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