To Cruise Or Not To Cruise, Really, Is Not The Question
Despite the threat of a slowing world economy — and particularly a slowing U.S. economy due to the collaboration of financial fiascoes brewing, simmering and boiling in Brazil, Asia and Russia, respectively cruise companies appear to be better prepared for an economic drawdown than ever before.
The cruise industry has embarked on a fantastic, some would say fanatical, run for the past five years, and is now poised to add record amounts of new ships to an already relatively modern fleet. In 1999 alone — which is scheduled to include the delivery of the world's largest ever cruise ship, the 142,000 ton, 3,100 passenger Voyager of the Seas for Royal Caribbean from Kvaerner Masa Yards - Turku — there are more than 15,800 cruise berths scheduled to come on line, followed by more than 33,000 berths combined in 2001 and 2002, if all currently planned contracts are executed. It is expected that this fleet modernization, combined with the aging demographics of the U.S. — the cruise capitol of the world — will more than adequately buffer any economic downturn, allowing cruise companies to ride their most expensive assets.
Technically, cruise ships have traditionally featured cutting edge marine technology, given the high value and sheer number of their human cargo. And while it is surely impossible to provide 100 percent protection against accidents, it can safely be said that advances in materials, machinery, electronics and training have drastically improved the operational safety and efficiency of cruise ships worldwide. Feeding The Fire New York-based Cruise Lines International Association (CLIA) has a lock on providing rosy projections regarding the future of the cruise market. Its members are most all of the significant cruise players who market from the U.S. and Canada, as it represents 97 percent of the North American marketed berths. CLIA tracks the plethora of information regarding potential ridership and cruise fleet expansion which is utilized in short and long-term fleet planning.
According to CLIA, the cruise industry has enjoyed phenomenal growth from 1980, enjoying an average annual growth rate of 7.9 percent. The organization projects that over the next five years, the cumulative market potential for the cruise industry is $54 to $97 billion. To put the growth in perspective, in 1980 just 1.4 million passengers purchased cruises, while in 1997 more than five million passengers traveled on cruise ships. CLIA projects that 6.5 to 7 million persons will take a cruise, pointing to statistics which sugges