According to the Cyber Cruises order book, there are over fifty cruise ships (a combination of ocean and river vessels) on order for delivery between 2016 and 2020. Fifty. I imagine there are some ships that will be retired during that same time frame, but there won’t be nearly as many retirees as there will be new floats. That will be a lot of new berths to fill, which can be good news or bad news.
The good news is pretty simple. With more berths to fill week in and week out, the various cruise lines will still depend on the travel agent channel to help them keep their ships full. I am not so enthused to think that this means commissions will increase or that non-commissionable cruise fares will decrease or disappear. But I am cautiously optimistic enough to consider that we’ll still be compensated to sell cruises into the next decade.
The bad news is also fairly simple. Another economic downturn like the “Great Recession” that started in 2008, and we would be facing a glut of cruise berths. As a result of the last economic downtown, we witnessed cruise lines taking any and all measures in order to fill their berths, no matter how desperate those measures seemed. Constant fare reductions quickly taught the cruise public to wait until the last minute to get the best possible rock bottom rates. We are still trying to recover from that, re-educating clients to book early for the best rates. Cruise lines like Royal Caribbean and Celebrity have rolled out new pricing structures in the past year, in an effort to re-train passengers to book earlier in order to save. As long as the economy holds steady and berths are sailing full, the cruise lines will be more than happy to keep cruise fares strong and steady (more money in their pockets, of course). But an economic hiccup could set us back years. If bookings are lacking, they can’t afford to let ships sail empty. We could see them throw pricing structures out the window, and revert to slashing prices (and our commissions in the process) in order to attract bargain hunters.
I believe that the cruise lines have learned that budget-conscious cruisers not only look to pay less on their cruise fare, but they also are less likely to open up their wallets on board (in bars, the spa, on purchasing excursions, or in the casino). Onboard spending is a big part of the cruise line bottom line. Attracting budget-conscious cruisers may fill berths, but it may not help meet other financial targets.
So I am cautiously pessimistic when I hear that we will be seeing upwards of fifty new ships floating out of the shipyards by the end of the decade. The economy has it’s predictable ups and downs, and I’m hoping that the cruise lines have seriously taken that into account as they eagerly order so many new ships.
Susan Schaefer is the owner of Ships ‘N’ Trips Travel (www.shipsntripstravel.com) located in Tennessee, and specializes in leisure travel with a focus on group travel and charity fundraisers. Through their division Kick Butt Vacations (www.kickbuttvacations.com), she focuses on travel for 18 to 23-year-olds. Susan can be reached by email at email@example.com or by phone at (888) 221-1209.