MIAMI -- Cruise executives at the Seatrade Cruise Shipping Convention here said discounting has helped the cruise market bounce back after Sept. 11, but over the long-term, the industry's growth will be fueled by consolidation.

"When you got prices down to $399, people overcame their fears. They drove, they walked, they pogo-sticked to get there," said Carnival Cruise Lines president Bob Dickinson.

He added that the temporary drop in yield was worth the discounting.

"It's well-reported the hotel industry was very leery of taking prices down and affecting their yields. It's imperative from a marketing standpoint to fill every berth, to get people on a cruise, because we know once they try it, they'll come back."

Also contributing to a decline in yield was the redeployment of ships from Europe to markets like the Caribbean, which had a "significant impact," said Royal Caribbean president Jack Williams.

"We look forward to building our European product back in 2003," he said.

But the cruise lines' strategies apparently worked. Norwegian Cruise Lines president and chief executive Colin Veitch said, "Recovery has been much faster than most of us, perhaps all of us, would have expected in September or October."

The three executives were among six cruise heavyweights participating in the convention's annual state of the industry debate.

Because several of the cruise chiefs were directly involved in the P&O Princess merger/takeover battle, talk quickly turned toward consolidation.

Howard Frank, vice chairman of Carnival Corp., said industry consolidation gives cruise lines access to more capital, which is needed to grow and expand the product, and provides economies of scale that keep costs lower.

"I don't think the industry would have grown without consolidation," he said.

P&O Princess chief executive Peter Ratcliffe and Royal Caribbean's Jack Williams reaffirmed their commitment to merge.

Frank, whose company is a rival suitor for P&O Princess, played down the sometimes acrimonious nature of the takeover battle.

"This [merger] is kind of a moment-in-time situation that I think will fade quickly," he said. "Even during this period of time, I see us working together closely on common industry issues."

NCL's Veitch rebuffed a suggestion that his line was considering partnering with the company that loses the merger battle for P&O Princess.

Dickinson pushes rivals to reveal direct bookings

By Rebecca Tobin

MIAMI -- Carnival Cruise Lines president Bob Dickinson challenged cruise executives at the Seatrade Cruise Shipping Convention here to disclose the percentage of direct bookings they get.

At Carnival, Dickinson said 8% of the bookings are direct.

Other cruise lines then chimed in: Princess Cruises has about 5%, Royal Caribbean has about 4% and Crystal Cruises is between 1% and 2%.

Following the debate, Norwegian Cruise Lines representatives said NCL's direct booking percentage is 5%, revising a 9% figure originally given by chief executive Colin Veitch.

Dickinson said, "I think everyone would agree we love the travel agent," but he added that direct bookings are a necessity because cruise lines compete with land-based resorts and hotels, all of which have direct-booking outlets.

"Carnival is honest, and we say we have initiatives toward direct booking," he said.


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