Thursday, October 30, 2008

Miami-based cruise lines map different routes through a struggling economy

With economic conditions making waves globally, signature Miami cruise lines are mapping different routes to calmer waters. Carnival Cruise Lines announced this week that a ship scheduled to move to Europe in May is to remain in Miami operating Caribbean cruises instead. A ship meant to shift in April from Long Beach, CA., to Miami and later to Baltimore will instead move directly to the Maryland port four months early to begin the city's first year-round cruise program. "Based on current market conditions, continued economic uncertainty and high air costs to Europe, we are shifting our focus to an even greater extent toward our core, close-to-home cruise options, which are clearly the preference of the vast majority of the mainstream vacation market right now," said Gerry Cahill, president and chief executive officer, in a press release. Carnival did not respond to a request for further comment. The company's third-quarter earnings show that the cruise line saw a dip in net income, dropping to $1.3 billion from $1.4 billion in last year's third quarter.
However, revenue rose year over year: the company generated $4.3 billion third quarter of 2007 and $4.8 billion the same period this year. The cruise line still plans to offer European voyages next year when its newest and largest ship, the Carnival Dream, debuts next fall. Royal Caribbean Cruises, another major cruise operation based here, has not announced any changes to its itineraries and destinations, said Ian Bailey, vice president of investor relations, in an interview. Should the need arise to tweak plans, the line is established enough in both North America and Europe to accommodate, he said. "If one market is particularly strong relative to the other one, or weak, you could source from the other market, so it does give you some flexibility in getting the ships filled." The cruise line saw record earnings in the third quarter of this year, with net income hitting nearly $412 million compared to $395 million from Cheap Cruises the year before. Still, in recent months, Royal Caribbean has seen a dip in bookings, while Discount Celebrity Cruises Alaska have been doing great. "Up until September of this year, bookings had been very robust, but over the last six-to-eight weeks we have seen a disruption in the volume of bookings that we've been taking for the year," Mr. Bailey said. The company expects fourth quarter yields to fall anywhere from 4% to 5%, according to an earnings announcement. "We don't know if this is the beginning or middle or end" of the drop in bookings, Mr. Bailey said. "Our visibility into 2009 is a little less clear." Royal Caribbean is taking a "wait-and-see" approach before changing any plans, he said, not because officials are "asleep at the wheel," but because "this is a very new disruption for usÖ certainly we would react appropriately as we get more data and understand better what's happening in the markets."

Last-minute cruise deals starting under $60, $40 and even $25 dollars per day

I had always thought that if you could get Cheap Cruises, Cheap Europe Cruises and Cheap Caribbean Cruises for under $100 per day, it was a decent price and dare I say, had come to be the standard way of measuring cruise rates (unless you were taking a luxe line). The way to look at it is, you’re not just getting the bed to sleep in, but also food and entertainment. Whether you’ve always loved or hated cruising in the past — now is the time to appreciate how low cruise prices are.

If you can pack your bags at the last-minute you’ll find cruises as low as $25-$60 per day, pre-tax.

CruiseOne/Cruises Inc is reporting 40 cruises under $40 per day. I thought I’d test this amazing deal for myself as well as have a look around at the market and see if anyone else was giving away their cruise trips at this low rate. Here’s what I found (but prices could change by the time you get there):

Cruises by Length:

> 19-Nt Voyage to South America - San Francisco to Santiago, on Norwegian Sun departing Nov. 4, 2008. Cost: $21/per day for an inside cabin, per person based on double occupancy, pre-tax. The total cost for two people was $1,165 after taxes, or $30.65/day. [CruiseOne]

> 7-Night Eastern Caribbean, Miami R/T, on Norwegian Dawn departing Nov. 15, 2008. Cost: $21 per day for an inside cabin, per person based on double occupancy, pre-tax. The total cost for two people was $922 after taxes, or $66/day. (Taxes and fees were $162 per person). [CruiseOne]

> 4-Night Bahamas, Miami R/T, on Norwegian Sky departing Nov. 10, 2008. Cost: $25 per day for an inside cabin, per person based on double occupancy, pre-tax. The total cost for two people was $425 after taxes, or $53/day. [Southwest]


> 7 Night Western Caribbean Cruise, Miami R/T, on Norwegian Pearl departing Nov. 16, 2008. Cost: $33 per day for an inside cabin, per person based on double occupancy, pre-tax. The total cost for two people was $828 after taxes, or $59/day. [Southwest]


> 32-day South American Cruise, San Francisco to Rio de Janeiro, Brazil, on Princess’ Star Princess departing Nov. 20, 2008. Cost: $43 per day for an inside cabin, per person based on double occupancy, pre-tax. [Vacations To Go 90-day Ticker]

> 7-Night Mexican Riviera Cruise – Los Angeles R/T, on Vision of Royal Caribbean’s Vision of the Seas departing Dec. 1, 2008. Cost: Starting at $54 per person, double occupancy, pre-tax. [Cruise Critic]

> 8-Day Mexican Riviera, San Diego R/T, on Carnival departing Nov. 12, 2008. Cost: $50 per day for an inside cabin, per person based on double occupancy, pre-tax. The total cost for two people was $1,091 after taxes, or $68 per day. [Carnival]

Caveat: Note that not all of the deals above have the final price. In some cases I would’ve had to call in to get the final price.

Tip: Los Angeles Times Travel editor Catharine Hamm recommends booking a cruise through an agent. Read: A travel agent can help you find the best cruise and the best deal

The beginning of the end for cruise fuel surcharges?

The dreaded “s” word – surcharges – is back in the news, but this time cruisers have reason to be cheerful. On the face of it, at least.

With the price of oil now down to little more than US$60 a barrel – that’s half the price it was in July – cruise lines have taken their first steps to get rid of fuel surcharges.

US giant Carnival is being credited with having started the ball rolling, but it appears that the plaudits should actually go to Voyages of Discovery.

Vilified for having the highest fuel surcharge in the industry at a whopping £19 a day, I discovered this week that it quietly dropped them in the summer with immediate effect. Bookings now and for 2009 are guaranteed to be surcharge-free.

Sister company Swan Hellenic removed its surcharges last month, with a no-supplement guarantee in force until March 31, 2009.

Italian line MSC Cruises also has an early Christmas present for cruisers – as of November, the fuel surcharge has been dropped on all future bookings.

Unfortunately, if you were hoping to get something in this year’s Christmas stockings from any other cruise lines, you’ll be disappointed.

US cruising giant Carnival, which owns Cunard, Princess Cruises, P&O Cruises and Ocean Village, among other brands, is axing fuel surcharges on bookings made after October 31 2008 – but only for cruises in 2010.

Royal Caribbean Cruise Lines is also dropping fuel surcharges, this time on bookings made after November 10 this year, but likewise only for cruises taken on or after January 2010. The change affects Royal Caribbean International, Celebrity Cruises and Azamara Cruises, which are all owned by RCCL.

There is also a ray of hope to those who have booked a 2009 cruise on either a Carnival or RCCL ship, or who plan to book one for next year.

Both lines have drawn up guidelines whereby fuel supplements charged on 2009 bookings will be refunded if the oil price stays low. They are complicated so you’ll have to trust the lines to do the maths, but it is all to do with the price of oil staying at or below US$70 (Carnival) or US$65 (Royal Caribbean) for a certain number of days before your cruise.

Rather than cash, refunds will be made in the form of on-board credit, which I’ve no doubt will elicit complaints – in this economic climate it is nice to have some unexpected cash come your way – but it’s not such a bad thing. The credit will pay off the crew’s gratuities and could cover some of your bar bill. Either way, you are only spending money you didn’t expect to have anyway.

I admit to being pleasantly surprised that so many lines have dropped, or started to drop, their fuel surcharges, but it’s a shame that the domino effect that worked so well when the lines were putting up their surcharges is less effective when it comes to getting rid of the charge.

Fred Olsen Cruises Lines, a big favourite with older British cruisers, is still collecting £6 per person per night, or £84 over a two-week cruise. Norwegian Cruise Line continues to levy US$11 (£7.28) per person per night, and there are levies of US$8 (£5.30) on Disney Cruise Line and £3.50 on Star Clippers.

Any cause for cheer has also been knocked sideways with news that this Friday, at the same time as dropping fuel surcharges across its brands, Carnival is increasing cruise prices for, yes, you’ve guessed it, its 2010 sailings – the ones that should have benefited from an end to the fuel surcharge.

The cruise line has not said what those increases will be – and of course there is the bigger question of whether they will actually stick in the present economic climate – but I suspect what they are really doing is building the surcharge into the cost of the cruise, so it is presented as one price.

The timing of the announcement was not great, given that it was at the same time as telling the world that it was dropping fuel surcharges, but it’s a smart move.

The “s” word causes angst and upset, not so much because of the money – let’s face it, another £60 or so is not going to break the bank if you are already paying £1,500 for a cruise – but because it is shown as a separate charge. It’s like VAT, and no one likes to pay that.

Tuesday, October 14, 2008

A Silver Lining for Vacationers in the Caribbean

A Silver Lining for Vacationers in the CaribbeanIf the financial crisis has made you think twice about spending money on a vacation, hotels in the Caribbean are trying to sway you with discounts and deals.

Even before the latest economic news, the Caribbean's tourist industry was under pressure. Flights to the area have been cut and airfare prices have risen. An active hurricane season -- particularly devastation from Hurricane Ike -- has already spooked some potential travelers and damped demand. Indeed, bookings at many hotels began to drop over the summer. And hotel construction in the area is booming, meaning there are more rooms to fill. So, while the fall off-season has usually meant some hotel discounting, this year the offers are particularly sweet.

The Hyatt Regency Aruba Resort & Casino, for example, is offering a fifth night free, a room upgrade, and free breakfast for two every day on stays before Dec. 18. For the first time during the off-season, the Turks & Caicos Club, a small luxury resort on Providenciales island, is offering rates starting at $247.50 until Nov. 9, a 50% discount from rates at the same times last year. "We wanted to encourage people to come to the island not only because of the hurricane," (Hurricane Ike struck nearby) says spokeswoman Tiffany Dowd, "but because of the economy." Ms. Dowd says the property did not sustain significant damage during Ike.

To be sure, the travel industry overall may be in for tough times ahead: Hotels in other regions of the world have recently started to see revenue fall. But on a broad level, room rates are still rising -- as they have for several years. That isn't the case in the Caribbean. The region is the only geographic area in the world that has seen average hotel-room rates drop consistently over the past few months. In August, the average rate for a room in the Caribbean was 8.2% lower than last year, according to Smith Travel Research, a hospitality-research firm.

Online travel agencies such as Travelocity and Orbitz say they are also seeing big discounts. "We have crazy hotel promotions going on now in the Caribbean," says Brian Hoyt, an Orbitz spokesman. For example, average daily room rates for Puerto Rico during October through December are down about 11% for hotels on the site, compared with the same period last year. Average rates in Punta Cana, Dominican Republic, are down 16%.

In addition to dropping rates, hotels are offering added perks like free meals, resort credits and airfare reimbursement to keep travelers coming before the typically busy winter holiday season.

Sandals Resorts has extended a promotion, first offered earlier this summer, which gives guests an airfare credit of up to $550 when they book a three-night stay by Oct. 23 for travel through Dec. 20. The all-inclusive resort, which caters to couples, is also offering additional perks like spa credits this year, says Mitchell Nover, media coordinator at Unique Vacations, which handles sales and marketing for Sandals Resorts.

Hotels are hoping that their deals will offset the pain of higher airfares for travelers. For years, the Caribbean has been able to depend upon a wealth of good, cheap flights. But airlines have been cutting their schedules in the region. About 15% fewer flights are expected into the region from the U.S. this December compared with last December, according to OAG Back Aviation Solutions. And prices for the flights that are left are rising. Online travel agency Travelocity says that airfare into the Caribbean from the U.S. is up about 10% this fall and winter compared with last year.

In Cancun, Mexico, which isn't as affected by airline-route cuts but is often considered part of the Caribbean tourism region because it is competing to attract similar travelers, some room rates are also falling.

"It's been a tough second half, no doubt about it," says Chris Calabrese, director general for the plush JW Marriott Cancun Resort & Spa and its slightly less-expensive sister property, CasaMagna Marriott Cancun. When the hotels noticed weakening demand earlier this year, they dropped some rates and created packages they hoped would attract guests. Until Dec. 15, CasaMagna Marriott is offering a $109 base rate, and the JW Marriott Cancun's base rate is $130. Mr. Calabrese says those rates are 20% cheaper than last year at the same time.

Most hotels say that bookings still look strong for the busy winter holiday season, but that they aren't as booked up as usual at this time. So some are offering winter deals, too. Travelocity is offering an average room rate of $300 per night (from Dec. 15 through Jan. 15) at The Somerset on Grace Bay, a 46% discount compared with what the modern luxury resort in the Turks and Caicos offered last year. At Las Casitas Village & Golden Door Spa in Puerto Rico, owned by LXR Luxury Resorts & Hotels, the site's average rate during the winter period is $527, a 43% discount from last year.

Some hotels are on the lookout for weakened demand from recent negative financial news even into late winter and spring and are offering pre-emptive deals.

Grace Bay Club, owned by Grace Bay Resorts, a luxury property in the Turks and Caicos, hasn't yet seen business weaken, says Nikheel Advani, chief operating officer and principal of Grace Bay Resorts. But last month the hotel started offering a series of deals -- a fourth night free through Dec. 16, a $500 resort credit for stays of three nights or longer and a fifth night free, Jan. 4 through Feb. 12. In addition, children under 12 eat free until Dec. 20. "Just watching news, seeing Wall Street, and talking to guests," it's clear travelers will respond to value, Mr. Advani says.

Ritz-Carltons in the Caribbean and Mexico have an attentive eye on bookings over the coming months. "The unknown is how leisure travel will be impacted by what is happening to the economy," over the last few weeks, says Ezzat Coutry, senior vice president of The Ritz-Carlton Hotel Company.

By: Sarah Nassauer
Wall Street Journal; October 8, 2008

Wednesday, October 8, 2008

Cruise Tourism to Increase During Winter Season

Aboard the P&O vessel Arcadia.After what was deemed a very slow summer season, the winter season is expected to pick up for stakeholders in the cruise business with over seven new ships calling on the port.

The first of the winter cruise vacations arrived in Antigua yesterday, the transatlantic voyage from the UK Cruise Line, P&O, with its vessel Arcadia.

President of the Antigua and Barbuda Cruise Tourism Association (ABCTA) Nathan Dundas said P&O will be making approximately 25 calls and it is expected that Antigua will receive calls from two other UK lines, Fred Olsen & Saga Cruises.

“If the bookings hold as we have received them and we are not hindered by any weather conditions we can still expect to have a good winter season,” Dundas told the Antigua Sun.

It is expected that the main American cruise lines Carnival Cruise Corporation and Royal Caribbean Cruise Lines will maintain their calls to Antigua and Barbuda throughout the winter season.

According to Dundas, Antigua and Barbuda expects to receive at least seven new discount cruises calling in St. John’s for the first time with the most anticipated one being the Carnival Victory from Carnival Cruise Lines.

“The Carnival Victory is the cruise ship that will be replacing the Carnival Destiny that used to make weekly calls all year-round to Antigua,” he stated.

Carnival Victory’s first call will be on 7 Nov.

Antigua is said to be one of the destinations that is doing well in the winter season even though the island is at the same declining position as the rest of the Caribbean during the summer months.

“Cruise stakeholders will be looking forward to a good season as the summer was very slow for the past month having only one cruise- ship, the Adventure of the Seas making fortnightly calls to Antigua,” Dundas added.

The first new ship making its inaugural call to Antigua will be the French cruise ship Amadea from the V Ships Cruise Line on 27 Oct.

The cruise sector still expects to reach its target of over 620,000 passengers for the 2008/2009 season.

By: Afeefah Beharry
Antigua Sun; October 6, 2008