August

State of the Industry:

Anyone who reads the financial section will surely have noted the recent good news from Royal Caribbean Intl. (RCI). Even with their pricing being substantially higher than the other major cruise lines, RCI manages to continue to raise prices to a level that makes their products look expensive against their competitors.

Overall cruise pricing continues "very strong," according to Jack Williams, president and coo of Royal Caribbean International/Celebrity Cruises. "We’re seeing solid demand across all our products," he told analysts during Friday's earnings call.

Williams singled out Europe as "an unbelievable story for us in 2004," with booked load factors above last year and pricing "well, well above." Europe represents 8% of the company’s overall capacity.

Which considering the problems and pricing of air to Europe, not to mention the high dollar cost of Europe when one factors in the exchange rate it is quite amazing.

"Alaska, too, has been a strong performer, with booked load factors and pricing surpassing 2003 levels. Alaska comprises 7% of the company’s capacity".

Alaska has been a "hot" performer for everybody this year, there has been a lot of inventory to choose from but everyone seems to have been successful.

The core seven-day Caribbean market (41% of capacity) is performing well, and short Caribbean cruises (12% of capacity) are chalking up a load factors "well ahead of last year" with higher rates.

The only market that isn’t outpacing 2003 is longer Caribbean itineraries (more than seven days), where booked loads are slightly down, Williams said. Yields for this market, 7% of capacity, are currently expected to be flat.

Worldwide has been pressing our cruise partners to put some newer inventory in the shorter Caribbean market (3/4 & 5 day) sector as well as have a decent ship operating summer itineraries from south Florida but at least there is some inventory as Celebrity Cruises intend to keep the - Century - turning around out of Fort Lauderdale again next summer.

As Worldwide pointed out sometime back, the time to buy was then... prices will only continue to rise. With a fully refundable deposit over one year out and a solid cancellation and attrition policy, it is still possible to lock in space for a program at a competitive rate without any serious downside.

Editorial:

Carnival Corp. recently announced that Cunard's office will move to the California HQ of Princess Cruises. The move, rumors of which have been doing the rounds for quite some time, had been largely anticipated by the staff and others close to Cunard, in view of the merger of their UK operations it seemed only a question of time before the the same scenario would happen here in the US.

Carnival Corp have always benefited from the leverage of the scale of their operation, purchasing being an obvious case, however, there are many less obvious issues that also benefit from Carnival's size, market segment and corporate structure. Whilst Carnival has been very shrewd in leaving the brands it purchased over the years to remain largely autonomous, keeping their own brand image, never the less they are still under the surface benefiting from Carnival market strength.

Seabourn, which has reemerged as a powerful player in the small luxury ship market, was also riding on the back of Cunard in Miami and While there will be some shuffling of operational people and changes in others responsibilities, it is good to see that Debbie Nathonsohn is going to be heading up the Seabourn operation. Debbie has a wealth of experience in this type of business (she moved from Orient Lines where she made their one ship operation a huge success). Cunard is not the only brand doubling up with a bigger sister line, it is easy to forget that Holland America's offices are also home to Windstar and it here that Rick Meadows is heading. He will keep his title of Senior VP of Sales & Marketing but move from Seabourn to Holland America Line, in a way returning home, as he had previously been VP of Marketing for Windstar.

Trade Shows: Worldwide will once again be exhibiting at the CMITS show in Toronto. Steve Bloss, Leon and Jim Castle will be at the show and looking forward to catching up with colleagues and old friends. Also to be found on our booth is our new Crystal Cruises rep. Doug Reinmuth who is looking forward to telling you all about their delightful products. Please drop by and say hi - we are located at Booth #1839.

Ship Report:

Pride of Aloha: Jim Huff experiences the "new" Pride of Aloha.

Ship News

Med. Shipping & cruises (MSC) have purchased a second of the defunct Festival Cruises Lines ships - the European Star - for a sum reported to be in the region of $270m. The ship (sister ship to the m/v Vision) will be renamed the - Armonia - and will commence cruising in the Mediterranean in March 2005.
As reported in our last issue, NCL have instituted a US$ 10.00 per person non-refundable daily service charge. The fee which is similar to a "resort fee" is already being charged on NCL America's ship in Hawaii, but is currently optional elsewhere, it will however, will become fleetwide by next summer.
Holland America's Fleet are going wireless, with "hot spots" available at various locations around the ship where passengers can access internet service via a laptop. Not to forget of course that the link still goes via satellite and one has to purchase call time. The currently offered public access through the internet cafe's will remain unchanged.
NCL's parent company "Star Cruises" have created a new corporation which will be the home to all of NCL's north American operation. NCL Corp as it is to be known will have all of Star's North American base brands; Norwegian Cruise Line, Orient Line and NCL America in its portfolio. NCL Corp was structured to have a solid, independent balance sheet to be able to negotiate its own funds for future growth and other corporate purposes. As part of the deal, Star completed a US$1.5b refinancing deal that will be used to refinance NCL's existing debt and also to fund the company's fleet renewal program which is a key part of their plan for future growth and profitability in the coming years. NCl has stated that it plans to add one or two new ships a year and redeploy its midsize ships to the Asia/Pacific region.

New builds and other news;

As we reported earlier in this issue, RCI is having a very healthy period and as such is looking for a quick way to increase cabin availability. They have in mind to lengthen several of their ship depending on age, model and cruising area. Richard Fain, RCI's chairman and CEO was reported as saying that "Royal Caribbean Cruises Ltd. is likely to lengthen and upgrade further ships beyond the Enchantment of the Seas". "I think there will be more lengthening and upgrades, but I don’t think that we’re on a mission to do a lot more lengthening,’ Fain said. ‘We’ll look at this on a case by case basis in a measured way.’

As reported, Royal Caribbean has contracted Kvaerner Masa-Yards to add a midsection to the 1997-built Enchantment of the Seas that will boost cabin count by 151. ‘I think it’s fair to characterize that as part of a program to improve our vessels,’ Fain said. However, he noted that decisions on further possible lengthening depend on a variety of factors, including the ship class.

The Enchantment stretch will take place between mid-May and early July next year during a drydocking at Keppel Verolme Shipyard in Rotterdam. KMY put the cost at €40-45m. Fain said the capital cost per berth will work out to a bit below what the company would expect to pay for a newbuild, or around $200,000. On top of that, of course, are additional costs including lost revenue from time out of service. ‘But we do expect the lengthening will give us excellent return on investment,’ Fain is reported to have said.

Port News:

St. Thomas (USVI) has opened a French Heritage Museum. The building is located in French Town and will chronicle the years of French Culture associated with the Island.
Puerto Rico; The PR Port Authority has increased passenger cruise fees from $10.30 to $13.25 per passenger. Fearing a backlash from cruise ship operators the PR Tourism Company is working with the Florida Caribbean Cruise Association and the cruise lines to develop incentive plans keep the port competitive. Last year PR received more than 1.2m cruise passengers, up 2% from 2002.
Beirut; Silversea Cruises are planning on the Silver Wind calling on Beirut on its May 11, 2005 - "Monuments & Empires" sailing. The Silver Shadow will call on October 30, 2005 on its "Echoes of Ancient Civilizations" cruise.
Dili; Democratic Republic of East Timor is set to become the world's newest cruise destination with the arrival of the 4,000gt Orion on June 13 next year. The five-star 106-passenger liner will make six calls at Dili between June and September 2005 on 10-night Darwin/Darwin itineraries which are a highlight of Orion Expedition Cruises inaugural program.
Ft. Lauderdale; This coming winter Caribbean season will see a steady increase in the number of cruise ship using the port both as a turn around and as a home-port. Royal Caribbean International’s "Jewel of the Seas" and Holland America Line’s "Westerdam" as well as new comer MSC Cruises will have their new ship the "MSC Opera" in port. (MSC has recently negotiated a very favorable deal to move its container traffic from Miami to Ft. Lauderdale). Amongst the first time visitors who will be making regular departures from the port are, Princess Cruises "Star Princess" and Costa's "Costa Allegra", additionally the port will host first visits by the "Carnival Miracle", the "Pacific Princess and Hapag-Lloyd’s "Europa". Nearly 50 ships from 20 cruise lines call at Port Everglades.

Other News:

The river ship - Cezanne - an old friend of Worldwide's, we represented the ship for several years after its construction up to the time its was sold to Peter Deilmann, is being move from its current cruising area on the river Rhone to start on March 26, 2005 a weekly cruise schedule on the river Seine between Paris and Rouen. Two itineraries are offered, round trip Paris and Paris to Rouen. The Cezanne is a 5 star river ship and will be the largest operating on the Seine, she has 50 spacious and beautifully decorated staterooms in twin and queen configuration with those on the upper deck having large picture windows and those on the lower having oversize double portholes. The itineraries feature overnighting in Paris and Rouen with side trips to Versailles, Honfleur and Giverney.

Worldwide has had a flurry of charters with both SeaDream and Holland America in recent months with 26 days of charter being signed on Seadream just this month. Unfortunately, these charters did not originate through our usual channels being business out of Europe and from a specialty tour operator. I wish we could say that the corporate travel sector was moving as quickly as the FIT market but it is not the case.

Opt-in

Another issue we are concerned about are the new rules covering such things as unsolicited emails and faxes. Whilst we are making every effort to comply with the new rules as they appear, it is never the less easy to run foul of something one is not aware of. Currently we give our clients the option to "Opt-out" of receiving our news letter but, this is a blanket opt-out which also has the effect of removing your name from our mailing list for such things as complimentary ship cruises (site inspections) and resort inspections as well as other complimentary offers we are able to make to our clients from time to time. We have given this a lot of thought but the difficulty of managing multi-lists to cover everyone's requirement is more than we feel we can manage successfully at this time.

With this in mind, we have decided to make a start on "Opting - in" ... we realize that not everyone reads every issue of our newsletter so many people might miss this announcement (we always receive a good number of "out-of-office reminders" back from our clients - so we know you're all hard working folk... ). So starting with the May issue and running through the summer we will add this note to the bottom of our newsletter and respectfully request that you take just a second or two to complete the "Opt-in" form so you may continue to receive communications from WWTCA.