Can Cruising Survive the Credit Crunch? By Andrea Delucia At Isnare.com Ezine Articles

One of the most obvious changes in the international holiday market of late is the boom in the numbers of cruise passengers. An increasing aversion to flying; the growth in personal wealth from rising property values; a greying population; all are factors that have helped to fill newspapers' travel pages with adverts for cruises.

Cruise lines now have about 40 new ships under construction and ready to come into service by 2012. Many of the new ships are bigger and better than anything that has ever floated before. But is the boom about to go bust with this extra capacity arriving just as the worldwide recession has hit travellers' finances and confidence?

The biggest operator is Carnival Corporation. Their chairman says soaring fuel and steel costs, combined with a weak dollar, have made it virtually impossible to put together a new ship building project beyond 2012 for any of the corporation's North American cruise brands Carnival Cruise Lines, Princess, and Holland America Line. This gloomy prophecy was made, ironically, at a press conference for the launch of Carnival's latest ship, Carnival Splendor.

Carnival's biggest competitor, Royal Caribbean International, appears more optimistic. The company, which includes Royal Caribbean, Celebrity Cruises and Azamara, has placed orders for the largest, most expensive ships ever to be built. Yet it's hard to imagine that cruise bosses are as positive now as they were when they placed the orders.

Judging by the cut-price offers now being made to entice passengers aboard, over-capacity may already be a big issue. It remains to be seen how long the current economic woes will continue and how deep the recession will become. How will cruise passengers react to all the economic bad news? Will those with money to spare stick with their newly acquired enthusiasm for cruising? Or has much of the recent growth been fuelled by credit that's running dry?

In mid-2008, the body that represents the leading cruise companies in Britain, the Passenger Shipping Association, forecast around 1.5 million Britons would take a cruise that year. They expect over 2 million British passengers to be cruising by 2012 and point to an increasing number of affluent older people as the key reason for the growth. Those figures may well have to be revised.

The sheer number of cruise passengers has been causing problems in some ports with large cruise ships arriving at the same time, swamping the facilities. Cruise visitors to Barcelona have virtually doubled in the past five years. Figures from MedCruise show a rise from 398,948 in 2002 to 789,409 in 2007. Fortunately, Barcelona, the second most popular Mediterranean port after Naples, is much better placed to deal with the growth, being a large city with good port facilities.

In contrast, the Venice Port Authority has announced plans for a new cruise ship berth costing £75 million. It is needed to accommodate 1,000 foot monsters such as Genesis, operated by Royal Caribbean, which can carry 6,000 passengers.

Ship numbers and sheer ship size, have brought other problems. Local businesses often do not benefit as passengers have less time to roam around thanks to the longer time spent disembarking and re-embarking. In addition many passengers now go on organised pre-booked tours which means less chance of local shopping and fewer meals taken at local restaurants.

Over the next year or so these are the type of concerns that cruise operators would probably love to be dealing with. But filling these monster ships in a recession might be a much bigger problem. There could be some real bargains on the market very soon.

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