Demand for Alaska cruises may be weakening compared to last year, with 38% of travel agents saying that demand is down, according to a survey conducted by Bank of America analysts.

Bank of America leisure analyst Michael Savner wrote in a March survey of travel agents nationwide that results indicated that there is softer demand for Alaska cruises compared to the same time last year.

According to the results, 39% of agents said the Alaska demand was stable, 23% said it was stronger, and the rest (38%) said it was slowing. Additionally, when asked which cruise region was strongest this year compared to last during Wave season, only 16% of agents chose Alaska, a decrease from 33% in February.

"Alaska is showing signs of weakness," Savner wrote. "Partially offsetting a potential softening in Alaska is continued strength in Europe."

Fifty percent of agents said that Europe has experienced the strongest bookings over last year, and 31% chose the Caribbean.

"Given that the Caribbean accounts for roughly 50% of cruse deployment, we believe this helps confirm the weakness in the region, and the relative out-performance of Europe and Alaska," Savner said.

He added that Caribbean pricing continues to be soft and the booking curve has shortened. He said that while he expects yield increases in the second half of this year, there are signs that the second quarter could be weaker than expected.

"We note that most major carriers have increased promotions recently, which has helped accelerate booking volume but not pricing." he wrote. "We believe the spike in demand seen by [Carnival Cruise Lines] has been led by price promotions more than anything. On a positive note, our most recent checks indicate pricing improvement for itineraries in the latter part of the year."

Based on the pricing weakness and recent fuel price increases, Savner said BofA was slightly lowering its estimates for Carnival and Royal Caribbean shares, but maintaining its "Buy" ratings for both.

To contact reporter Johanna Jainchill, send e-mail to [email protected].

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