Page 26: of Maritime Reporter Magazine (June 1992)

CRUISE SHIPPING

Market Potential $80 Billion Over Next 5 Years 12 New Ships Totaling Over 11,000 Berths Added For 1992

Table 2—New Ships For 1992

Line Ship Capacity Delivery

Chandris Cruises Zenith 1,374 4/92

Club Med Club Med II 386 12/92

Costa Cruises Costa Classica 1,300 1/92

Costa Cruises Costa Allegra 800 12/92

Crown Cruise Line Crown Jewel 820 9/92

Diamond Cruise Line Radisson Diamond 354 5/92

Majesty Cruise Line Royal Majesty 1,056 7/92

Holland America Line Statendam 1,266 —/92

Norwegian Cruise Lines Dreamward 1,246 12/92

Renaissance Cruises Renaissance VIII 114 5/92

Royal Caribbean Cruise Majesty of the Seas 2,354 4/92

Royal Viking Line Royal Viking Queen 212 2/92

TOTAL— 12 ships 11,282 berths

Source: CLIA

Ijrowth continues to be the buzz word in the cruise shipping indus- try, as cruise lines add new multimillion dollar ships and ex- pand itineraries to tap a vast poten- tial market. Cruise ships worth $4 billion have been ordered for the first half of this decade. Many in- dustry analysts predict that over 10 million passengers will cruise annu- ally by the year 2000.

Cruise Lines International Asso- ciation (CLIA), which has 34 mem- ber lines representing 97 percent of

North American-generated passen- gers, predicts that during the next five years the cruise market may represent anywhere from a $50 bil- lion to $80 billion opportunity.

Since 1970, the cruise industry has had a compound annual growth rate of 9.8 percent per year, tripling in size every 10 years. Over 40 million passengers have taken cruises since 1970 (See Table 1).

James G. Godsman, president of CLIA, said: "The growth numbers are indeed impressive. Twelve ships will debut in 1992, representing over 11,000 berths [see Table 2]. This increase in berths continues to echo

Bucking the trend of flat travel industry performance last year—and despite the Persian Gulf and the recession—the cruise industry posted a double-digit gain in 1991. "Looking ahead to 1992, I see at least a 10 percent growth over last year," said Mr. Godsman. "With all the new ships and the value-packed opportunities, I predict the cruise industry will continue to lead the travel industry in customer satis- faction and give customers their most memorable vacation experi- ence."

Twelve new ships debuting this year range in size from 200-passen- ger yacht-like ships to 2,600 pas- senger megaliners. Several wi 11 be radically styled and incorporate state-of-the-art technology. From one ship with twin hulls to another with computer-controlled sails, this year's new ships will add to the diversity of the cruise product, cre- ating new itineraries, lifestyle and service options for the traveling pub- lic.

Previously closed ports in former

Soviet East Russia—including the cities of Vladivostok and Korsakow on the Isle of Sakhalin—will be added to several cruise lines' itiner- aries.

Exotic ports-of-call in India,

Singapore, Malaysia, Turkey and

China will be among many itinerar- ies.

Nice, France, will be a stop for one luxurious ship and all of South

America is another itinerary during a 50-day circumnavigation of the continent.

And if those locales aren't exotic enough, this year two passenger- carrying vessels will attempt the voyage through the Northwest Pas- sage. The Frontier Spirit, operated by Frontier Cruises, attempted the voyage last year but was prevented by impassable ice at Point Barrow in northern Canada, and the ice- breaker Kapitan Khlebnikov, which will make its debut in the Canadian

Arctic.

Table 1—Recent Growth Trends

By Year, 1980-1990 % Growth vs. Prior Years

Year Annual Passengers 1980 13.5 1981 1.7 1982 1.2 1983 15.2 1984 9.9 1985 13.4 1986 13.8 1987 11.0 1988 9.5 1989 2.4 1990 13.5

Average Growth Rate— 9.8%

Source: CLIA the strong demand from passengers."

Mr. Godsman added that new berths have more than doubled since 1980 and should reach 120,000 by 1995.

The cruise market is so lucrative, in fact, that it has given new life to the S.S. United States. The 990-foot one-time record holder for the At- lantic crossing seemed destined for the scrap heap until a Turkish ship- ping line, Mormara Investments, recently bought her for $2.6 million.

According to one source, the firm intends to refit her at a cost of $145 million. The United States was built in 1952 by Newport News Shipbuild- ing at a cost of $78 million.

Table 3—Cruise Ship Construction (On Order Or With Letters Of Intent)

Ship Capacity Line Builder Delivery

Club Med II 386 Club Med Havre 5/92

CostaAllegra 800 Costa Cruise Fincantieri 12/92

CostaRomantica 1,300 Costa Cruise Fincantieri —/93

Crown Jewel 820 Crown Cruise Union Naval 9/92

Diamond Radisson 354 Diamond Cruise Finnyards 5/92

Dreamward 1,246 Kloster Cruise Alsthom 12/92

Fascination 2,044 Carnival Cruise Kvaerner Masa —/94

Imagination 2,044 Carnival Cruise Kvaerner Masa —/95

Maasdam 1,266 HAL Fincantieri —/93

Majesty of the Sea 2,354 RCCL Alsthom 4/92

Renaissance VIII 114 Renaissance Apuania 5/92

Royal Majesty 1,056 Majesty Cruise Kvaerner Masa 7/92

Royal Viking Queen 212 Royal Viking Schichau 2/92

Ryndam 1,266 HAL Fincantieri —/94

Sensation 2,044 Carnival Cruise Kvaerner Masa —/93

Society Adventurer 188 Unknown Finnyards N/A

Statendam 1,266 HAL Fincantieri —/92 (2) SWATH 354 Diamond Cruise Finnyards N/A (4) SWATH 1,000 Swathtech McDermott N/A

Unnamed 220 Swedish America Ferrari —/93

Unnamed 260 Navieras Dosmares AESA N/A

Unnamed 1,975 P&O Meyer Werft —/95

Unnamed 820 Crown Cruise Union Naval —/93

Vivamar 500 Hoteles AESA 4/92

Windward 1,246 Kloster Cruise Alsthom 6/93

Total— 28,491 berths/29 ships

Source: Maritime Reporter

Annual Passengers (Millions! (2 Day or More Market) 4 4.0 3.5- 3 i 2.5 • 1.5 1.4 53

IBI 0.5 llB 1SSS Hi 1970 1980 1991

EadmMi

Cruise lines have also been able to expand their business by adding state-of-the-art communications for conferences and meetings. "Cruises are ideal for business conferences and incentives," said Mr.

Godsman. "They allow enough time for comprehensive, effective meet- ings, but still provide a relaxingtime away from the office and are a highly praised reward."

In addition, even the most driven business person can "keep in touch" with cellular and satellite phone ser- vice that's now being offered on most ships. 28 Maritime Reporter/Engineering News