Our monthly Cruise Search reflects change in demand and online market share. U.S. online cruise search is estimated at 7.0 million monthly unique individuals for the month of October. CruiseSearch shrank for the third consecutive month, both versus the prior month and October of last year. All this points to a continued weakening in online cruise search activity as the economic conditions faced by travelers have worsened.
|% Change for October '08|
|vs Last Year||vs. Last Month|
|Total Internet Traffic||4.4%||0.6%|
|Total Cruise Search||-7.5%||-6.0%|
Percentages in the charts below represent the approximate share of all online cruise traffic.
Chart 1 - % of traffic for top Cruise Lines from all cruise related traffic (click to enlarge)
Richard D. Fain: "A little over a month ago we witnessed a historic change in the financial markets and in many of the key drivers of our business. The resulting deterioration in consumer confidence and spending now requires us to confront new realities...
One interesting aspect for us is the need to recalibrate our forecast for a different pattern of consumer behavior. Historically we’ve been very successful in using the pace and type of current bookings to predict future demand. We have enormous volumes of data that allow us to extrapolate future bookings based on how people are buying cruises today and what their price elasticity is. Unfortunately, the current turmoil came suddenly and disrupted our normal patterns.
In addition, the feedback we get from our guests and from our travel agent partners clearly demonstrates that the consumer is as confused about the economic situation."
Brian J. Rice: "As we’ve seen in other analogous situations, during times of sudden change and high uncertainty, our customers hold off making any decisions they can. At the beginning of the month we saw modestly lower booking volumes compared to a year ago but nothing unusual given our strong order book at the time. Bookings began to show additional weakness in mid-September, about the time of the Lehman bankruptcy. Towards the end of the month when Congress was dealing with the bailout package, we began to see a more rapid decline in new demand.
For the last two weeks despite the dramatic volatility in the market, bookings appear to have leveled off and we have actually seen a more consistent pattern."