Cruise Newsletter - March 2005

The latest ship Reports; 

• Wind Surf

• Zaandam

• Opera

Special and Great Value Charter Opportunities:

• Le Diamante (ex-Song of Flower) - April 16-23, 2005 from Nice to Nice (France) - $385.000,00

• Seabourn Pride  - Nov. 13-20, 2005 - Ft. Lauderdale - Barbados - $448.000,00

Editorial

For months we have been mentioning this - It has been obvious as indicated from all of our resources, including the stock tracking organizations; we have been telling you to watch out for cruise pricing moving upwards for months. The first few months of 2005 have certainly prove our predication to be correct. Industry insiders are suggesting that yields will increase between 10% to 15% for the balance of the year.

Why the sudden increase in pricing? Certainly the cold winter has help make this "wave" season for retail passengers the busiest in years Most importantly however is that the fact that demand is out pacing supply.  The number of new ships coming into the market has decreased dramatically and will stay down for the foreseeable future. What's even better news for the cruise industry in general, is that more and more people are finally taking their first cruises and many of them are coming back again and again. Without a doubt cruising has a very high perceived value as well as being a very easy vacation for the typically stressed passenger in today's hectic world.

Of particular note are advance bookings for 2006 in both Alaska and Europe. From our first hand experience in the luxury sector availability for charters in both the Med and Baltic are decreasing at record speed. If you are thinking about either groups or charters on 5 Star ships you need to be booking space now or very shortly you find disappointing news. New for 2006 in the Med will be Royal Caribbean's Mega Ship - Explorer of the Sea - offering 7 night cruises from Barcelona.

With the current Dollar to Euro exchange rate many people are seeing cruises and river ships as a real bargain which is further increasing the demand in Europe for cruises in general. As mentioned before the ability to pay in Dollars for on board expenses, bar bills, wines, tours etc makes a lot of sense can really increase your savings. Who is booking these luxury European 5 Star cruises? In many cases it’s the top decision makers that we all deal with booking their family vacation and enjoying the experience. It's not surprising more and more groups are asking for a cruise.

Cruising is still a bargain when compared to hotels and resorts. The days of 2 for 1 deals and free air are gone entirely. Even the cut throat pricing by internet cruise sellers is being brought under control via new policies from the cruise lines.

All of these factors should be good news for all of us. You can honestly tell your clients if they wait late to make a decision as many of them have done over the past few years, more than likely you won't find the space for them and if you do it's going to cost you more. We see this daily. As the cruise industry increases their yields they are also increasing yours. Let's face it selling a $300.00 three night cruise is not a get rich scheme. On the other selling a 5 star luxury cruise is one of the best ways to hook a client into thinking about multi year contracts because the participants reactions are off the charts in post trip surveys.

Important Items Of Note:

Several interesting events have taken place recently which our clients should be aware of as they could adversely impact your cruise programs....

Holland America who have traditionally always been tough on their cancellation policies are toughening up their group policy even further - they state the following:

"If there are unsold staterooms in a group allotment that are being remarketed, we will use all available remedies to stop the misuse of our group program."  "We are concerned about the improper remarketing of unsold group allotments of Holland America staterooms, in violation of the terms and conditions applicable to group rates...you are prohibited from advertising such unsold group space pricing in newspapers, on radio, on television, and on the Internet."

Their concern stem from companies trying to resell space they have blocked at a reduced rate on the open market, thereby effectively depreciating the value of the unsold inventory on which ever sailing is affected.  It beholds us all to keep a close watch on attrition related to programs, be aware of drop dead dates and ensure that unsold blocked space is returned to the cruise line before penalties cut in if possible. Should the unwanted staterooms already be under penalty they must still be returned to inventory to avoid penalties mounting.  Worldwide does track the drop dead dates on program which we are working for our clients and will notify you in advance to enable you to review your stateroom allotment and possible penalty situations.

Industry News:

Industry bookings continue very strong two months into wave season with solid year-over-year comparisons, according to A. G. Edwards’ early March booking and pricing survey. Booking curves continue to lengthen, approximating 150-180 days.  Demand continues to push up pricing, with the surveyed brands. Carnival Cruise Lines, Royal Caribbean International and Celebrity Cruises, generally posting their highest per diems over the last four weeks for sailings from the first through third quarters. With occupancy rates close to maximization, ticket pricing and on-board spending are driving revenue growth.  Estimates have CCL’s ’05 per diems within $0-$6 of the peaks seen in 1999-2000 (mostly due to the acquisitions of Costa and some brands from the P&O Princess Cruises) and RCL’s ’05 per diems approximately $10-$15 below 1999 levels. Clearly, relative to history and more importantly as a value relative to comparable land based itineraries, there remains room to raise prices for both companies,’ noted AGE analyst Tim Conder.  A. G. Edwards reaffirmed its 2005 and ’06 earnings per share estimates of $2.78 and $3.26 for CCL and reduced its ’05 EPS estimate for RCL from $2.95 to $2.84 and for ’06 from $3.45 to $3.43, citing positive pricing implications based on the survey, balanced by upwardly adjusted net cruise costs due to the recent sharp spike in fuel pricing. The estimates for both companies could prove conservative in both revenues and cost assumptions if existing trends in cruise pricing hold and fuel costs abate. A. G. Edwards held its 12- to 18-month price objectives of $65 for CCL and $60 for RCL and reiterated its Buy ratings on both stocks.
 

As we are preparing this newsletter, news has come in from Radisson Seven Seas Cruises of major lay off in their organization.  Nineteen members of the RSSC team have been let go, many of them being long term employees including a number of senior executives. Radisson Seven Seas Cruises President Mark Conroy is reported as saying: "This was tough for RSSC; many of the people affected have been with us since the start of the company." "It probably had even a greater impact since even after the dark days following 9/11, no one was let go." "Radisson is having a great year and, assuming nothing terrible happens will be profitable. "However as good stewards of our owner's assets, we had to react to the fact that the Diamond, which represented 14% of our capacity and about 20% of the guests we carried due to her shorter cruises in the Caribbean, was leaving the fleet."

SeaTrade, Miami opened its doors to the cruise industry this Monday, running through Thursday the show is the premier showcase for the industry and all the major players will be in attendance.  Allied to the show this year and an active part of the proceeding is the SuperYacht Symposium which is the Yachting Industries annual outlet for ideas and a must for anyone in this segment of the shipping industry. 
 

Ship News

• Norwegian Cruise Line are considering scrapping the SS Norway.  Having already spent around $10m on simply keeping the vessel tied up they are considering cutting their losses and realizing whatever scrap value the old girl would make them.

• Royal Caribbean announced that they are signing a letter of intent to add a third Freedom-class ship, with delivery in early 2008. The deal would give RCI one Freedom-class ship per year for 2006, 2007, and 2008. The cost of the ship, with 1,800 cabins accommodating 3,600 guests double would be in the region of $828 million, compared to $750 million for the first Freedom ship, the difference is due to the adverse exchange rate.  Royal Caribbean have been hugely successful with the Freedom-class ships, they have managed to stave of their main competition - Carnival - by offering some unique and attractive on-board options such as the ice rink, rock wall climbing etc.  The ships are attractive and work well,  the new version will have larger staterooms as well as three hallways on some of the deck. Royal Caribbean who have always aggressively pursued corporate programs will be offering bigger and better conference facilities in their effort to attract more of the corporate business.

• NCL has started a major advertising blitz to pre-introduce their first custom build Hawaiian ship - the Pride of America, this ship is going to be the first brand new US flagged cruise ship in 50 years, she will debut in Hawaii in June 2005. You are either going to love it or hate it as NCL bill the ship as "a piece of true Americana, with every inch of decor dedicated to the places America loves".  See the Hawaiian Islands and tour America all at the same time - it is a unique concept.  I am sure NCL will have done a tasteful job with their theme-ing of the ship and besides, can it really be any worse than some of the early Carnival Ship's decor?

• Celebrity Cruises recently announced that the 2006 deployment of the m/v Summit to Asia and the Pacific. Offering cruises in Australia, China, Hong Kong, Japan, New Zealand, Singapore, South Korea and other destinations.

• Oceana Cruises recently announced that due to the incredible response from the public to their product they are experiencing booking that are off-the charts which was the reason for the addition of a larges reg. staff at the end of 2004, now they intend to move to larger offices in Miami later this year and are also shuffling some of their executive posts to cope with the additional business. They say that Europe for 2005 is almost 80% sold out and the total year is some 70% sold out which is almost double the percentage of last year.  Added to that yields are up 15% over the year.
  Shipping News

• Princess Cruises announces New York Program; Princess will offer Caribbean cruises from New York City for the first time next summer with the debut of the new 116,000-ton Crown Princess. The nine-day roundtrips to both the Eastern and Western Caribbean, will depart starting June 14 through Oct. 18, 2006. The new program also marks Princess’ return to Bermuda for the first time since 2002. The Eastern Caribbean itinerary, offered 10 times, includes calls at Bermuda (West End, San Juan, St. Thomas and a new port for the line, Grand Turk in the Turks and Caicos. The Western Caribbean itinerary, scheduled for five departures, features stops at Port Canaveral, Grand Cayman, Ocho Rios and Grand Turk. In Grand Turk, Princess will call at the island’s new cruise terminal and welcome center, which will offer a variety of services and attractions including a recreational area with a private beach and pool. The Crown Princess will introduce a number of new features for the line, including a piazza-style atrium, new casual dining venues such as an International Café serving baked goods and a wine and seafood bar. The signature Trattoria Sabatini will have a new piano lounge area while the Wheelhouse Bar will serve pub fare. A new Steak and Seafood restaurant will have an open, theater-style kitchen. The Crown will also have the massive outdoor movie screen, a two-story Lotus Spa with fitness center, an extensive children and teens’ center and a wedding chapel. Crown Princess cruises open for reservations this April 1.

• Crystal Offers Extreme Alaska Excursions;  Crystal Cruises has lined up new “extreme excursions” for summer cruises in Europe, including a ride on a MiG fighter over Moscow, a journey to the Arctic Circle to Lapland, and a high-speed sailing adventure in a professional ocean racer. “Whether soaring high in a fighter jet, a helicopter or a hot-air balloon, or diving the ancient Roman underwater ruins of Baia, our extreme excursions allow guests to view the fascinating architectural and geological wonders of Europe from a remarkable perspective available only to a privileged few,” said John Stoll, Crystal’s director of land programs. “For the true adventurer, access to exclusive experiences doesn’t come with a price tag.” With a minimum price of $500 for the underwater dive to Baia to a maximum of $13,500 for a MiG flight, participation in these excursions is extremely limited and most must be pre-reserved.

• On the same subject -  Celebrity Cruises are going to extend their XPedition program which offers Celebrity cruisers a one-of-a-kind experience in exotic destinations.  Celebrity announced that the program on their small ship cruising the Galapagos Islands had been a rousing success so the company has come up with a series of expeditions throughout the Celebrity cruising grounds.  These are once in a lifetime shore excursions which are available on the various itineraries sailed by Celebrity, experiences worth of :"Fantasy Island" or the "James Bond" movies - Celebrity planners have reached for the essence of the destinations mystique. Prices for the Xperience will range from $650 to $2500 per person.

• Holland America's ms Zaandam began its winter Caribbean sailings featuring the full-breadth of the company’s $225 million Signature of Excellence initiative. Holland America’s Signature of Excellence initiative is designed to redefine premium cruising and raise the bar for the industry. The goal is to provide our guests with a cruising experience that will exceed their every expectation. These enhancements range from new state-of-the-art facilities in the ship’s public spaces to luxurious amenities in every stateroom. Highlights include the innovative new Culinary Arts Center, the new Explorations Café – powered by The New York Times, expanded Greenhouse Spa facilities and upgraded youth facilities. In addition, the ms Prinsendam recently completed its Signature of Excellence additions, adding the Culinary Arts Center, flat panel TVs and more. Since the Prinsendam sails longer voyages around the globe and attracts a mature audience, it will not receive expanded youth facilities. Due to space, the 793-guest ship also will not have the Explorations Café.  Last October, the ms Ryndam became the first ship to acquire all of the Signature of Excellence product and service enhancements. Holland America Line is continuing to add Signature of Excellence enhancements to six more ships this year and the remainder of the ships will be completed in fall 2006.

• Cruise West Introduces Japan Voyages; Cruise West will offer 12 cruises next year to Japan, a new destination for the small-ship cruise line. The 13- and 16-night Japan itineraries are offered from March through October 2006 on the line’s all-suite flagship, the 114-passenger Spirit of Oceanus. The early cruises will coincide with cherry blossom time while the fall departure will visit during the time of falling maple leaves. “We will take guests behind the cultural curtain to the insider’s Japan --- the coastal ports and feudal castle towns that shaped this island nation,” said Richard D. West, Cruise West chairman and CEO. Among the places to be visited are Kobe, for tours of the white Himeji Castle and the Zen-inspired Korakeun Garden; Miyajima, to visit an important Shinto shrine; Hiroshima, for the Peace Memorial Park, Atomic Bomb Dome and the Jigoku hot spring; Kyongju, for the ruins of the Korean Shilla dynasty; and Kanazawa, for two more famous gardens. The high-speed bullet trains then take passengers to Tokyo. The 16-night itinerary also includes Kyoto and Nara.

Interesting news and statistics

• CLIA in its 30th anniversary year announced that by the end of the year 2005 68 new cruise ships will have been introduced to the market since the year 2000. That relates to an average of over 1 for every month. In 2005 only 3 new ships will be introduced - NCL's 2100 passenger - Pride of America,  NCL's 2400 passenger - Norwegian Jewel and Carnivals' 2974 passenger - Liberty.  Besides these new ships there are also 3 ships being re-introduced to the market, MSC's 1566 passenger - Sinfonia (previously the European Star), Princess Cruises 1950 passenger - Sea Princess (previously the Adonia) and Oceana Cruises 684 passenger - Nautica (previously Renaissance's R5).

• At a media lunch at Sydney’s Four Seasons Hotel, SeaDream Yacht Club president and ceo Larry Pimentel told journalists that Australia will account for five per cent of the company’s worldwide bookings this year and is the number one growth market in the world. Pimentel, who will speak at Cruiseco 2005 in Canberra tomorrow, said he expects Australia to represent 10% of SeaDream’s bookings in 2006. He said Australians are already the biggest buyers of back-to-back segments and that two charters for 2006 have been sold to Australian clients.  He denied persistent industry rumors that SeaDream is negotiating to take control of the Australian-built 74-passenger ships Tu Moana and Tia Moana from Bora Bora Cruises. However, he said if SeaDream could find a perfect fit to its fleet of two super-luxurious yacht-style cruise ships, it would position the vessel in the South Pacific.  Pimental is slated to speak at the SuperYacht Symposium at SeaTrade, Miami this week.

Port news

• Caribbean Ports; With the main stream cruise lines moving their summer schedule out of the Caribbean to Europe and Alaska, many of the Caribbean Islands have seen the number of ships sailing in the region in the summer months decline significantly over the past four years. Most recently this change of deployment strategy by the cruise industry has seen the Grand Princess and the Century of the Seas amongst others mega ships redeploy out of the region. As a result some Islands have been left with no ships calling in the summer months and others with only one or two calls per week.  Antigua and Barbuda’s tourism Council recently put forward the proposal that the twin islands can be reached from the US mainland in 7, 8 and 10 day itineraries to encourage the cruise lines to offer the islands in their package of itineraries.  Antigua & Barbuda has seen passenger arrivals grown steadily from just over 300,000 in 2002 to in excess of 500,000 in 2004. With its commitment to continue improving its Port infrastructure, developing its onshore attractions and ensuring that St. John’s Harbour continues to offer a safe, friendly and interesting port of call thereby increasing  the number of ship calls.

• For Holland America Line Europe isn’t just another destination, it’s home, this summer their ships will cruise the Baltic from July through September.  Intriguing 10-day “Gems of the Baltic,” 12-day “Treasures of Scandinavia and Russia,” and a 12-day “Vikings & Czars” itinerary showcases the line’s expertise.  Every Baltic cruise provides two days in St. Petersburg for a night at the opera or a day trip to Moscow. Classic luxury aboard the 1,848-passenger Vista-class, ms Westerdam and the elegant 1,316-passenger flagship, ms Rotterdam. (Check the complete itineraries)

• Labadee; Royal Caribbean's exclusive port of call Labadee is a 260-acre wooded peninsula located on the mountainous, secluded north coast of Hispaniola and features five spectacular beaches, nature trails, open-air dining areas, beachside bars, native entertainment and a marketplace complete with fine arts and crafts. Labadee is being transformed into a privateer's paradise. The line has opened a new pirate-themed water playground, sponsored by The Coca-Cola Company, featuring a "sunken" pirate ship and a new mascot, Labadee Luc, who will appear on signage throughout the peninsula. The new Splash Bash is the perfect addition for guests who want to become pirates of the Caribbean for the day. With Labadee's buccaneer past.  The Labadee Luc character and the water park's pirate theme will spark imaginations and add to the enjoyment of the private paradise.

• Barcelona set sights on 1.8m passengers by 2010; The port of Barcelona maintained its position last year as the leading cruise port in Europe. The final tally for 2004 showed a very slight decline in Barcelona's passenger total, to 1.025m, from 1.054m in record-breaking 2003. Barcelona Port Authority, yesterday set itself a target of 10% annual growth in the city's cruise traffic through the year 2010 to a yearly total of 1.8m.  Reflecting the trend to larger vessels, these passenger numbers were achieved despite a decline in the actual number of port calls to 629 vessels in 2004, against 717 a year earlier. Of particular significance was the increase to 55% in turnaround passengers, with 45% in transit, during 2004, compared with a 48/52 per cent split in 2003.  The Port Authority is spending heavily on modernization of existing terminals, with €9.5m invested in Terminal B and €3m for Terminal C. Both designed by Miami-based architects BEA, they will enter service in April this year. A further €7.8m is being invested.  Terminal A will also be improved in two stages, for April 2006 and April 2007, with Port Authority investment of €5m ultimately providing 4,500 sq mtr of space. Targeted for spring 2006 is a complete development of Terminal D, funded by Costa Crociere to a total of €7.8m.  Vital support for the flow of traffic is provided by further construction at Barcelona airport, which has inaugurated a third runway and is constructing a new terminal building.

• Smaller ports and islands along the German North Sea and Baltic coast are becoming increasing popular as cruise destinations. Hapag-Lloyd Cruises and Peter Deilmann Reederei have successfully debuted at destinations like the Islands of Sylt and Borkum or the cities of Flensburg and Sassnitz. New destinations scheduled for upcoming calls include the islands of Amrum and Pellworm. Next year Hapag-Lloyd’s Europa is going to visit the picturesque summer resort of Timmendorfer Strand near Lübeck for the first time. It would appear that as the number of cruise vessels competing in the main Baltic and North Sea destinations continues to grow, operators have been stimulated to look for new niches. North American passengers especially in the upper four- or five-stars-segments should love these places as they are perfectly suited for smaller vessels.

PROGRAM IDEA's

Coming up soon are several sporting events which our clients should be focusing on:

Monaco Grand Prix - this event is held annually in Monte Carlo - call us for ideas, we have already signed several charter contract for this year and 2006.. there is still time to do something.

• 2005 date - May 29

• 2006 date - May 28

2006 Ryder Cup - This event is being held in Ireland at the prestigious Kildare Golf and Country Club, Straffan, Co. Kildare, between Friday 22nd and Sunday 24th September.  We are looking at bring a ship into the port of  Dublin with pre & post cruises planned around the event. Call us if you have any clients interested in a very exclusive golf/cruise program.

Superbowl in Miami 2007

Try to form, just as soon as this years Superbowl was over, our telephones started to ring for Superbowl 2007.  Call us for some ideas, we are happy to chat about options and who and what might be available in Miami.

The America's Cup 2007

Worldwide continues to bring this event to your attention as we feel there is a lot of corporate potential for our clients.

Sweden to field a challenger for the America's Cup

It was recently confirmed that Victory Challenge was the seventh Challenger to be accepted for the 32nd America's Cup, its identity secret for the past month. This will be the fifth time Sweden has challenged for the America's Cup although in some senses, its participation goes much further back – in reality the Swedes have been involved since the very beginning in 1851.  This latest incarnation of Victory Challenge should benefit tremendously from the lessons learned in that last campaign and will also be able to make use of the two boats built for the 2002 effort, SWE-63 (Örn) and SWE-73 (Orm), designed by Mani Frers, for the Louis Vuitton Acts in 2005 and 2006, as well as for a testing and training platform for the campaign. Victory Challenge will make its debut in Valencia at the Louis Vuitton Acts 4 and 5, joining seven other official Challengers along with the Defender, the Swiss Team Alinghi.

Sweden will play host to Louis Vuitton Acts 6 & 7 as the America's Cup comes to Northern Europe;  The America's Cup is coming to Sweden! Malmö, in the Skåne region at the south of Sweden, will be the Northern European location for the Louis Vuitton Acts 6 & 7, with racing beginning on the 25th of August, 2005. The back-to-back events, featuring both Match and Fleet Racing are among 14 opening Acts of the 32nd America's Cup. Malmö, supported by the regional district of Skåne, is a tremendous location for sailing in Northern Europe, as the America's Cup continues holding events across Europe in 2005, before settling in its Host City of Valencia, Spain for 2006 and 2007.

Racing in Trapani, Sicily, will close the 2005 America's Cup season
Trapani, a picturesque city on the western tip of Sicily, Italy will be the venue for the Trapani Louis Vuitton Acts 8 & 9. The back-to-back events, beginning late in September this year and featuring Match and Fleet Racing will conclude the racing season for the America's Cup in 2005. Four other Louis Vuitton Acts this year in Valencia, Spain and Malmö-Skåne, in Sweden, will precede the action in Trapani.  As with other venues used for the 32nd America's Cup, Trapani is able to accommodate the fleet close to the race course, provide reliable sailing conditions, and enable the public to get close to the action, both ashore and afloat. Trapani's race courses have the added attraction of the beautiful Egadi Islands as a stunning backdrop. Trapani has the kind of qualities needed to stage a spectacular event in abundance: the wind and sailing conditions are great, there is plenty of waterfront space integrated right into the city, and with two Italian challengers, local interest in the event is extremely high. The race course area is among the most beautiful maritime settings in the world. I know this is going to be a hugely popular event. The Trapani Louis Vuitton Act 8, a Match Racing regatta begins on the 29th of September, 2005. Act 9, a three-day Fleet Racing event, follows immediately, with racing scheduled to start on the 7th of October, 2005. The 2005 America's Cup Class season champion will be crowned following the two Trapani competitions. With the two Louis Vuitton Acts in Trapani, the America's Cup will have travelled across Northern and Southern Europe to three venues, in addition to its host city in Valencia, Spain in 2004 and 2005.
 

THE AMERICA’S CUP – THE STAGE FOR CREATING LEGENDS as well as a SITE Crystal Award.

Back