Cruise lines expect smooth seas ahead, despite rough economy

Gas prices are leaping toward $4 a gallon, food prices are soaring, the economy is in a tailspin and families are cutting back expenses to weather the crisis.

All that might seem to spell a gloomy forecast for the travel and vacation industry, but at least one segment, cruise lines, says it expects to weather the current choppy economic seas without major disruptions.

"No segment of the travel industry is recession-proof, but cruising has proven in the past to be somewhat recession-resistant," said Bob Sharak of the Cruise Lines International Association, a trade group. While not exactly bullish, cruise lines say they are on track to continue their impressive record of growth in 2008, and expect to take 12.8 million customers to sea, a slight increase from the 12.6 million boarded in 2007.

Those numbers are almost rosy, as other segments of the travel industry brace for a downturn due to crimped budgets and high gas prices.

Gas prices are a big part of the equation, as cash-strapped families are forced to cut back. Still, some in the industry say many Americans are adamant about not cutting out hard-earned vacations, although they may scale back ambitious plans, stick closer to home and scour the Internet looking for bargains.

Cruise lines say the value question works in their favor. "In times like these, people will still take their vacations, but they may trade down to a trip for less money," said Howard Frank, vice-chairman of Carnival Corp. "That's what cruises are all about: value. Overall our bookings are holding up quite well."

One component of the current economic downturn — the falling value of the U.S. dollar against other currencies — may actually be helping cruise lines. Europe is a hot destination for cruisers this year, likely because the falling U.S. dollar makes a land-based trip to Europe expensive.

"If you want to go to Europe and take a cruise, you pay for your lodging, most of your food and your transportation between locations in U.S. dollars," Sharak said.

Cruises from U.S. ports, including Seattle and especially ports in Florida and Southern California, also are highly popular.

Since 1980, the number of cruise passengers has grown steadily, averaging about 7 percent a year, a record that includes weathering a number of other past economic downturns, as well as the drop in travel after the 2001 terrorist attacks.

Last year the industry enjoyed another solid performance, sailing at 105 percent capacity, a figure made possible because capacity is rated at two people per stateroom, and many families often bring along kids who stay in the room with them.

The industry has responded to its steady growth by building new, often-larger ships and adding activities, entertainment and better dining options. Cruise lines have also focused on the family market, hiring counselors who run daylong activities for kids.

Major cruise lines — the 23 that belong to CLIA — plan to add 36 new ships over the next four years, with eight of those coming on-line this year, Sharak said.

Disney, which has been sailing two ships from Central Florida's Port Canaveral — less than an hour's drive from the company's Orlando theme parks — is doubling its fleet to four, with the two new, 4,000-passenger capacity ships scheduled to put to sea in 2011 and 2012. The cruise lines, have, of course, been hit with the same rising fuel prices that have put the pinch on consumers and other segments of the travel industry. Most lines have responded with fuel surcharges (up to $8 per passenger per day, although with some caps and reductions for a third or fourth passenger in a cabin.)

Kristin Jackson of The Seattle Times Travel staff

contributed to this report.