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Old March 16th, 2010, 12:41 PM
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We just finished the "state of the Industry" forum with Gerry Cahill (CEO Carnival), Adam Goldstein (Royal Caribbean) Kevin Sheehan (NCL), Stein Kruse (HAL) Dan Hanrahan (Celebrity) and Rick Sasso (MSC Cruises USA).

One thing I just learned is that Costa will have just one ship in the Caribbean this summer, and it will mostly be marketed to Europeans. That means they are closing down many of their US operations. This is also somewhat good news for MSC Cruises who will continue to have a heavier Caribbean presence.

Of discussion was the sudden rash of new ship orders starting with the third ship in the Carnival Dream class ordered last month. This was followed by a new order by MSC and then the announcement of a new MSC Cruises ship.

Generally, the consensus was that ship building will be slower for a few years, at least until the economy recovers. Right now the focus is on refurbishing older ships, such as the Fantasy Class of Carnival, the ongoing Signature of Excellence of HAL and a new program called Solsticization by Celebrity.

Kevin Sheehan, the new CEO of NCL (replacing Colin Veithch) has brought NCL into profitability for the first time in may years. Of course it helps that EPIC is now officially on sale. It also helps that Hawaii has picked up substantially as a destination and NCL has the franchise to sail there.

As for economic recovery, Stein Cruse of HAL said "never underestimate the American consumer."

On a note, I want to point out the the recovery has so far been much limited to the stock market, therefore it is the upper income people who are felling this recovery more than lower income people.

Many things went wrong last year, but one thing that went right (in a sense) was that H1N1 did not turn out to be the disaster many people (including the WHO and several stock market analysts) predicted it would be. The cruise lines do not seem to be bitter that they were essentially forced out of Mexico for what turned out to be something of a false alarm, but only because it could have been worse.

Dan Hanrahan raked the governor of Alaska over the coals for that states restricting legislation. He said "there will be fewer ships there in 2010 and even fewer in 2011, the question is 2012 and 2013. There is a head tax, regulations that re ridiculous and local port fees as well. Currently we cannot bring on water in Alaska because if we discharged the same water they were giving us we would be violating their ecological limits." He added "some $200 in taxes have been collected, and so far they don't even know where to spend over $120,000,000 of it." (the taxes are limited to being spent on projects that benefit the cruise & tourism industry.)

So, it isn't just the head tax, it is other fees as well.

While Royal Caribbean showed a big focus on new markets in Asia, India and South America, Carnival CEO responded "are those places in the Caribbean?" The point is that "Carnival wants to focus on the local consumer. They are concerned about airfare and other expenses, and we prefer to develop new destinations in the Caribbean than wait out new markets.

To be fair - RCL (Goldstein) said such world markets are perhaps 6 to 10 years away from fruition. But he said Asia may represent the biggest opportunity in the world ever. With 1.4 billion people in China and 100 million landlocked Japanese on a small island it seems plausible to me.

Stein Kruse (HAL) said "we are already visiting 300 ports around the world. We see plenty of opportunities out there. NCL is still largely focused just on the US however, although their fleet is smaller, plus they already have an Asian partner (star Cruises, Malaysia).

Hanrahan praised the newer ships like Oasis, and said "the biggest benefactor of all the pre-release doubt that surrounded Oasis will probably be Norwegian Epic. He also said "please let us know who that single cabin thing works out."

More later....
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