Caribbean's Cruise Comeback

Only months ago did the cruise industry lament the state of Caribbean cruise pricing. "Lowly" and "depressing" are the words that spring to mind. But like the changing of the seasons, some are now pointing to a change in pricing direction for cruising’s long-favored destination.

castries harbor st. lucia

Some say there is a change in the direction of cruising pricing in the Caribbean (Castries Harbor in St. Lucia shown)

Tim Conder, a senior analyst with Wachovia, in a May cruise pricing survey, writes that “Caribbean pricing continues to show the most momentum, up almost 10 percent with positive recent trends for Carnival Cruise Lines and Royal Caribbean.” Deeper, he writes that “close-in” pricing remains strong; furthermore, for itineraries longer than seven days for the first quarter of 2009, pricing both for Carnival Cruise Lines and Royal Caribbean is predicted to be up. Pricing also will be up or flattish for cruises less than seven days in the first quarter 2009.

This year, pricing continues to shape up well for the Caribbean, according to Conder, who writes that pricing will be up for both Q3 and Q4 for both fewer than seven-day and more than seven-day markets.

Another analyst, Robin Farley of UBS Investment Research, shares Conder’s optimism, writing this month in UBS’ Cruise Lines Outlook 2008-09, “We note that the Caribbean is already seeing pricing improvement, partially due to easier comps, but also due to reduced capacity."

Conder’s and Farley’s rosy outlook is in stark contrast to what many travel agents have been saying as recently as April. “Prices for the Caribbean are so low that we are back to post-9/11 pricing for the area,” said Joan McCarty, owner of Specialty Travel in St. Petersburg, FL, at the time.

Sherry Laskin Kennedy, owner of Cruise One in Satellite Beach, FL, countered Farley’s claim about reduced capacity pushing pricing up, stating that availability was scarce because prices were “ridiculously lower than usual for summer cruises.” She goes on to say that the fall is shaping up similarly with “bargain-basement value.”

Today, agents still aren’t fully buying into the notion that pricing in the Caribbean is climbing upward. “There are still deals everywhere,” says Susan Reder, president of Altour Classic Cruise & Travel in Woodland Hills, CA. “Prices are still so good.”

Henya Lish-Gebeloff, a senior leisure consultant with Largay Travel, Inc., in Waterbury, CT, says that for the cheaper cruise lines there are still some unbelievable bargains out there.

So who are we to believe? The front-line agents or Wall Street? Well, both. There are always going to be deals from every line,” says Art Sbarsky, himself a former cruise executive with Celebrity Cruises, Crystal Cruises and Norwegian Cruise Line and now a correspondent for industry newsletter Cruise Week. So while real pricing may be inching upward, deals still are ubiquitous.

“It's just a method of getting interest,” Sbarsky goes on. “The question is: how many rooms are available at those discounted prices and how steeply do prices go up after that? If the cruise lines would have some credibility to their so-called rack rates and not have such an insatiable desire to fill every single berth in search of the almighty on-board dollar, they may develop some stability and actually create a sense of scarcity.”

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