DESPITE continued concern about unemployment, interest rates and the high cost of living, the nation's economy is steaming ahead and cruise ships are enjoying a wonderful renaissance.
The cruise business has now grown to a $2 billion a year industry in North America alone. In 1982, 1.5 million people took cruises. In 1983 the figure rose to 1.6 million, and industry experts predict 1.8 million cruise passengers by the end of next year.
For many American travelers, 1958 was a year that marked the beginning of the end of a great era. The start of the new jet age, ushered in by the long-range 707, cast a giant cloud over the future of the stately cruise liners.
Traditionally, people didn't "cruise" aboard these mammoth ships. They crossed--in elegance, style and luxury. Shipboard life meant endless pampering, one long, grand, formal ball across the oceans. There could be no denying that getting there was half the fun.
Those were the days of ships like the Normandie, the Ille de France, the Mauretania and the Liberte. Later came the floating legends: the Queen Elizabeth, the Queen Mary, the United States, Constitution and Independence.
But they were all vessels destined to become steel dinosaurs as the costs of an ocean voyage--in both money and time--became wildly prohibitive.
By 1959, Americans had quickly defined travel progress as the shortest time spent between two points. In one year, the airlines had secured 63 percent of all Atlantic Ocean passenger traffic. The fate of the majestic liners was nearly sealed.
For the next two decades, the number of passenger ships dwindled. Entire passenger lines disappeared or were quietly scuttled. Beautifully equipped ships found themselves either slipping quickly into disrepair or sent prematurely to the shipbreakers.
Now, in 1983, all that has changed dramatically. Miami and the West Coast are both booming port areas, new destination port cities are being added by the dozens, and the Cruise Lines International Association (CLIA) reports that by 1985 the number of cruise ships will grow by 25 percent, with 18 new or reconstructed ships joining 68 ships currently cruising the world.
"We've seen some tremendous growth in this industry," says Warren Titus, chairman of Royal Viking, considered the Mercedes of cruise lines. "We've been able to outpace other segments of the travel industry. We're seeing a new generation of managers in this business. As an industry, we've become less regulated and more promotional in nature." Titus explains that his line "deregulated voluntarily--we did what the airlines were required to do. And we did it as a marketing consideration. More and more, we want cruising to be a viable economical alternative to simply going to another resort area."
As a result, companies like Royal Viking have now become less rigid in their approach to their ships, their itineraries and their fares.
One statistic that is particularly appealing to cruise line marketers is also particularly staggering: less than 5 percent of the U.S. population has ever taken a cruise. (That may account for the more than $1 billion the cruise industry will be spending on new ships in the next three years).
In 1983-1984 there will be more one- and two-week cruises. Some lines will be offering shorter, four-day cruises, and some, like Cunard and Holland America, will weigh in with their more traditional 89-day, around-the-world extravaganzas.
"The bottom line," says Titus, "is that people can now afford to cruise. And there's a huge market out there." And, for once, there is an extremely wide range of cruise fares offered, ranging from $195 for a two-day mini-cruise on Cunard, to a whopping $289,000 for the deluxe penthouse suite on the Queen Elizabeth 2's World Cruise.(For those who like figures, that works out to a mere $3,247 a day for the cruise--not including your bar tab or tips).
While the more affluent (with incomes in excess of $25,000) account for a substantial 50 percent of the cruise business, members of CLIA report a significant shift--an increase from 6 percent to 20 percent in the number of passengers with incomes less than $15,000.
The number of younger passengers is also growing. In 1982, more than 41 percent of those taking their first cruise were under 35.
Between now and 1985, more than 20,000 cruise berths will be added in the North American market. (More than 10,000 new berths were added last year alone). "We're building two new ships, and that should indicate how we feel about the cruise business," says Robert McKenna, 46, president and chief operating officer for Holland America. He is part of the new breed of executives who are bullish on the cruise business. "Within a one-year period," he boasts, "Holland America will have invested $320 million in new ships."
One ship, the 1,204-passenger Nieuw Amsterdam, was just launched. In 1984, the second addition, the $160-million Noordam, will make its inaugural cruise. (Also making their debut this year will be Sitmar Lines' Fairsky, Commodore Line's Caribe and a recently stretched version of Royal Viking Line's Royal Viking Sea.)
One of the "new" ships in the cruise market isn't really new. Heritage Cruises has introduced the Sea Cloud, a legendary ship for cruise passengers looking for something a little different.
Originally designed for E.F. Hutton and Marjorie Merriweather Post, the luxurious Sea Cloud is the largest private sailing ship ever built. Five years ago, the ship was refurbished at a cost of $6.5 million. Twenty-eight staterooms were added to the original 13 suites and staterooms. The ship, which offers winter 1983 cruises from Antigua (starting off with a 14-day Christmas-New Year sailing) and spring 1984 cruises in the Mediterranean, holds just 80 "guests."
Holland America's McKenna thinks the money will be well spent. "What's happening in this business is that cruising is becoming an everyman vacation. At one point," he reports, "our ships were transportation. In the transatlantic days it was looked on as purely an upscale thing of going from point A to point B. Now, we're working to eliminate that impression. Cruising has a broader appeal, younger passengers, and we can offer a great variety of alternate vacations."
Companies like Holland America, Royal Viking, Cunard and Norwegian Caribbean are considered at the top of the cruise scale. Each of them is highly competitive and boasts the four highest percentages of repeat passengers in the business. "We like people to reminisce about the grandeur of the luxury ocean liners," says McKenna, "but at the same time we also want to make sure that things like our air conditioning is state of the art. It's the entire cruise experience that counts."
Counting along with McKenna is Joseph Watters, president of Princess Cruises. "We're seeing a resurgence in bookings. More and more young people are cruising with us who at one time looked at this as something not for them. And they're not just cruising because they're somehow intrigued with the idea," Watters argues. "They really want to do it. They come back liking it and telling their friends. This is a word-of-mouth business," he emphasizes, "and we can spend millions of dollars in ads, but it doesn't mean anything without word of mouth."
Watters just committed Princess to spending $150 million on building a new Super-Love boat, the mammoth 40,000-ton Royal Princess. When launched next year, the 1200-passenger ship will boast two acres of sun deck (the QE2, by comparison, offers one-third of an acre), four swimming pools, a freshwater Jacuzzi, casino and showroom. Perhaps the most attractive aspect of the ship is that every cabin will be an outside cabin.
Another attractivefeature of all the Princess ships is that the line, aware of the booming singles cruising market in North America, offers one of the best "single supplement" fares. Many lines simply double the cabin fare for one person traveling alone. Princesscharges just a 10 percent premium. "We're exclusive in doing that," says Watters. "We want to get people while they're single. If they enjoy themselves, we figure they'll come back to us when they're a couple or a family."
Watters thinks one of the reasons for Princess' big singles crowd is "The Love Boat" series. "One of the best things that happen on a cruise is that people want to meet new friends," he points out. "Very few vacations offer this real an opportunity to meet and build friendships." Not surprisingly, in the last five years more than 100 passengers have met, fallen in love and later married someone they met on a Princess cruise.
Special interest cruises continue to be strong favorites. Pacquet Cruises will be celebrating its 23rd annual Music Festival at Sea this year, and Norwegian Caribbean will be trying out theme cruises for the first time.
Cunard is still going strong with a parade of guest lecturers on their QE2 transatlantic and around-the-world cruises. Yet a number of cruise lines are rethinking their "theme" and enrichment cruises.
Sitmar lines no longer offers lecturers on history or investments. However, on their summer Alaska cruises, the line featured all-nostalgia, big-band music cruises. Their 1983 trans-canal cruises offered a "Broadway at Sea" theme, with stars like Ben Vereen performing.
Sitmar also offers something sorely needed on other lines--a youth program. Throughout the year, Sitmar features a youth activities coordinator and four children's counselors on each cruise. The team helps to supervise young and teen-age children between 9 a.m. and midnight each day of the cruise.
The program itself includes a teen center, youth center and swimming pool just for kids, special films, electronic games and disco dancing. For pre-teens, Sitmar offers magic shows, skits and plays, and more than an occasional ice cream or pizza party. In the summer months (usually early June through late August) Sitmar expands the youth staff to include a teen coordinator, two theatrical directors and four additional children's counselors.
This past summer, Royal Viking Line offered classical music cruises of the Mediterranean and Adriatic, with performances at sea (and in port) by such stars as John Browning and Anna Moffo. The highlight of the trip came in Yugoslavia, when the Solists Di Zagreb performed for the passengers inside a well-preserved medieval church in Dubrovnik.
What made the cruises particularly exciting was that passengers were encouraged to bring along their musical instruments. (As a result, a number of impromptu chamber groups were formed during the voyages). The line plans a similar program next year.
One of the more daring special cruises was launched by American Hawaii cruises. In June 1980 the company renovated and returned to service the Constitution and Independence for special seven-day cruises around the Hawaiian Islands. After a shaky start, when one of the ships was taken out of service for six months, the company brought in a new management team, spruced up service, food and itineraries, and enjoyed a well-deserved 65 percent increase in bookings this year.
What makes their ships potentially a bargain is their U.S. registry, allowing for tax-deductible meetings while cruising. (A recent tax bill permits U.S. flag ships to provide the same tax benefits for meetings and conventions as land-based facilities). Both ships have specially designed conference centers that can hold up to 200 people.
Congress is now debating a proposal that would allow two British ships (the Cunard Princess and the Cunard Countess) to be bought by a Florida-based operator and reflagged as U.S. flag ships.
For the time being, the cruise ship dream merchants sail on a benevolent sea. Still, despite the upbeat figures, the industry is facing the possibility of an all-out marketing war, as cruise lines attempt to fill all their new, additional berths.
Already, the competitive aspects of marketing cruises have begun to take the form of widespread discounting and price wars, promotional deals, and two-for-one fares. Earlier this year, Sitmar introduced a "super saver" fare program. "Fly-free" programs offering free airfare to home-port cities, a popular marketing approach dropped by some cruise lines last year, are on the rebound.
A pleasant outgrowth of the direct fare competition is the participation by a number of the major cruise lines in already existing airline frequent traveler mileage award programs. (Royal Viking, for example, is linked with United Airlines' "Mileage Plus" program, and Holland America is part of the American Airlines "Advantage" mileage program.)
"It's become a buyers market," says Royal Viking's Titus, "and the capacity problem experienced by the cruise lines can only benefit passengers in the coming year."