CRUISE SHIPS ARE A PROVEN VENUE

Cruising is a respected and proven venue that offers the meeting planner many  benefits. The planner can be confident a cruise is the right choice that no other venue is so affordable. Cruises combine work and play for the meeting participant concurrent with entertainment for other family members in a seamless fashion. The fact that 9 out of 10 people have never experienced a cruise creates tremendous opportunity for the event planner.

The floating luxury environment makes the logistics of meetings manageable, increases attendance, and reduces outside distractions. There is a great variety of leisure time activities to satisfy diverse interests. All-inclusive pricing eliminates the complications of restaurant bills, rental cars, taxi receipts and the many other extra and often unpredictable expenses of land-based venues.

Meetings aboard ship substantially reduce the management time and effort required to plan and coordinate transportation, activities, meals, accommodations, meeting space & support, equipment needs, and staffing.

To the individual honored guests, a cruise conference becomes an unforgettable, uncomplicated, and completely carefree travel adventure that can be shared by the entire family. The shipboard life-style encourages a feeling of relaxed camaraderie not as easily achieved on land. This has consistently improved meeting results.

Homeports Drive Demand and Economic Benefits*

The numbers are in and the 2004 economic report shows that the cruise industry has increased its total economic benefit to the U.S. economy by an average of 12 percent each year over the past three years. In 2003, cruise lines and their passengers were responsible for the generation of $25.4 billion in economic benefits to the U.S. economy,supporting jobs for more than 295,000 U.S. workers paying $11.6 billion in wages and salaries. Since 2000, the North American cruise industry has added more than 50,000 berths, increased passenger carryings by more than 1.8 million passengers and increased gross revenues by $1.2 billion.

In 2004, the cruise industry carried 9.8 million people on cruise vacations throughout the world and generated $14.7 billion in gross revenues. “The cruise industry’s growth in a time period that has been challenging on a global economic scale is a testament to the cruise lines’ ability to change with the current market,” said Michael Crye, president of the ICCL. “Our substantial contribution to the U.S. economy and the creation of jobs, while the industry continues to grow through the lines’ marketing of drive-to markets and reduction in fares, has allowed the cruise industry to be a leader in growth in the travel and leisure sector.”

Cruise lines and their passengers generated just over $12.9 billion in direct spending in the
United States during 2003, an 8.1 percent increase over 2002. Economic benefits primarily arose from:

• Spending by cruise passengers and crew for goods and services, including travel and pre- and post-cruise vacation spending

• Employment of shore-side staff by cruise lines for headquarters, marketing and tour operations

• Cruise line expenditures for goods and services such as food and beverages, fuel, hotel supplies and equipment, navigation and communications equipment, etc.

• Cruise line expenditures for services at U.S. ports-of-embarkation and ports-of-call

 • Cruise line expenditures for maintenance and repair of vessels and capital spending for passenger terminals, office facilities and equipment

Passenger Growth

As in prior years, the industry was able to increase passenger carryings and its occupancy rate despite significant growth in capacity. During 2003, the industry carried an estimated 9.8 million passengers worldwide, a 6.6 percent increase in passenger growth over the previous year. An estimated 7.5 million U.S. residents took cruise vacations throughout the world and accounted for 76 percent of the industry’s global passengers.

U.S. Ports

U.S. ports increased embarkations over 9 percent from 2001.Together, U.S. ports handled 7.1 million cruise embarkations, which accounted for 72 percent of global embarkations. The top
ten ports (see chart below) accounted for 92 percent of all U.S. cruise embarkations.
Florida ports continued to lead the market in 2003, accounting for two-thirds of all U.S. embarkations. California ports experienced a 14 percent growth in cruise embarkations, with much of the growth as the result of the opening of a cruise terminal at the Port of Long Beach in April 2003. New York experienced more than a 30 percent growth for the second consecutive year with 438,000 cruise passengers. Smaller ports, such as Galveston, New Orleans and Seattle, experienced the largest percentage increase in growth as the cruise industry continued to expand its deployment to offer more cruises in ‘drive-to’ markets. These three ports have now become major homeports and are among the nation’s top ten cruise ports.

Passenger Spending

The study examined on-shore spending by passengers and crew for an average cruise ship call in the United States. A 2,000- passenger ship with a crew of 950 generated an average of approximately $184,000 in passenger and crew on-shore spending per call in the homeport city. Passengers that included overnight stays in the homeport city spent approximately $195 per visit. State Impact From Alabama to Wyoming, the cruise industry affected the economies of all 50 states.

Wages

The cruise industry paid just over $1 billion in wages and taxes related to its U.S.-based operations, a 1.9 percent increase from 2002. The cruise lines directly employed more than 29,000 U.S. residents and paid wage income of $850 million. Crew wages increased nearly 19 percent in 2003 to an estimated $1.52 billion. Over the past two years, crew wages have increased by 30 percent. During 2003, the cruise industry employed approximately 111,000 crew members.l

* This article appeard in Even Keel 2004

Author - Richard Fain,  Chairman and Chief Executive Officer of Royal Caribbean Cruises Ltd.