State of the Cruice industry

Based on third quarter 2009 results and fourth quarter estimates, we are forecasting that a record 13.445 million passengers cruised in 2009, an increase of 440,000 guests over 2008, with 10.29 million originating in North America. Coupled with an annual occupancy percentage that exceeded 104% in 2009, this 3.4% annual passenger growth for 2009 shows an industry where demand continues to outstrip supply, even in the harshest economic environments.

In 2009 alone, fourteen new ships debuted, from AMA Waterways, Avalon Waterways, Carnival, Celebrity,Costa, MSC Cruises, Royal Caribbean International, Seabourn, Silversea Cruises and Uniworld with guestcapacities ranging from 82 to 5,400 passengers, sailed the world’s waters for the first time. The industry’s growth is headlined by the Caribbean, which continues to rank as the dominant cruise destination, accounting for 37.02% of all itinerariesin 2009,versus 37.25% in 2008, 41.02% in 2007 and 46.69% in 2006. Despite the decrease in capacity, passenger numbers have continued to increase for the Caribbean to record numbers. In 2010, the growth of the cruise industry continues as we enter an era distinguished by twelve additional innovative, feature-rich ships, international ports-of-call and convenient departures from proximal embarkation cities. The current cruise ship order book extends from 2010 through 2012 and now includes 26 new builds (23 ocean-going vessels and 3 European cruise riverboats), with 54,000 berths at a value of nearly $15 billion. The selling environment in 2010 is likely to remain challenging for all providers of goods and services, including travel, due to the global economic environment. Recent signs of recovery are welcome and should improve the overall sales climate. Cautious optimism is the forecast for 2010 following a year whereby the cruise industry performed admirably despite difficult market conditions. Based on known ship additions and deletions in 2010, the industry forecasts 14.3 million guests in 2010, a 6.3% increase over 2009.Today’s ships offer a new generation of onboard features and a world of innovation, including surf pools, planetariums, on-deck LED movie screens, golf simulators, water parks, demonstration kitchens, self-leveling billiard tables, multi-room villas with private pools and in-suite Jacuzzis, ice-skating rinks, rock-climbing walls, bungeetrampolines and much more. Today’s new ships also offer facilities to accommodate family members of all generations traveling together, a market that is ideally suited for Caribbean cruising. More than 1.6 million children under the age of 18 sailed with their families in 2009.