Rough seas ahead for cruise industry?

— The cruise industry grew in 2007 and the first half of 2008, but U.S. consumers' spending cuts and the global economic downturn are creating rougher seas ahead, says a new report.

The Cruise Lines International Association said that about 12.6 million passengers took cruises worldwide in 2007, a 4.7 percent increase over 2006. In the first half of 2008, the industry saw a 5.4 percent increase in passengers.

"We are still cautiously optimistic that we will meet the forecast that we set at the beginning of this year of carrying 12.8 million passengers," CLIA President and Chief Executive Terry Dale said Wednesday.

Despite showing growth, the report contained signs of headwinds already in the first half of the year. Tourists from overseas accounted for nearly all the passenger increase, surging 31 percent, for instance.

"As an industry, we're becoming more global," Dale said.

The report, the 2007 CLIA Economic Impact Study, said passengers from North America increased by less than 1 percent, as soaring fuel costs, reduced airline capacity, a dismal housing market, rising unemployment and a credit crunch led many Americans to cut back on leisure travel, according to the report.

In 1995, roughly 11 percent of passengers on CLIA members cruises came from outside North America. This year to date, overseas passengers represent more than 20 percent of cruise passengers.

Global demand may be slipping, however. In a note to investors last week, Stifel Nicolaus & Co. analyst Steven Wieczynski said travel agents suggest European demand is slowing. Europe has been hurt by a softening economy and a strengthening U.S. dollar.