Cruise sellers emerged from the first half of 2016 with
about the same level of business, or slightly more, than they had a year
earlier. But many said last week that the outcome for the rest of the year was
anything but certain given continued terrorist attacks and Britain’s vote to
leave the EU.
“From January until now, it’s been kind of a roller
coaster ride, a little bit bumpy,” said Bud Smead, owner of Holiday Cruises and
Tours, in Arvada, Colo., outside of Denver. “We’ll have really strong sales for
a month or two, and then something happens, like a terrorist attack in Brussels
and things like that. That slows down bookings considerably.”
It was a similar story at Expedia CruiseShipCenters,
which has 220 outlets in the U.S. and Canada.
“I wouldn’t say it’s been consistent, but I would say
we’re pleased with the results,” said president Matthew Eichhorst. “We’re up
overall.” Eichhorst said the improvement over the 2015 first half came despite
significant foreign-exchange headwinds for the 156 franchises in Canada.
“We had a nearly 30% swing over the last 18 months,” he
said. “The Canadian market definitely had some pressures.”
Sales have been supported by strong demand for
destinations in or close to North America, such as the Caribbean and Alaska.
Carnival Corp., which reported first-half results on June 28, saw ticket yields
rise a better-than-forecasted 3.5%, driven by those two regions, chief
financial officer David Bernstein said.
Many agents had good sales in early 2015, so significant
improvement is hard to achieve.
“Truthfully, we are almost identical last year to this
year,” mostly on the strength of mass-market cruises to the Caribbean, said Amy
Hobbins, owner of Journeys Unlimited in Green Bay, Wis.
Hobbins said her river cruise numbers would probably
decline because of low water levels and terrorism in Europe.
“It’s the perception of terrorism that might be holding
those people back,” Hobbins said. “We do not have a big group on the books for
next year because of that.”
Several larger cruise sellers said they anticipated that
the cruise lines will offer deals in the third quarter because of such
If they do, it will run somewhat counter to what they’ve
been trying to achieve for the past year or more: stronger early bookings that
leave fewer cabins to sell close to sailing.
Carnival, which was the first of the major cruise
companies to report second-quarter results, said that since March, bookings for
the remainder of the year are fetching higher prices, with less inventory
remaining for sale than at the same time last year.
“The fact that we are well ahead on the book position
with less inventory left to sell for the remainder of the year compared to last
year, even with our capacity increase, bodes well for pricing over the next few
months,” Carnival Corp. CEO Arnold Donald said in a conference call.
The biggest X factor is the upswing in terrorist events
in Europe, such as last week’s bombing in Istanbul, which tend to paralyze
Smead said such events produced not cancellations so much
as a dead zone for new business.
“We just don’t get new bookings, new interest,” he said.
At Expedia, Eichhorst said hesitation began as early as
last summer when Greece found itself overrun with refugees.
“We definitely saw that in the sales, and then we saw at
the end of December some pressure from Paris and then the same thing from
Brussels, so there were dips in the market,” Eichhorst said. “When I look at
this first half, you’d have a good month, and then a soft month and another
good one. It was kind of lumpy.”
Other agents also reported that business has been
“Last night, I booked four cabins, and I didn’t even make
$200,” said Laurie Hristov, of Just Cruises & Tours of Delray Beach, Fla.
On the other hand, Hristov said one of her oldest clients recently booked a
$32,000 trip to Europe.
Rob Clabbers, president of Q Cruise + Travel, a Virtuoso
agency, said he had a good first half.
“We had a couple of weeks [in mid-February] where it was
a bit slower than last year,” he said. “Overall, for the first six months, we
are ahead of where we were the same time last year in terms of new bookings.”
At Cruise.com, president Anthony Hamawy said, “Overall,
it’s been a good market through the summer. Alaska looks like it’s doing well.
Hawaii looks like it’s doing well. Australia looks like it’s doing well. Even
on the West Coast of the U.S., the Mexican Baja for those lines that service
it, they seem to be doing OK.”
Where weakness is being felt is in booking lines that
have more European exposure, Hamawy said, citing Celebrity Cruises and MSC
Cruises as examples. He said the cruise lines did a good job in the second half
of last year filling cabins for 2016, but he was concerned about third-quarter
“When they turned the year, it was a lot easier to hold
the line on Q1 and Q2 pricing when a chunk of business is already on the
books,” Hamawy said. “Now, you’re going into Q3 and beyond, and it’s a
different story. There’s more inventory to deal with that doesn’t necessarily
sell well in advance. Unless you’re dealing with Europe. And Europe, because of
the other factors, didn’t sell as well early either.”
An offsetting factor will be the first North American
arrival in November of new ships such as Holland America Line’s Koningsdam and
Royal Caribbean International’s Harmony of the Seas, events that tend to push
people who might be waiting for a deal off the fence.
“They see something like that come out and it excites
them to go cruising,” Hamawy said.
Expedia’s Eichhorst said he, too, thinks that cruise
lines will be offering second-half deals despite their success in filling ships
He said Britain’s unexpected vote to leave the European
Union has left everyone a little flummoxed, and there’s a lot of confusion
about its economic consequences that won’t be resolved quickly.
“I think Europe is going to have a bit of a stall because
consumers don’t understand what’s happening, nor does anybody,” Eichhorst said.
“There’s some great uncertainty. I think you’ll see deals all the way through