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Posted By Cruise Market Watch / 14th January 2009
Is the bottom in? Our monthly Cruise Search Index reflects change in cruise demand and online search market share. For the month of December 2008, U.S. online cruise search is estimated at 7.3 million monthly unique individuals. This represents an increase of 3.8% versus last month and 0.2% versus the same month last year. This may be an early signal of stabilization after four consecutive months (Aug-Nov) of year over year declines.
| % Change for December ’08 |
| vs Last Year | vs. Last Month |
| Total Internet Traffic | 3.7% | -0.1% |
| Total Cruise Search | 0.2% | 3.8% |
Percentages in the charts below represent the approximate share of all online cruise traffic.
Chart 1 – % of traffic for top Cruise Lines from all cruise related traffic (click to enlarge)
Chart 2 – % of traffic for top booking sites from all cruise related traffic (click to enlarge)
Posted By Cruise Market Watch / 23rd November 2008
5 – Silversea Cruises – Silver Spirit
Number five on our list, Silver Spirit evokes the luxurious quality of the shimmering precious metal. The styling will be a chic 1930′s Art Deco; yet feature the latest modern innovations and maritime advancements. As Siversea’s new flagship, its interiors will focus on distinctive luxuries including an expanded spa and even larger suites – 95% featuring a private veranda. The Silver Spirit debuts in December 2009.
4 – Celebrity – Equinox
As sister to the Solstice, the Equinox deserves ranking on this list for genetic reasons alone.
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3 – Carnival – Dream
This amazing Dream is likely to be an experience you wont want to awake from. It will be a standout in the Carnival line, unlike any other Carnival ship in the fleet. According to John Heald “it seems the stylists were allowed free rein — and to hell with the cost.”
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2 - Yachts of Seabourn – Odyssey
This comfortable 450-passenger yacht will be the first luxury cruise ship built in over six years. Guests will feel special and cared for by everything from scented Pure Pampering baths drawn by the stewardess to an intimately shared Caviar on the Surf beach party. The Odyssey will maintain Seabourn’s famous industry highest crew to guest ratio.
Among the Odyssey’s exotic sailings include Seabourn’s first-ever World Cruise in January, 2010. The 108-day voyage travels from Bora Bora to Bali, Sydney to Saigon and Hong Kong to Istanbul, and touches five continents. The Odyssey will launch her inaugural year itinerary from Venice on June 24, 2009.
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1 – Royal Caribbean – Oasis of the Seas
With a passenger capacity of 5,400 – need we say more? The monstrous worlds largest-to-be cruise ship had to have ports of call retrofitted just so the mammoth ship can dock. With 7 neighborhoods, it has been referred to as a floating suburb. The ship, in fact, is becoming a destination in and of itself.
Posted By Cruise Market Watch / 22nd November 2008
Norwegian Cruise Lines Pearl and Star in Skagway (Photo credit: Jill Clardy)
Miami, FL (PRWEB) November 28, 2008 — Cruise Market Watch updates 2009 cruise industry market statistics based on current economic conditions and anticipated new ship builds.
Among the 2009 highlights:
- Total worldwide cruise passenger capacity will increase 7.0% over 2008
- Annualized total passengers carried worldwide in 2009 is estimated at 16.5 million
- The total worldwide cruise market is estimated at $26.9 billion, a 1.4% decline from 2008
While cruise lines will significantly increase passenger capacity with the addition of new ships, pricing pressures to fill them in 2009 should negatively impact per passenger revenues. However, the combination of attractive pricing, innovative ships designs for select traveler markets and significant marketing efforts around the astounding new ships will provide opportunity to introduce new cruisers to the cruising experience. This will stimulate market growth for the industry through 2011. By the end of 2011, revenues are projected to increase 13.5% and passengers carried 13.8% from 2009.
With cruise line stocks Carnival Corp (NYSE: CCL) and Royal Caribbean (NYSE: RCL) trading around 70% off 52-week highs shares appear oversold, according to Ryan Wahlstrom, founder and publisher of Cruise Market Watch. The cruise industry has seen fears of overcapacity before. In 1990 new ship construction by cruise lines resulted in the addition of 15,000 berths – a 26% increase from 1987. Cruise lines proceeded to perform exceptionally well over the subsequent two decades. With cruise currently accounting for just 2% to 4% of market share for the total vacation industry, there remains plenty of room for growth.
“It’s all about creative ways to get the cruise line’s brand in front of non-cruisers,” comments Wahlstrom. By partnering with non-travel brands that resonate with a given line’s target market and by communicating the experiences of the ships, such as spas or exotic destinations, prospects that are already vacationing in other ways will try a cruise.
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Posted By Cruise Market Watch / 19th November 2008
I ran across this article published July 25, 1987 in the New York Times.
“Overcapacity Also Feared. Of more concern to many analysts is that the optimism expressed by Mr. Arison and some competitors may open the industry to overcapacity. According to the Cruise Line Industry Association, new ship construction by its members will result in the addition of an estimated 15,000 berths – a 26 percent increase – by 1990.
That fear may already be represented in the market performance of the other publicly traded cruise lines. Regency was offered at $1.50 a share… American Cruise Lines has fallen from $3.125 at the end of 1986, to $2.25 in O-T-C trading yesterday, and Bermuda Star Line, offered at $6 a share, closed yesterday at $4.875 on the American Stock Exchange.”
Fast forward 20 years later to November 13, 2008 in Business Week.
“With customers galore a few years ago, the industry ordered an armada of bigger, fancier vessels. Because they take so long to construct, the new ships are now just hitting the water. Royal Caribbean will add six ships by 2012 at a cost of $6 billion. Rival Carnival Cruise Lines (CUK) estimates the industry will launch 38 ships in North America and Europe over the next three years, adding 28% to capacity.”
To quote Yogi Bera “It’s deja vu all over again.”
While Regency, American and Bermuda Star are gone, the point is history and human behavior teaches us lessons. For one, we typically overreact, particularly if it is the tone of a media headline looking to drive readership. The second is, despite perceived overcapacity in 1987, the industry performed amazingly well over the subsequent two decades.
I anticipate the next two decades will be equally as fruitful. According to the Allied Academics International Conference the cruise industry holds only two percent of the market share in the total vacation industry. Only 45% of the target North American market has EVER cruised – and there is no reason over time this can’t rise to 70%-80%. A tailwind to this growth will be a better educated, higher income population “on the threshold of a boom” as a 2005 report by the U.S. Census Bureau described the aging population. The first baby boomers turn 65 in 2011.
Posted By Cruise Market Watch / 1st October 2008
Carnival shares have certainly experienced considerable volatility the past few weeks, rebounding from 3-year lows in early July only to be knocked down a second time. Given an unusually aggressive analyst downgrade, possibility of high long-term oil prices and a stunningly scary national economy the pps is actually holding up pretty well.
The short-term technicals indicated a buy signal when the stock bounced after the downgrade news, moving back above the $34 mark.
PPS rode below the lower bollinger band, RSI turned up, MACD line turned up and Slow Stochastics headed above the 20 mark (note arrows in chart, click for details).
Today, CCL has resistance in the lower $37′s and I would sell a move into that area.
In the mid-term range the stock is likely to test the $30 area again. A move below support at $34 indicates a short sell opportunity with a cover at $30.
Deutsche Securities massive one time -39% drop in price target for Carnival to $32 from $52.50 was intriguing. He cited Carnival’s “need [for] a ‘strategic shift’ to cope with high fuel prices and shipbuilding costs.” Suggesting “with rising shipbuilding costs exacerbating this issue, we believe that Carnival needs to shift to a returns-driven philosophy, where the group raises cruise prices and reduces commissions.”
Interestingly with all the recent shipbuilding activity, there comes a danger of overbuilding – if one company adds a ship, then the other company needs to add one too just to maintain its market share. The challenge will be to know when to stop short of “mutually assured over capacity.”
Long-term it is widely agreed there is much positive growth remaining for cruise lines. But with a tougher economy as a possibility over the next couple of years, and higher fuel costs cutting into margins, the danger remains that the more expensive cabins will not be filled or require discounting. Cruise lines need to increase the number of high ticket paying passengers through marketing. But higher end travelers tend to be more fickle, since they have many more options available to them.
In a related note, Susquehanna Financials monthly survey of cruise travel agents found that advance cruise bookings in August fell 6.1% year-over- year, the worst decline recorded since the survey began three years ago. Prices ticked up 2.9%.
This exactly mirrors and supports the findings from both the August 2008 CruiseSearch Index and Cruise Price Index.
- Carnival Pushes Farther into Asia (cnd-cruiseblogger.blogspot.com)
Chart 1 – % of traffic for top Cruise Lines from all cruise related traffic (click to enlarge)
Chart 2 – % of traffic for top booking sites from all cruise related traffic (click to enlarge)
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