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 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." 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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