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Power of Customers

Today's cruise vacationers have many different lines to choose from, each offering a slightly different spin on cruising. Most cruise lines target middle class vacationers with the grand ocean liner experience not found in decades. Many first time cruisers are lured in by moderately priced air and cruise package rates. Often one can buy a cruise vacation anywhere form $125-$250 per person, per night. Most hotel stays in major cities are more expensive per night, not including transportation as well as food. Along with low priced package rates, consumers are also demanding a unique vacation experience. Gone are the days when shuffleboard-playing grannies were the mainstay of the cruise industry. Now cruises appeal to a younger, hipper audience, and it's easy to see why. Modern cruise ships are "floating resorts," offering everything from state-of-the-art spas and gyms to in-line skating and Rock-climbing walls. Cruising is the fastest-growing segment of the travel industry, with 7.5 million people worldwide having set sail last year. Fifteen new ships will join the North American fleets in 2002, more than in any previous year. The cruise industry hopes the boost in capacity, plus the modern amenities of the newer ships, will attract the 87 percent of the population that has never taken a cruise. The price is tough to beat. Hard hit by September 11, many cruise lines slashed fares considerably last fall and winter. Prices have bounced back somewhat, but you can still find fares at less than $100 per day per person--not bad, considering the price includes a room, all meals, activities and entertainment (except gambling, specialty restaurants and--on most ships--alcohol). Many cruise lines have also responded to September 11 by redeploying ships closer to home. In America, travelers can depart from more cities than ever before--including small ones like Galveston, Texas, and Mobile, Alabama. Ships also stop at more ports, with over 1,800 destinations worldwide to choose from, according to the Cruise Lines International Association (CLIA). This year's top destinations will be the Caribbean and the Bahamas, Europe, the Mediterranean and Alaska. What's the allure? Many people cruise simply to "check out" a destination for a future visit, according to the CLIA. Click on the following link to visit their website.

For example, Hawaiian inter island cruises allow passengers to sample each island so they can scope out favorite sites. Other cruises, such as those bound for Alaska, are famous for their onboard educational features. Sail the popular Inside Passage and Gulf of Alaska routes, and you'll encounter naturalists, historians and park rangers' onboard, teaching passengers about the region's stunning glaciers, fjords and wildlife. The industry has also gone overboard on themed cruises, where passengers can sail away on a murder-mystery tour or enjoy a film festival at sea. There are classical-music cruises, wine-tasting cruises and culinary festivals featuring world-renowned chefs. The venerable Queen Elizabeth 2 is offering a "Spotlight Series" on each of its 21 transatlantic crossings this year, with themes ranging from "British Comedy" to "Great Authors." There's even a "Family Entertainment" cruise in July, in which junior cruisers will be invited to perform scenes from "The Jungle Book" with the London Festival Players. The best--or at least the biggest--is yet to come. Next year Cunard will introduce the world's largest cruise ship, the Queen Mary 2. Its 2,620 passengers will enjoy a spa managed by the prestigious Canyon Ranch of Arizona, the only planetarium at sea, interactive TVs, a grand staircase and a three-story dining room. Says Cunard Line president Pam Conover," We will certainly put significant focus on having family facilities, so we will attract people who want to travel with their children. We're determined to show that cruising has something for everybody." Whether your taste runs to henna, heli-skiing or highballs. 99% of cruise vacationers choose to book their trip though a travel agent. Click on the links below to view websites that can help you plan your next or even first cruise vacation.

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Many highly trained and specialized employees depend upon the cruise industry for their livelihood, from the world class chefs to the stewards; cruise staffs pride themselves on providing a world class ocean liner experience to all of their passengers. Just as dependent

on the cruise industry are the vendors who rely upon the massive consumption that takes place aboard the cruise ships, ensuring an endless request for more consumables. On its own, Carnival is the largest and most profitable player in the industry. In its most recent quarter, it posted a 34% operating margin, topping Royal's 23%, according to McMullin. Carnival is particularly known for controlling costs. "You're dealing with the Wal-Mart of the cruise business, and they're going to attract the best prices," he says. What's more, business is getting better industry wide. Pricing has firmed up following its decline after the Sept. 11 terrorist attacks last year. And bookings in general look solid, according to the companies. Carnival Chief Operating Officer Howard Frank said during a conference call last month: "In terms of our prospects for 2003, we feel quite