Cruise sellers eagerly await Oasis of the Seas

Royal Caribbean's Oasis of the Seas

View our slideshow comparing renderings of the Oasis of the Seas to the progress made so far on the construction of the ship. 

This is the first in a series of reports leading up to the December launch of the Oasis of the Seas, which, at 5,400 passengers and 220,000 gross tons, will be the largest cruise ship in the world. Already, the ship has generated excitement on par with its size. In this installment, cruise editor Johanna Jainchill talks with four retailers to gauge the importance of the Oasis.

The Oasis of the Seas is less than three months shy of taking its maiden cruise from Port Everglades, Fla., as the largest cruise ship to set sail.

This happens every few years. In 2006 Royal Caribbean's Freedom of the Seas took the title from Cunard's Queen Mary 2, which claimed it only two years prior.

So if it's a quasi-regular event, why all the hype?

Rendering of Oasis of the SeaMuch of it seems to be based on timing. The Oasis and all of its 5,400 lower berths will arrive during the worst economic crisis since the Great Depression, and at a time when cruise prices have dropped to historically low levels.

I talked with four travel sellers about the significance of the Oasis; about filling the 10,000 extra weekly berths that will be added to the industry once its sister-ship debuts at the end of 2010; and the hope that the ship will be the shot in the arm the industry needs.

TW: Is the Oasis important to the cruise industry right now?

Sandy Cleary, president and owner of CruCon, Moultonborough, N.H.: Yes. Oasis is providing that light at the end of the tunnel that we all need. She will revolutionize the industry and bring incredible publicity and premium pricing that will give the entire industry a boost and hopefully allow all lines to increase their pricing.

We are fortunate to work in one of very few industries that has some good news and incredible investment coming in the next few months.

Anthony Adler, president of Cruise and Resort in Sherman Oaks, Calif.:Whenever there is something really new or revolutionary in the cruise business, there is heightened interest and ultimately increased sales. This ship fits that category because of so many of its unique features.

Evan EggersEvan Eggers,president and co-founder of SureCruise.com:The Oasis will generate a ton of national media publicity, which we know is the rising tide that raises all boats. Will Royal Caribbean be the primary beneficiary? Sure. But will the industry as a whole also benefit from the attention? Oh, yes. It will get the media talking about cruising and keep it in the public's consciousness.

Brad Anderson, co-president of America's Vacation Center:This is one of the milestones in the industry that will shake the very foundation of what the vast majority of people who have never cruised think about cruising. It will literally create a whole new group of potential customers who will say, "I've been to Las Vegas, I've been to Orlando, I've been to the beach, I've been to Mexico, now I think it's time to do this." 

TW: Does the Oasis poach business from other Royal Caribbean ships or other cruise line ships, or does it create more demand that helps fill those ships, as well?

Eggers: I don't think Oasis poaches from other brands, in that the only truly comparable ships at the moment are Royal Caribbean's Freedom class. Oasis is Freedom class on steroids. I think there will unavoidably be minor short-term yield pressure on the Freedom-class vessels, but long term, as the economy recovers, these ships will sail full at solid yields. They're unique. And you have to give Royal Caribbean credit, they're true to their adventurous brand messaging, adding features like the zip-
line.

Cleary: Since many of the lines have moved their ships out of the traditional seven-night, Eastern and Western Caribbean [itineraries] from South Florida, Oasis does not poach business as much as one may expect.

There are many people out there who are willing to pay top dollar to be one of the first on this incredible ship. For those who aren't ready to pay top dollar, they choose the Liberty of the Seas from Miami or Freedom from Port Canaveral. We need to remember that only 20% of the U.S. population has taken a cruise, and millions of people say they want to take a cruise in the next two years. There is enough business out there for all the ships.

Anthony AdlerAdler: At the beginning, it does poach from all other ships, but that evolves with time and eventually creates more demand for all of the more modern cruise ships. This is especially true now, when there are so many relatively new and exciting ships to choose from. While there are new bells and whistles on the Oasis, the other ships do not force consumers to take a big step down. For the much older ships, competing becomes more difficult in every area, so lower prices are used as the lure.

Anderson: It won't poach from the available customer pool, but because of the tremendous amount of publicity and attention that the ship is going to gain once she's in service, and once people come back and start telling their friends, associates and neighbors, it will sell at a premium, like it should.

Royal Caribbean will be the biggest beneficiary of the increased demand, even on its other ships. The entire industry will be lifted up. Every time a cruise line innovates, it seems to tap into more and more potential cruisers.

TW: Is there any chance that higher prices on the Oasis could actually help bring up prices on other ships, as well?

Adler: I doubt that will happen at the beginning, but we think it is possible for that to happen over time. When a Four Seasons opens up near other resorts, there is usually a dip in rates at the nearby resorts, but they spike back up as the novelty of something brand-new fades away. Of course, pricing is also a function of current economic conditions, so all bets are off if our economy goes in the wrong direction.

Sandy ClearyCleary: [Higher prices are] our hope. With the increased attention on the cruise industry due to the much-anticipated arrival of Oasis, we hope she will help all lines raise their pricing slightly.

The economy obviously has a great deal to do with this, but it does make the trade realize people will pay for incredible experiences even today. Word is that even with the high prices on Oasis, she is still an incredible value. So imagine what the other ships are at? They are really, really incredible values. This should create demand and ultimately allow the lines to raise prices.

TW: With the Solstice-class ships, the Oasis, the Carnival Dream, NCL's upcoming Epic -- is the industry crazy to build such huge new ships during a down economy, or is this just what it needs to increase sales?

Eggers: Lead time on [constructing] new ships is so long, no cause and effect can be assigned to all the new ships coming out this year in the midst of the recession. But I'm glad they're arriving nonetheless. From the perspective of a cruise retailer, each and every one generates excitement and offers a chance to attract someone new to a cruise vacation.

Cleary: If the cruise lines knew five years ago what they know today, they may not have been so aggressive. But having said that, the consumer demands new and innovative products. We are fortunate the cruise lines don't want to become a commodity like the airlines, so it forces them to always be innovative and different.

Adler: It is definitely not crazy to keep improving product and driving more people to take a cruise.

Brad AndersonAnderson: We're booking a ton of Oasis, and we are getting a good premium. And for good reason. This is a tough economy for any business. Sure, it would have been great for the Oasis to come out a couple years ago. But this industry has already proven that in spite of the worst [economic conditions] since the Great Depression, it still creates tremendous value. The cruise and vacation business is here to stay.

This is a major boost to the industry. In this decade we could liken this to landing a man on the moon. When that happened in '69 it was a huge morale booster. It brought in great technological changes to the products in our lives. And this ship, as it is launches at the end of this decade, is going to bring that same kind of excitement.

Obviously not as much on a global scale like the moon landing, but the innovation on this ship is likened to what NASA did with the Apollo project. It is creative beyond belief.

Correction: Oasis of the Seas is sailing out of Port Everglades, not Port Canaveral.

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