Page 60: of Maritime Reporter Magazine (July 1993)

The Sun Viking

Cruise Market Outlook

Recent Orders, Future Prospects Bode Well For Cruise

Ship Builders, Repairers and Suppliers

By Greg Trauthwein, managing editor

While the fervor over the recent spree of newbuildings and op-tions contracted in the cruise ship segment for the first half of 1993 is encouraging, long term prospects for the building and outfitting of passenger cruise ships is strong according to industry insiders, and based on the industry's recent history and well-recorded penchant for growth.

While the latest news of multi- million dollar vessels contracted for multi-ship orders will always domi- nate the headlines, some more subtle recent, non-related maneuverings seem to indicate that those who build, repair, supply and operate cruise ships are in for a prosperous voyage.

Looking Back

It is no secret that the cruise market has enjoyed a market boom over the past ten or more years which few industries can match. The cruise industry has experienced an aver- age annual passenger growth rate of nearly 10 percent according to the

Cruise Line International

Association's (CLIA) January 1993 survey. By CLIA's best estimates, by the year 2000, the cruise market will accommodate up to eight mil- lion passengers per year and repre- sent a $50 billion dollar opportu- nity. Similarly, this consumer in- terest has fueled demand for new tonnage, and according to Jim

Godsman, president of CLIA (New

York), between 1981 and 1992 the average capacity increase was 8.2 percent. While the demand for ca- pacity for the next half decade is a more modest 5.2 percent, based on vessels contracted and planned, said

Mr. Godsman, it still represents a boon to the builders and suppliers. "Any story on the cruise market has to start with the question, is the market there?," said Mr. Godsman, "and the answer is an emphatic

Yes'." He has, though, noticed in- creased caution on the part of owner/ operators of late, a fact he attributes to the rising cost of vessels, the process of raising capital, yard com- petition and the economy in gen- eral. Despite these concerns, Mr.

Godsman is bullish on the coming years, because the cruise market's changing demographics—in 1986 the average age of new cruisers w 52 years, today it is 43 years accor ing to CLIA statistics—equates to demand for new designs and ame~~ ties, which in turn means new buil ings or refittings. "Recent deliveri are geared to a younger market, y can see it," he added. "We have probably seen the mo dramatic period of growth in passe ger shipping," said Rod McLeo executive vice president of sal marketing and passenger servic with Royal Caribbean Cruise Lin (Miami), and chairman of the m aging committee of CLIA. "In t past 52 months we have more th tripled the size of our company, ing from 4,000 to 14,000 berths, of the major players were gobbli up ships over that period." Desp 60 Maritime Reporter/Engineering News