Awash in a Sea of Deals

If last year was a difficult one in the travel industry as a whole, the cruise industry experienced the equivalent of the perfect storm.

Renaissance Cruise Lines and American Classic Voyages, already in financial straits, filed for Chapter 11 bankruptcy protection within weeks of the terrorist attacks. Other cruise lines, buoyed by the economic expansion of the last decade, had ordered new ships that have added thousands of berths and will add thousands more by the time the shipbuilding boom is over.

And in a story as old as the sea, the big fish are eating the little fish as big lines buy smaller ones, battling for supremacy in an industry in which the number of passengers has quadrupled during the last two decades.

The convergence of these cruise line storms, coupled with a still-shaky economy, signals some deals dead ahead for anyone, whether first-timer or veteran, who has been thinking about booking a cruise. The question now is how long the bargains will last.

Cruise prices began to fall last year soon after the terrorist attacks. “We held up pretty well right after Sept. 11, but in the latter part of the year business was off 10% to 15%,” says Jim Godsman, president of the Cruise Line International Assn. (CLIA), a New York-based industry group that represents 95% of cruise line companies. “It was then that prices really dipped.”

In a study done by the cruise industry in 2000, per diem costs were used to compare cruises with a land vacation on which travelers are responsible for lodging, transportation, meals and entertainment, all of which are included in the price of a cruise. The results, including air fare for both: $263 per person per day for a land vacation versus $252 for a typical cruise.

Cruise prices dropped even lower last year, and although fares currently aren’t as cheap as they were last fall, it’s still a buyer’s market. Prices on some cruises have fallen below $100 per day, excluding air fare. And it’s not just on the price-sensitive low end of the market where fares have declined either. Many of the higher-end lines are quietly offering incentives to fill those ships.

Since 1980, when 1.4 million North American passengers set sail, the industry has watched the number of passengers grow by 8.4% a year. By 2000, nearly 6.9 million passengers had hopped on board. But that’s still a fraction of the 68.8 million potential cruisers in North America.

This growth--and the potential for it--has fueled the greatest capital investment in new ships in the industry’s history, with hundreds of millions of dollars being poured into construction.

Between now and the end of 2003, 26 new ships will add 50,000 berths, even after accounting for six ships being retired.

For the consumer, this could add up to substantial savings as the industry struggles to balance supply and demand.

“There is an oversupply in cruising, with some prices I haven’t seen in 15 years,” says Judy Lucas, owner of Concierge Cruises and Tours in Tucson, which specializes in cruises. For travelers who are considering a cruise, the sooner they can make plans, the better, Lucas says.

“In December, during the high season, you could have gone on a 12- to 14-day cruise on a premium ship for $900,” she says. Those kinds of deals are not available now, she says, and the same cruise is as much as $1,100--still a good value but not the rock-bottom fares of just weeks ago.

In trying to separate the industry hype from the real deals, I culled the lowest advertised fares from last year at this time and compared them to like itineraries on the same lines for this year. What I learned supports the idea that, overall, prices have come down from last year at this time. (See chart, L7.)

But remember, fares remain fluid; finding them is one challenge, and getting them is another. And no one is quite certain what the future might hold.

“Consumers think the prices they saw in November will continue,” says Steve Cosgrove, owner of Dynamic Travel and Cruises in Southlake, Texas. “A Disney cruise was $399 in November; now it’s $1,299.”

And, he adds, “Mickey’s going to fill up this summer.”

Sale of Sails

“It’s not ‘Let’s Make a Deal,’” Cosgrove says. “Yes, there are deals, but you have to be selective and flexible.”

Here’s a sampling of some bargains I found recently comparing advertised rates, looking on the Web and talking with travel experts. Some caveats: These fares may have changed by press time or may have sold out, and your price will vary depending on gateway city, type of ship and cabin, and a host of other factors. And these prices may not include port taxes or air fare to distant gateways.

* Carnival Cruises: An introduction to cruising or a quick getaway, this line’s three-night Baja Mexico trip to Ensenada with a stop in Catalina on the 2,600-passenger Ecstasy departs April 29 from Los Angeles and starts at $329 per person (about $110 per night), double occupancy. (888) CARNIVAL (227-6482), www.carnivalcruises.com.

* Crystal Cruises: Panama Adventure departs April 27 from Los Angeles on the luxury Crystal Symphony, crossing the Panama Canal to Fort Lauderdale, Fla., on a 15-night cruise. Rates start at $3,945 per person, double occupancy ($263 a night), a savings of nearly $4,000 off the regular rates on this sailing. Contact: GalaxSea Cruises and Tours; (480) 998-7606, www.special-escapes.com, or Crystal Cruises, (310) 785-9300, www.crystalcruises.com.

* Princess Cruises: A six-night Alaska trip on the Dawn Princess departs Sept. 9 from Vancouver, Canada, to Seward, Alaska, for $599 per person, double occupancy (about $100 a night). Prices begin as high as $949 for the same itinerary on this ship at other times in the season. (800) PRINCESS (774-6237), www.princesscruises.com.

* Radisson Seven Seas Cruises: Two-for-one deals on a five-night Caribbean trip on the 350-passenger Radisson Diamond, leaving from San Juan, Puerto Rico, on March 22 and 27 and April 9, are $1,198 per person, double occupancy ($240 per night), including wine with dinner and gratuities. Recommended by Concierge Cruises and Tours, (800) 940-8385. Contact: Radisson, (877) 505-5370, www.rssc.com.

* Royal Olympic Cruises: An ocean-view stateroom on the Olympia Voyager for the Maya Equinox cruise, departing Houston on March 20 for nine nights along the Mexican and Central American “Mayan coast” and in the Gulf of Mexico, starts at $1,402 with an early booking discount ($156 a night). (800) 872-6400, www.royalolympiccruises.com.

* Seabourn Cruise Line: The small (only 208 passengers), deluxe Seabourn Legend sails the French and Italian Riviera, departing April 20 and 27 from Nice, France, on six-night itineraries that end in Cannes, with fares beginning at $2,499 ($416 a night). That’s 50% off the brochure rate. (800) 929-9391, www.seabourn.com.

* Silversea: The cruise line is offering a certificate for $500 savings per person for first-time guests who book any 2002 voyages; it may be combined with other savings programs. Must be booked by March 31. (800) 722-9955, www.silversea.com.

* Windstar Cruises: There is an early booking bonus of up to 55% off on 55 cruises, including six-night Mediterranean itineraries, on the new 308-passenger sailing yacht Wind Surf, starting at $1,895 ($270 a night). That’s 28% off the lowest price in 2001, Windstar says. (800) 258-SAIL (7245), www.windstarcruises.com.

Nailing Down Deals

Booking a ship trip can be a complicated process that requires the services of an experienced travel agent who specializes in cruises. There’s no sure-fire way to get the sale price of a lifetime, but there are a couple of helpful strategies.

Louise Slominsky’s experience may be typical. After the Fort Worth, Texas, resident lost her job in January, she decided she needed a respite before beginning her job search, so she and her husband, Tim, launched an online search for a cruise vacation, their second. They wanted a stateroom with a balcony on a seven- to 10-day Panama Canal trip.

First she did her homework; then she consulted an expert. Armed with information from Web searches, she sat down with a travel agent, who had brochures and a better knowledge of the quality of the ships and types of cabins.

But did she find a bargain?

“Not necessarily,” she says.

Because they were booking in late January for the middle of February, they did not receive the more heavily discounted early booking fare she had seen in promotional materials. Instead they got something “between the early booking fare and the standard brochure rate.” The brochure rate was $5,800 per person, double occupancy, but she got the cruise for $3,299. The lowest advertised early booking fare would have been just $1,719.

It was a combination of factors, including the sense that prices seemed to have hit bottom, that recently prompted me to book my dream cruise.

I have always wanted to cross the Atlantic aboard the Queen Elizabeth 2, then jet back aboard the Concorde. A Cunard and British Airways package offered a 50% discounted cruise fare on the QE 2 from New York to Southampton, England, combined with a $1,995 charge for an upgrade return flight on the Concorde.

While not exactly Nordstrom Rack prices, the package was hard to beat. The five-night cruise costs about $2,500 per person, based on double occupancy, for a 186-square-foot outside stateroom on the first deck near the pool (a savings of $700 from the 2001 Cunard brochure rates’ early booking offer). A one-way trip on the Concorde, London to New York, runs about $6,500.

Like Slominsky, I also went to a travel agent to book my cruise, and that turned out to be one of the smarter things I did. I had checked Cunard’s Web site, but my travel agent was consistently able to quote a fare 10% lower than the Web site’s for the same category cabin.

Travel agents are privy to special, “not for publication” deals and last-minute changes in pricing that the average Joe Traveler simply cannot get on his own. Don’t take advertised fares as the last word in deals either. Ask about lower fares or cabin upgrades, or upgrades to business-class seats for those fares that include air travel.

Also, in speaking with a travel agent, I was quoted a fare that was 13% lower than the fare a cruise line had advertised just the week before.

Changed and Changing

Prices clearly have stolen the spotlight lately, but that’s not the only difference in an industry facing new realities--some promising, some troublesome--that will affect passengers’ future.

Lucas, the Tucson cruise agent, thinks the cruise lines made a “huge mistake” in building so many ships. And, she says, “Sept. 11 made it even worse.”

From contract to delivery, the shipbuilding process can take up to four years, CLIA’s Godsman says, and some companies are talking about deferring future deliveries of new ships.

But “there is a real bullishness in the industry because of the huge pool of potential cruisers,” he says, and the changing demographics of the cruise passenger--which, according to Lucas, began to shift in the late ‘80s--support that.

For one thing, passengers are getting younger. In 1986 the average age was 56; in 2000 it was 50. Such statistics are partly fueling the projection that the untapped market numbers almost 70 million.

And, as in all segments of the travel industry, the terrorist attacks have affected cruises, from security to destinations.

Since Sept. 11, cruise lines have put a “Category 3” security alert, the highest possible, into place. As they embark, passengers must show two forms of identification, including a passport or birth certificate plus a government-issued photo ID.

Hand luggage is screened, and metal detectors and specially trained canines are being employed by on-board ship security.

Besides the added security on board, the industry has redeployed many of its ships from such places as the eastern Mediterranean to destinations the industry perceives as safer, such as Northern Europe and the Caribbean.

These “safer” destinations will each see an increase of more than 2% in the number of “bed days” (a measure that means, essentially, the number of days a bed is available for sale multiplied by the number of beds) compared with 2001, while the Mediterranean will see a decrease of 2.5%, Godsman says.

“Until things settle down, we want to fill our ships and make them more accessible to U.S. and Canadian ports so people can drive,” he adds. “We feel there is a desire to stay close to home.”

This means there probably will be more ships in areas that are closer to home and presumed to be safer for travel.

For an industry that has reported occupancy rates of around 90% in the past, the added berths could make it more difficult to maintain high rates, meaning more choices for the consumer and even lower fares than now.

But as last year showed, no one can really see beyond the horizon.

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James Gilden is a Los Angeles-based freelance writer.