Choppy waters for cruise lines

Cruise lines may be charting into choppy waters amid price dips for some of their cabins.

Luxury cruise liner MSC Lirica berths at Mina Zayed port in Abu Dhabi. Ravindranath / The National

Some of the world's biggest cruise lines are encountering choppy waters as prices for their cabins take a dip.

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Carnival, which operates ships under brands such as Carnival Cruise Lines, Princess Cruises and Holland America, warns that while bookings for next year are up from past years, they are commanding lower prices.

"Despite the uncertain economic environment, we anticipate a continued slow recovery in yields in 2012," Micky Arison, the chief executive of Carnival, said this week.

The industry uses the term "yields" in discussing how much money cruise cabins generate. Mr Arison did say, however, that the revenue from the company's European, Australian and Asian cruise brands remained steady from a year ago "despite … the geopolitical unrest in the Middle East and North Africa".

Still, experts warn that cabin costs have come under pressure lately and are likely to take time to recover.

"There certainly has been some commentary from cruise operators that there have been pricing pressures this season," said Lawrence Franklin, the director of strategy and policy at the Abu Dhabi Tourism Authority.

"I would imagine those pressures would continue into next season, given what's happening with global financial conditions." The local cruise market should perform strongly this year, observers say.

Between 170,000 and 190,000 cruise passengers are expected to visit the capital this season, up from about 150,000 passengers last season, Mr Franklin said.

Some 50,000 to 60,000 crew members are also expected to boost the local economy with their spending during the cruise season.

"The impact of crew is often ignored, but they generate substantial levels of expenditure," Mr Franklin said.

Large ships, including the MSC Lirica and Costa Favolosa, are projected to account for 95 per cent of calls to Abu Dhabithis season.

Another big player, Royal Caribbean, has its Brilliance of the Seasliner in its third season in this region. This winter it began its season earlier because of increased demand.

While the company ran cruises from January to April over the past two seasons, this time around Brilliance began sailing from Dubai last month.

"We started earlier because people are so interested in the Gulf itinerary," said Lakshmi Durai, the executive director in the Middle East for Royal Caribbean International. Yet there are still vacancies on longer sailings set for later this season, towards the end of March.

Those trips will stretch to ports in India as opposed to the current route that begins in Dubai and includes Fujairah, Muscat and Abu Dhabi.

Sales for the extended tour are "going", Ms Durai said, and she noted there had been "no big change" in prices for Royal Caribbean's cabins this season.

Royal Caribbean plans next December to introduce a different ship, Serenade of the Seas, to the region.

It is expected to make its debut after undergoing a "revitalisation programme" to include new amenities, Ms Durai said.

"It's way too early to say about the next season," she said of Royal Caribbean's booking levels for a year from now. "People are still thinking about this winter and summer."

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