After Several Stormy Years, Some Cruise Lines See Smoother Sailing

At least three companies--two of them in Los Angeles--are betting that the cruise industry is sailing into smoother waters.

Los Angeles-based Sitmar Cruises recently announced that it is investing $306 million to build two ships that will double the cruise line’s passenger capacity.

And Western Cruise Lines of Los Angeles and its sister firm, Eastern Cruise Lines of Miami, announced that they are merging with Sundance Cruises of Seattle.

The cruise business has faced problems in recent years because too many ships have been chasing too few passengers after a popularity surge in the 1970s pushed the industry into overbuilding.

“The cruise business right now is the fastest-growing segment of the travel industry,” said Julie Benson, manager of public relations for Sitmar Cruises. But we have a large overcapacity problem. We still have a big challenge to fill the ships.”

Benson said Sitmar’s building of twin 1,400-passenger ships represents the company’s vote of confidence in the future of the industry. Sitmar currently operates four ships in North American and South Pacific waters.

Only 10 million people, or slightly more than 4% of the U.S. population, have taken cruises, so “the untapped market out there is very significant,” Benson said.

The two 62,500-ton vessels, which are being built by French shipbuilder Alsthom/Chantiers de l’Atlantique, will be introduced at the end of 1988 and 1989.

Separately, Western Cruise Lines and Eastern Cruise Lines, both subsidiaries of Gotaas-Larsen Shipping of Oslo, Norway, said they are joining forces with Sundance Cruises through an exchange of stock.

Stanley B. McDonald, president of Sundance, will become co-chairman of the new, still-unnamed company along with Richard Fain, joint managing director of Gotaas-Larsen. Bernard A. Chabot, president and chief executive of Eastern/Western, will be president and chief executive of the new company, which will be based in Miami.

The company’s three ships will sail under the “Supercruise” banner.

Eastern/Western began looking for a merger partner because it found that many passengers, after trying one of the company’s three or four-day cruises, wanted to take longer cruises, which the company doesn’t offer. “They would cruise up out of our cruise line, and we wanted to keep those people,” a spokeswoman for Eastern/Western said.

Gotaas-Larsen also owns Royal Caribbean Cruise Lines.