Though an unusual number of liners berthed at the Prince George Dock over the weekend, with the war in Iraq, the international cruise ship industry is losing passengers and is cutting rates to increase bookings.
Ernestine Sherman, general manager of Destinations, a local travel agency, told The Guardian Monday that because of economic uncertainty, the major cruise lines, including those that service The Bahamas, have been decreasing prices for the past two months on a regular basis.
“A cruise that would normally start at $400 or $500 would go for as low as $200, but this does not include taxes and service fees, which remain the same.”
Ms Sherman said decreased not only because of the war, but because the economy is soft.
“People are trying to hold on to their funds and not do any sort of unnecessary spending until they see how the economy is going and the economy is dependent on what happens with this war.”
The Destinations general manager said despite the rate cuts, she has not seen an improvement in bookings for cruises, which are down by an estimated 20 per cent in comparison to 2002.
“People are still planning and many have just paid their deposits, rather than their full payments,” she said.
Godfrey Huyler, general manager of Arrow Travel and Tours said that March is not the best time of the year for “massive” cruise line bookings, but overall, business is down.
“I could not say how much of it is a result of the war, but I suppose that it might be down now because we have been talking about this war now for quite some time and finally when it arrives upon us, everybody is a little jittery, I suppose,” he said. He hopes that sales pick up during the month of April.
“In February, things move up and then in March they go down a little because February is a regular cruise month where a lot of people start their bookings. Things are down now period, but I suppose that cruise line occupancy will take the same dive as everything else,” he said.
On the other hand, Erica Stuart, general manager of Stuarts Tour and Travel service, said bookings for cruises at her agency have not shown a decline in recent months, but that it is too soon to determine whether there is a decline, as most bookings for cruises are made during July and August.
“Persons are still booking reservations for cruises, despite there being a war going on,” she said.
Though some local travel agents are experiencing a decrease in bookings, the Ministry of Tourism told The Guardian Monday that the number of visitorswho came to The Bahamas on cruise lines in January was up compared to 2002. A spokesperson from the ministry said 268,920 people visited The Bahamas that month via cruise lines, while 252, 011 visited in January, 2002.
Most of that increase resulted from visits to the Family Islands, which recorded 114,303 this January, compared with 82,119 last year.
The Ministry said total sea arrivals, including those by cruise lines, are up 6.2 per cent, recording 276,915 sea arrivals in January, 2003, and 260,853 in January, 2002. In The Bahamas, sea arrivals account for more than two-thirds of the four million visitors annually.
Executive director of the Nassau Tourism Development Board, Frank Comito, said with a war on, he is not sure of how everything in the cruise industry will “pan itself out.” He did say, however, that cruise lines have increased berth capacity and are discounting heavily to fill it.
“We also know that when the lines discount, they get a travel that tends to spend less, so we are seeing a translation of this right now. We are seeing cruise visitors who are definitely spending less and we expect to see this trend continue, because the capacity is high within the industry,” he said.
Jennifer de la Cruz, a spokesperson for Carnival Cruise Lines, the world’s largest line based on passengers carried, told The Guardian Monday that pricing has been down since the beginning of 2003. She said this has resulted from a combination of factors in the United States, such as “a difficult economy, the stock market is down and concerns of a an impending war that is now a reality.”
“None of these factors have been good for the cruise industry from a price standpoint. Pricing was down well before conflict in Iraq even started and it has certainly stayed down. We are getting people on the ships, we are still getting bookings, but people are booking real close to their departure time,” she said, adding that this has been the trend since Sept 11, 2001.
According to Ms de la Cruz, long-range vacation planning has diminished to a great extent, but fortunately, Carnival’s offering of lower prices stimulates business. “We are certainly getting business, but we are just not getting the revenue that we would during more solid economic times,” she said, adding that cruise-industry pricing is based on yield management and changes on a weekly basis.
Carnival Corp. reported a net income of $126.9 million on revenues of $1.03 billion for its first quarter ended Feb. 28, , compared to net income of $129.6 million on revenues of $906.5 million for the same quarter in 2002. Cruise revenues for the first quarter of 2003 were up 14 per cent compared to the same quarter in 2002 due to an increase in capacity of 14.7 per cent, partially offset by a decline in the number of guests purchasing air transportation from the company.
“Our first quarter 2003 results were impacted by concerns about a war with Iraq, an uncertain worldwide economy and historically high fuel costs,” said Carnival Corp. chairman and CEO Micky Arison in a press release. “These factors created an extremely challenging environment for leisure travel businesses around the world. Despite these adversities, we had a reasonably satisfactory quarter, again demonstrating the resiliency of our cruise business,” he said.
Meanwhile, a total of six cruise liners berthed at the Prince George Dock over the weekend, including The Norwegian Majesty, the Majesty of the seas, Fascination, Enchantment of the seas, the Millennium and Costa Victoria.
By Tamara McKenzie, The Nassau Guardian
