Analyst: Cruise trends are weak, but not dropping

[JoeyandDavid]

NEW YORK (AP) -- A survey of December cruise trends showed that bookings and pricing trends remained weak but did not seem to be getting significantly worse, a Susquehanna Financial Group analyst said on Wednesday.

Robert LaFleur maintained "Positive" ratings on both companies. The survey of travel agents was conducted by SFG Research.

"Clearly, the economic and financial crisis that gained critical mass this past fall has consumers more wary of big ticket commitments like cruises, and the lines have had to respond to this by price incentives," the analyst said.

LaFleur noted the economic downturn is prompting cruise companies to rethink some long-standing practices. He cited Royal Caribbean's statement during its fourth-quarter conference call that the company would no longer follow its current strategy of slashing prices to whatever level necessary to fill every cabin.

"(Royal) would rather sail with some empty cabins than drop prices below economically sensible levels," LaFleur said.

On the positive side, LaFleur said lower fuel prices will benefit the companies and early reports are indicating that bookings picked up last month as "wave season" began. The three-month period of January through March is known as "wave season," when cruise bookings usually surge.

"At this point, even a non-disastrous wave season could be seen as a positive catalyst," LaFleur said.

He noted that both Miami-based companies have been slashing costs to cope with weaker revenue, particularly Royal Caribbean. "(Royal) is also trading under a heavy cloud of insolvency risk," LaFleur said. "While it clearly has the more stressed balance sheet, the combination of financing guarantees, current liquidity, and still-meaningful operating cash flows should get them through."

[elfed]

I really would like to know the percentage of people who have been on one cruise but will not take another one. Most ,if not all of us on Cruise Crazies have taken, or will be taking more than one. But what about those folks who disliked the experience. I personally know of two couples who far prefer other types of holiday after they'd taken just one cruise. Their reasons for choosing other vacations was, in part costs.

I have monitored Royal Caribbean's prices compared to other popular lines and their fares are far more expensive ( that's just one of the many reasons we don't travel with RCL.) I think people today are very cost concious when it comes to spending money on a vacation. For example here in Canada one can find a 7 day all inclusive holiday to sunny Cuba for under 700 Canadian dollars including airfare.That's hard to beat when you consider all drinks, food and recreation is included.

So as I've said so many times before, there are far too many ships going to the Caribbean during the Winter months. Cruise lines if they want to fill their ships, will be offering dirt cheap prices for a week's vacation. Just don't expect top notch service from these rock bottom prices.

Regards,

James.

[JoeyandDavid]

So as I've said so many times before, there are far too many ships going to the Caribbean during the Winter months. Cruise lines if they want to fill their ships, will be offering dirt cheap prices for a week's vacation. Just don't expect top notch service from these rock bottom prices.

Regards,

James.

James a very excellent point..

you know it shouldn't be that way .. one should have nothing to do with the other... but it does ..it always does.... or ....is that just peoples justification for accepting poor service?..

The price i pay for my cruise should not influence the crew members performance.... but sometimes it does....and sometimes i re-adjust my tips... thats how the game is played ...IMHO

[rogue]

The price i pay for my cruise should not influence the crew members performance.... but sometimes it does....and sometimes i re-adjust my tips... thats how the game is played ...IMHO

Joey, it isn't the price you pay that will influence the crew members performance, it will be that there are less crew members to give you the service. That in turn will increase the amount of work that the remaining crew members has to do. All of this influences the performance.

[JoeyandDavid]

The price i pay for my cruise should not influence the crew members performance.... but sometimes it does....and sometimes i re-adjust my tips... thats how the game is played ...IMHO

Joey, it isn't the price you pay that will influence the crew members performance, it will be that there are less crew members to give you the service. That in turn will increase the amount of work that the remaining crew members has to do. All of this influences the performance.

so you are saying howard that they in addition to lowering the fares.. they are reduciung staffs as well?

[rogue]

They have to be able to meet the bottom line for they're investors somehow. With less income, they have to decrease their costs also. That means less personnel, decrease in the quality of food. more nickel and diming, etc. The unfortunate thing is that when the economy gets better, and prices go back up, most of the things taken away will probably never come back. It's like we'll never again see free luggage on flights again. But don't be fooled that this is only happening on cruises. The land-based vacation industry is being hurt just as much from the poor economy. Of course, this is all my opinion

[coloradocruisers]

And when things get "better", and fares go back up, will the service and food get better as well?

[JoeyandDavid]

They have to be able to meet the bottom line for they're investors somehow. With less income, they have to decrease their costs also. That means less personnel, decrease in the quality of food. more nickel and diming, etc. The unfortunate thing is that when the economy gets better, and prices go back up, most of the things taken away will probably never come back. It's like we'll never again see free luggage on flights again. But don't be fooled that this is only happening on cruises. The land-based vacation industry is being hurt just as much from the poor economy. Of course, this is all my opinion

interesting observations

[rogue]

It's very difficult to get the toothpaste back into the tube.

[coloradocruisers]

It's very difficult to get the toothpaste back into the tube.

I agree. We must have posted simultaneously.