Industry Growth
On a global basis, the cruise lines will continue to grow their annual passenger capacity from 16.9 million in 2009 to 17.9 million in 2010, for a 6 percent increase, followed by another 4.1 percent in 2011, 4.4 percent in 2012, and 0.7 percent in both 2013 and 2014, according to the latest estimates by Cruise Industry News. By 2015, the world fleet will have the capacity to carry 19.7 million passengers, based on known new ship orders and announced withdrawals and deployment changes.
2010: Picking Up
This should be the year that the cruise companies return to their historical earnings multiples. That is, barring any unforeseen event. The companies have already learned to operate lean in difficult times; they are managing their fuel costs better than ever; yield management is maximizing ticket revenues; and onboard spending is on an upward trend again. Any uptick in the market and/or dropping fuel prices will add millions to the bottom line.
Disruptions
Just when the cruise industry has seemingly weathered every possible obstacle imaginable over the past few years, it is thrown a new curve ball that no strategist could reasonably have planned for. As volcanic ashes shut down air traffic in large parts of Europe and trans-Atlantic, the big question was what impact this will have on the all-important third quarter summer season in Europe. Will passengers that require air travel be spooked?
Windstar Posts Loss
According to its 10-K filing of March 31, 2010, Ambassadors International, the parent company to Windstar Cruises, posted a net loss for the year ended Dec. 31, 2009 of $15.6 million on revenues of $61.3 million, compared to a net loss of $38.2 million on revenues of $153.7 million for 2008.
Louis Group Results
The Louis Group posted a net loss of 13.7 million euros for the year ended Dec. 31, 2009, compared to a loss of 31.1 million for 2008.
And there is more: Cruise West plans second 300-day exploration voyage in 2011; MSC will be adding a second ship in South Africa next winter; Mexican president emphasizes his commitment to tourism; Celebrity cancels launch celebrations for the Eclipse to help assist returning UK travelers; Carnival reorganizes its hotel management structure; Expedia redefines home-based travel agents; Alaska is offering new value propositions; Pullmantur issues English language brochure; STX reports cost overruns for the Epic; and Costa and MSC will both have ships named Favolosa.
