| By Paul Motter
March is the month for the annual "Cruise Shipping Miami" convention formerly known as Seatrade, and the 2011 conference just wrapped up last week. This is the most popular cruise industry event of the year with large discussion panels and smaller "breakout sessions." An additional highlight of the show is two full showrooms of suppliers to the cruise industry for everything from environmentally-friendly toilet paper to caviar and truffles.
I have attended Seatrade, off and on, since 1998, and have watched cruising evolve over the years. I recall a young and giddy industry about to be legitimized by the entrance of Disney - a major entertainment company. Now it is a mature industry with real-world problems, such as fuel shortages and political turmoil in faraway places affecting the bottom line.
Some years have been better than others. In 2000 the sole topic was the Internet; but by 2002 that was old news. 2005 was an exciting year - featuring new ship designs like the Solstice class and even the Genesis Project - which became Oasis of the Seas. Oceania's Marina was first announced as far back as 2005.
2008 was not so good - the industry had been rocked by an unusual amount of bad publicity because of rogue waves, collisions and congressional hearings about supposed crime on cruise ships. But in retrospect 2008 was one of the last good years before the current economic meltdown, which has loomed large over the entire industry ever since.
I believe the cruise industry has reached something of a crest this year. There were few groundbreaking new-build announcements with the exception of four spanking new river boats for Viking River cruises in Europe. The entire generation of new cruise ship designs we saw announced in and around 2005 are now actually in service - which leads to the most amazing statistic for me this year; 16,000,000 individual cruise vacations will be taken in 2011 by Cruise Lines International Association (CLIA) ships.
One concern this year is the rising cost of fuel. Next is a new set of laws from the International Maritime Organization that will create a 200 mile buffer zone around the United States and Canada where cruise ships cannot burn bunker fuel - the fuel for which their engines are designed. The law will require them to use a more expensive but cleaner burning fuel.
Although cleaner air is certainly a good thing - fuel prices were already creeping higher for other reasons, now add in the cost of this new fuel requirement and cruise prices could go dramatically higher. In addition, look for cruise lines to reposition ships to ports where they can escape the zone more quickly.
While the law will apply to all kinds of vessels, the cruise industry gets hit especially hard because cruise ships spend far more time within the 200 mile limit. Cruises to Alaska from Seattle, for example, hug the coastline for thousands of miles.
For some reason, the clean fuel zone is shorter in Southern Florida - probably because the nearby Bahamian archipelago, which includes hundreds of islands between Fort Lauderdale and Puerto Rico, takes precedence. Galveston, Texas, currently enjoying its status as one the most popular cruise ports in the nation, might soon see competition from port facilities developing in Brownsville, the most southerly point on the Texas coast - right next to Mexico.
Naturally, everyone agrees that cleaner air is a good thing - but it comes with a price. Mobile, Alabama, was dealt a surprise blow last month when Carnival announced it will stop cruising from the city before 2012, saying it was unable to raise fares enough to cover the new fuel requirements. Rising fuel costs will also compel some cruise lines to drop more distant ports of call. The island of Barbados - located near the end of the Caribbean chain, is expecting a significant slowdown in cruise ship visits starting in 2012.
You can comment on the new fuel laws in our forum: ECA Mandates Cleaner Fuel for Cruise Ships.
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