A big question mark hovers over the cruise industry

The first quarter of 2012 was supposed to be a sweet spot for passenger cruise lines. Wave season, as it’s known, marks a time when cruise companies and travel agents roll out deep discounts on cruise vacations and rack up lots of sales.

But that changed Jan. 13, when the Costa Concordia struck rocks off the western coast of Italy, killing at least 11 passengers in one of the worst cruise-ship tragedies in recent times. Images and videos of the listing liner have been shown appeared continually on TV and online in the media, often accompanied by interviews with survivors, who say panic and chaos took hold during the ship’s deadly slide.

The Concordia tragedy could not have come at a more inopportune time for the cruise industry, which is recovering from the 2008 economic bust. Before the accident, the cruise market was expected to grow 5.6% percent and carry 20.3 million passengers in 2012, according to a forecast from Cruise Market Watch.

FOR THE RECORD:
Cruise travel: In the Jan. 22 Travel section, an article about the outlook for the cruise industry in 2012 described the American Queen as the old Delta Queen. The American Queen was one of three boats operated by the former Delta Queen Steamboat Co. and now is operated by the Great American Steamboat Co. —

FOR THE RECORD:
Travelzoo: An earlier version of this online article said that the online site Travelzoo sells cruises. It doesn’t sell cruises. It highlights cruise deals.

Now industry observers wonder how long it will take for the accident to fade from consumers’ minds and the idea of cruises as a good vacation value to resurface. Carnival Corp, which owns Costa, said in a statement that the loss of the ship alone would cost the company $85 million to $95 million. “In addition, the company anticipates other costs to the business that are not possible to determine at this time,” the statement said.

Some say avid cruise passengers probably won’t be deterred, but the occasional or novice cruiser might be skittish. “The next few weeks will be very telling,” said Gabe Saglie, senior editor of Travelzoo, the online site that highlights cruise deals. “It’s really going to be about the cruisers who are not your seasoned cruisers.” Saglie said wave season might continue a little longer this year, with even deeper discounts and incentives.

Peggy Goldman, owner of Friendly Planet Travel in Jenkintown, Pa., said she had a few calls from customers asking about safety issues but no cancellations so far. Goldman thinks the Concordia accident will have an impact on sales in the short term, but then the rarity of a cruise ship tragedy of this magnitude will become clearer. “I can’t imagine that any other captain who wants to keep his job, or any cruise line that wants to keep its stock price up, is going to allow any sloppiness in their safety procedures after this,” Goldman said.

How “other costs” will play out for Carnival and other cruise lines remains to be seen. In the meantime, these trends might indicate what’s on the horizon for cruises and cruise passengers in 2012.

How “other costs” will play out for Carnival and other cruise lines remains to be seen. In the meantime, these trends might indicate what’s on the horizon for cruises and cruise passengers in 2012.

Price points: Andi McClure-Mysza, co-owner of Montrose Travel in La Crescenta, said passengers should expect the cost of a cruise to go up a bit this year. “From a trend standpoint, prices are still depressed,” she said. “So there are still good values to be had out there.”

Online travel company CruiseCompete calculated average 2012 prices charged by Carnival, Celebrity, Holland America, Norwegian, Princess and Royal Caribbean. As of this month, the cheapest inside cabin price per passenger starts at $681 for a February cruise, $687 for March, a low $615 for November and $621 next January. Summer prices jump to $1,064 in July and $1,004 in August.

These average prices aren’t exactly what you’ll pay; they’re just a snapshot of what costs look like at the moment.

Ships’ shape: New ships always create buzz and excitement. Disney Fantasy (2,500 berths), Carnival Breeze (3,690 passengers), Celebrity Reflection (3,030 passengers) and Oceania Riviera (1,250 passengers) are among seven set to debut this year. Disney Fantasy, a sister ship to the Disney Dream, also arrives this year. (The cruise line will sail from New York, Seattle and Galveston, Texas, for the first time this year too.) Royal Caribbean’s sister ships continue to be the big draw for bookings. “Sales are booming on Oasis and Allure,” McClure-Mysza said. Where else but on the Allure can you walk amid thousands of plants and trees in a Central Park at sea?

There’s not much on the horizon in the “wow” department. Cruise Critic reports that renovations (Celebrity Summit and Millennium, for example, as well as three Carnival ships being upgraded to Fun Ship 2.0 status) are favored over new builds.

River madness (still): River cruising is the juggernaut that just keeps rolling along. Europe, with the Rhine, Rhone and Danube, is a favorite of the river cruise set, while new destinations in Asia such as the Mekong River in Vietnam and Cambodia pique interest too.

The big news for U.S. river lovers is the return of a paddle-wheel steamboat to the Mississippi River. The American Queen (the old Delta Queen, a replicated steamboat) will start sailing in April with itineraries on the north and south stretches of the Mississippi River and on the Ohio and Tennessee rivers. American Cruise Lines will launch a new Victorian-style riverboat, Queen of the Mississippi, in August.

Home-port advantage: Sixty percent of all cruise ships are positioned in the Caribbean, but there’s a growing trend toward boosting home-port options so passengers can drive, not fly, to ships. For example Galveston, back on its feet after devastating Hurricane Ike in 2008, will be a temporary home for Disney Magic and Crown Princess this year. And post-Katrina New Orleans is on the rebound too as winter homeport for Royal Caribbean’s Voyager of the Seas.

Kids are here to stay: DreamWorks characters on Allure, Oasis and Freedom of the Seas; Mickey Mouse and friends on Disney cruises; and Norwegian’s mash-up with Nickelodeon are sure signs that the boom in kid-friendly cruising shows no signs of abating. “Multi-generational families are so prevalent on cruise ships that they now have to create adult-only areas,” McClure-Mysza said. “Ships will be finding ways to better manage families.”

Extra onboard costs: A trend toward flexible dining options, with separate prices for meals and drinks, will grow. Although it’s a plus to have more dining options, Carolyn Spencer Brown of Cruise Critic labeled this as “unbundling” of fares and warns passengers to be aware of the extra spending and how it might affect their travel budget. “You’re paying decently cheap fares but you can spend a million times more on board,” she said. “No one’s charging you for a pillow yet, but some can make it hard not to spend more.”

For example, she said, six of 10 restaurants on the Norwegian Epic charge for meals and drinks (the dining room remains a free option). Other ships feature an all-you-can-drink charge. Her point: All the nickel and diming might mean you could afford a luxury line cruise with more extras included, so do the math.

What’s hot: The Mediterranean is flooded with ships cruising the coastal waters of Italy, Greece, Spain and France. That may cool, experts said, and these destinations may be on the upswing.

— Caribbean. The islands are becoming popular again because of the variety of cultures and destinations. “You could do the same cruise every year for a decade and always discover new things,” Spencer Brown said.

— Hawaii. For the first time, the Disney Wonder will cruise from Los Angeles to Hawaii in April and again in October. Trips are long (14 to 15 nights) with more than a week of at-sea days. Norwegian continues its Pride of American tours of the islands that last seven to nine days once you are in Hawaii.

— Australia. This could be the hot new destination, Spencer Brown said. Carnival Solstice will send a ship for an eight-day tour that includes Sydney, Melbourne, Adelaide and Perth. And ships such as Queen Mary 2 and Carnival Spirit will join the party too.

Mexican cruises: Mexico remains under a cloud and has cast a troubling shadow over cruises from the port of Los Angeles and elsewhere. Drug-cartel wars in border areas and the interior create the mistaken perception that ports along the Mexican Riviera also are riddled with violence — one many travel agents and cruise watchers say is unwarranted. “My personal message is that Mexico is alive and well, and I encourage people to look into it,” McClure-Mysza said.

Still, the U.S. State Department’s travel warning for parts of Mexico is enough to scare off some. The resulting slump chased Royal Caribbean and Norwegian Cruise Lines from L.A. last year, and Disney just announced plans to follow suit at the end of this year.

Paul Motter of CruiseMates.com has a different take on the Mexican Riviera. He defends Mexico’s west coast as a worthy cruise destination but thinks the itinerary could use some tweaking. “Mazatlan as a cruise port has very little to offer,” he said. “The port area is a very isolated and industrial place, and there’s no place to walk.” Spending two nights in Cabo San Lucas or Puerto Vallarta, he said, offers a better experience for cruisers who seek local culture along with their beaches.

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