This year's Wave season looks strong for lines, agents

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NEW YORK -- Early results suggest that this year's Wave season -- traditionally cruising's heaviest booking period -- is breaking favorably for cruise operators.

At least one major cruise line already has set a booking record during the Wave period, and cruise sellers around the country are reporting heavy call volumes.

Cruise analysts say improved pricing strategies have positioned suppliers for a strong 2001 Wave period after a disappointing season last year.

January's success stories include Carnival Cruise Lines. As previously reported, Carnival in the first weeks of the month set two booking records that eclipsed the previous one-week high set last February.

Carnival booked 47,921 individual passengers on a net basis (bookings received minus the number of cancellations during the same period) from Jan. 2 to 7 and 52,334 net-basis passengers from Jan. 8 to 14.

Early returns indicate strong bookings for cruising's Wave season. Those figures represent 14% and 25% increases, respectively, over the previous high of 41,899 passengers booked on Feb. 7 to 13, 2000.

In fact, the record totals were produced over a shorter booking cycle.

The first week of January 2001 was a six-day week because New Year's fell on a Monday.

Both the comparable week in 2000 and the previous record week of Feb. 7 to 13, 2000, were seven-day weeks.

Also, Carnival's 2001 fleet capacity is 11.4% higher than during the same period in 2000. Thus far, the line has booked 28% more passengers than during the same period in 2000.

"It is encouraging to consider that we are still in the middle of January, and the cruise industry's historical booking wave does not normally peak until several weeks down the road," said Bob Dickinson, Carnival's president.

To date, cruising's other major lines have yet to report Wave-season booking numbers.

Cruise passenger growth climbed 15% in the first three quarters of 2000, according to the Cruise Lines International Association. At press time, Royal Caribbean Cruises was in a "quiet period" while preparing fourth-quarter 2000 results and would not comment on booking totals.

A Princess Cruises spokeswoman said, "Bookings are solid, and we are pleased with the way they are proceeding at this point," but declined to give details.

Officials at Norwegian Cruise Line said Wave period booking information was not yet available.

But several cruise-selling agents around the country are reporting high call volumes and solid booking totals.

"If the last few weeks are any indication, it's going to be a good year," said Mike Wild, vice president of cruise marketing at Travelbyus, a 2,200-member consortium.

Added Charlie Funk, owner of Just Cruisin' in Nashville, "We've had a heavier call volume than last year, and bookings are up about 25%."

The positive early results are an encouraging trend for the cruise industry.

Wave season, generally regarded as the period from Jan. 1 to March 31, is widely viewed as an portent of the year's booking pattern. A strong Wave period is considered the precursor to a successful 12 months, particularly for mass-market and premium lines.

The positive early results are particularly welcome this year, as cruise fleets continue to grow at an unprecedented pace.

Cruise capacity is expected to climb by about 8% this year, according to Cruise Lines Industry Association president Jim Godsman, led by cruising's "Big 3" (Carnival Corp., Royal Caribbean and P&O Princess Cruises), which collectively will introduce six ships in 2001, representing 12,612 berths.

First European Cruises, Norwegian Cruise Line, Radisson Seven Seas Cruises, Renaissance Cruises, Royal Olympic Cruises and Silversea Cruises also will introduce ships in 2001.

This year's early Wave-season success is due in part to new pricing strategies, according to cruise analysts.

"We believe the major operators are much better positioned vs. a year ago," said Scott Barry, a cruise analyst at Credit Suisse First Boston.

Barry said last-minute discounts to fill weak sailings were prevalent last year, actions which "degraded the integrity of pricing in the marketplace," cutting profits for operators and cruise retailers.

Retailers confirmed Barry's analysis.

"Last year, our passenger count was up, but our sales volume was down," said Funk of Just Cruisin'.

To avoid the same phenomenon in 2001, "the major cruise operators took pricing lower last year to pull even with the demand curve, opened 2001 sailings earlier than ever and attempted to build a strong base of business prior to the Wave season," said Barry.

Funk agreed. "The pricing is firmer this year," he said.

"We indicated in the latter part of 2000 that it appeared our pricing had bottomed out," said Dickinson of Carnival. "And we were approaching the new year with a very realistic and attractive pricing structure.

"It looks as if consumers have gotten the message on cruising's phenomenal value," Dickinson added.

Indeed, cruise passenger growth remains strong despite the influx of new berths. Although complete-year figures aren't yet available, CLIA's Godsman said the figure should be close to 6.9 million.

Officially, passenger embarkations grew 15.7% during the first three quarters of 2000, said Godsman, who added, "Passenger growth should parallel capacity growth in 2001."

"The fact that volume growth continues to outpace capacity growth is a testament to the cruise product's elasticity," said Barry, "and an encouraging sign that a normalized booking curve can be reestablished this year."

Two factors are driving the heavy Wave-season activity, said Barry.

One is the harsh winter weather that gripped the East Coast and Midwest in early 2001. The second, he said, is "increased consumer and travel agent awareness of the cruise product's strong value proposition."

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