their winter deployments.
The first reaction to the changing market condition was Carnival Cruise Lines’ pullout of its two ships from previously announced 2009 European summer programs. The ships will instead by sailing in the Caribbean. Carnival has also increased its offering of short cruises, and is bringing more ships to local markets, thus making the cruises more accessible and affordable to more people.
In Europe, AIDA Cruises and P&O Cruises are offering more shorter cruises to attract first timers who otherwise might not be willing to commit the amount of time and money to a cruise vacation. Royal Caribbean and Holland America Line are also experimenting with short cruises in Europe to introduce their products in markets in Holland, the UK and Scandinavia.
Global Trends
In other developments, Royal Caribbean is reducing its 2010 Alaska capacity from three to two ships, while gearing up its global deployment and sourcing of passengers. In 2010, sister brand Celebrity Cruises will also be dedicating its newest ship, the Eclipse, to the UK market.
Both Royal Caribbean and Princess are also dedicating ships to the UK market, sailing from the UK during the summer, and from Caribbean homeports during the winter.
Meanwhile, more European brands are exploring the Western Hemisphere with both Costa Crociere and MSC Cruises going to Canada and New England, and Pullmantur exploring the Mexican Riviera.
In Asia, Costa is building up its presence with the Romantica replacing the Allegra, alongside the Classica. Royal Caribbean will be deploying the Legend of the Seas year-round in Asia, and AIDA returns for seasonal sailings out of Bangkok. Princess Cruises has two ships sailing year-round Down Under. What the ships have in common is that they are sourcing passengers both locally and internationally.
The Middle East will also see a boost in traffic with build-up of capacity by Costa and AIDA out of Dubai, in addition to Royal Caribbean, which will be sailing seven-day cruises from January through March 2010.
More ships are also venturing to South America, where the winter market so far has been dominated by Costa and MSC.
Creative summer programs are offered by Princess Cruises, which sails northern route trans-Atlantic crossings during the summer, as well as a summer world cruise roundtrip from Sydney.
A growing European fleet is driving local operators to more creative winter deployment solutions with year-round cruises in the Mediterranean, more ships going to South America, Asia deployment, a build-up of capacity in Dubai and world cruises, in addition to the more traditional Caribbean winter programs.
Challenges
The challenges to the ports are many, but the ships bring significant rewards in shoreside spending by the cruise lines, crew and, most of all, passengers.
The bottom line is that ports have something to offer that passengers want in terms of ambiance, attractions and activities, and the required infrastructure is there.
These attractions and activities must preferably be packaged in ways that the cruise lines can sell as tours (shore excursions) and generate financial returns.
On top of that are other considerations such as taxes, port costs or national environmental regulations.
All these pieces of the puzzle must fit together and be workable, according to cruise line executives interviewed by Cruise Industry News.
Cruise lines have also taken steps to ensure their business by building their own terminal facilities. Costa, for example, operates in Savona and Barcelona. Carnival operates in Grand Turk and Long Beach, and will soon open up a new facility in Roatan, while still hoping to build a port in Cancun. Carnival has also helped develop shore excursions with local partners.
Royal Caribbean is working with Jamaica to develop a new port, Falmouth, that will accommodate its 5,400-passenger Oasis of the Seas. The cruise line is also working with Antigua.
Ports are also investing heavily on their own, including Venice, Malaga, San Diego and Seattle. Other ports are investing in facilities in return for long-term contracts and passenger-traffic guarantees, such as Miami, Port Everglades, New York and Port Canaveral.
Itinerary Planning Formula
At the end of the day, the formula is simple: How to generate high demand and high revenues, according to Deanna Austin, senior vice president of planning, yield management and customer service for Princess. She said that the planning focuses on “delivering” both onboard and ashore.
Consumer preferences and internal feedback (from ships and travel agents) are also considered, according to Chris Allen, director of deployment and itinerary planning for Royal Caribbean, Celebrity and Azamara Cruises. “The itineraries must have a fit for the target markets,” he said. “Market research identifies trends and popular destinations. And finally are the constraints of logistics.”
At Holland America, Simon Douwes, director of itinerary planning, also said he is not necessarily planning farther ahead and making longer-term commitments to ports. “Due to the economic downturn we have become a little bit more cautious in our planning,” he said.
Excerpt from Cruise Industry News Quarterly Magazine: Spring 2009
