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Farley Discusses Caribbean Cruise SoftnessMay 9, 2006 By: Susan Young Travel Agent
Robin Farley, a leisure analyst with UBS Warburg, told her firm's investors in a written note that the growing weakness in Caribbean cruise bookings has implications for long-term demand in the region. With a passport required by 2007 or 2008 for all Americans to travel abroad, she sees a slight lessening of berths allocated to the Caribbean. For example, this year 49 percent of Carnival Corp. brands' berths will be in the Caribbean, versus 51 percent in 2005. Royal Caribbean Cruises Ltd's two brands will have 56 percent of capacity in the Caribbean this year, versus 58 percent last year. The passport requirements may be problematic moving forward, particularly in attracting new cruisers. In the past, first time cruisers could—for many Caribbean ports—simply show a birth certificate or driver's license. That's now disappearing and some travelers who don't want to fly to a foreign destination, but who may have considered a cruise from a close-by home port to the Caribbean, may simply refuse to get a passport and seek out other U.S. land-based options. In addition, cruise lines are seeing much higher yields in Europe, and Farley says lines are extending their European seasons; in the past, the lines may only have stayed in Europe through late September or October. Retractable glass domes for outdoor pools also now allow winter Mediterranean cruises. Separately, winter cruising from New York to the Caribbean may ultimately help boost Caribbean price weakness, as the convenience of sailing from the Northeast could result in higher Caribbean pricing from that area. Long-term, Farley says the proposed widening of the Panama Canal could allow mega-ships greater flexibility in itineraries by allowing them to reposition to West Coast, putting the inventory wherever demand is. She also sees the potential for Cuba—if opened up—to revitalize Caribbean demand.