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Cruise operators upbeat despite stormy economy, rising oil
2008-03-16
The global cruise industry is putting on a brave face as it sails into seas darkened by a faltering US economy, a weak dollar and record oil prices, major cruise ship operators said at their annual convention. The triple threat represents serious risks for the industry which has been blessed with dramatic growth over the past decade. But cruise representatives are confident that the powers of globalization and the opening of new cruise destinations such as Asia and South America can help them weather the storm. "All the information we hear and read today is negative," Gerald Cahill, president and chief executive officer of Carnival Cruise Lines, told the "Seatrade Cruise Shipping" convention, the most prominent annual gathering of international cruise operators. "If you ask, the middle-income consumers will tell you (they) are already feeling the effects" of an economic downturn, Cahill said. "But we feel we are very well positioned to withstand uncertain economic times," he added, reflecting the views of other cruise companies which also expressed optimism despite dour economic forecasts. The industry has boomed in recent years, with the Cruise Lines International Association (CLIA) reporting 12.6 million passengers in 2007, up from 12 million in 2006. Despite a possible recession in the United States, CLIA is predicting 12.8 million passengers in 2008. Richard Sasso, president of MSC Cruises, was among those confident that his industry would remain resilient. "Unless the oceans of the world dry up, you're going to see cruise growth," Sasso said. The convention which wrapped up late Thursday was organized by CLIA and the Florida Caribbean Cruise Association, the latter overseeing more than 100 ships and 11 cruise lines -- including Carnival Corporation and Royal Caribbean, the two largest cruise ship operators in the world. Thousands of firms from 111 countries participated, hearing experts tout the latest onboard innovations, promote plans for new international destinations, and debate the future of the industry as a whole. The massive growth in the cruise market in South America and the need to improve infrastructure in the region's cities was among the themes analyzed. South America overall doubled and in some regions tripled its cruise ship arrivals in the last five years. "They are locations with an abundance of nature and beautiful cities and culture, but they lack the necessary infrastructure," said Svein Sleipnes, a vice president for Norwegian Cruise Line. Several Latin American cities host more than five cruise ships per day, and the ports and commercial networks -- particularly hotels and businesses -- have not kept up with demand, the cruise companies say. "Venezuela has money, but no experience in project development in the sector," said Miguel Henriquez of the Venezuelan firm Sealink. According to a Venezuelan directive, by 2010 the government of Hugo Chavez wants to build two 500-passenger cruise ships and secure deals with international lines by offering them gas at a discount. In Europe the forecast for this year is also encouraging. Spain, one of the destinations with strongest demands on the continent, predicts it will receive some 8,000 cruise ships in 2008, a notable increase over the 7,094 that docked at its ports in 2007, according to the country's tourism officials.
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