Travel Weekly's Cruise E-Letter: February 4, 2003

AGENT REACTION was overwhelmingly positive to Norwegian Cruise Line's decision to pay 10% on the noncommissionable portion of the cruise fares to agencies that double their business -- and to continue paying 10% commission on air to those agencies. Several agents said NCL was being "innovative" with the plan, and Scott Keopf, vice president of the Cruise & Vacation Specialists consortium said it was an "interesting take ... rather than just a bonus commission." Still, many pointed out that agents who don't double their sailed passenger numbers (or increase those numbers by 85% if they're a high-volume producer) will see their air pay drop to 5% after Feb. 28, a move that NCL has avoided for more than a year. Once agents hit the incentive target, the commission is retroactive to bookings made in 2003 and available on all future 2003 bookings.

PASSENGERS on the Sun Princess are reporting symptoms of what is suspected to be a Norwalk-like virus. Since the ship departed Los Angeles Jan. 25 for a round-trip Hawaii cruise, about 229 passengers -- about 11% -- and 26 crew reported to the ship's infirmary with gastrointestinal illness. Princess said it is working closely with the Centers for Disease Control and stepped up its onboard cleaning, which it said includes "sanitation of every aspect of the ship." Passengers with symptoms are not being allowed on shore excursions in Hawaii; Princess said those passengers will receive full refunds on those tours.

CRUISE ANALYSTS are giving mixed reviews to this year's Wave season, a period of typically high-volume sales. Booking rates for the Wave period so far have equaled or slightly exceeded the comparable 2001 timeframe, Tim Conder of A.G. Edwards said in a research note, but "greater than expected" seasonal price erosion also is taking place. Jason Ader, a Bear Stearns analyst, added: "The booking pattern remains close-in, perhaps decreasing, if only slightly, the significance of Wave season relative to historical patterns."

ROYAL CARIBBEAN CRUISES president Jack Williams echoed that sentiment, saying that although Wave is still "very, very" important, its use as a gauge of the year has diminished a bit. For RCCL, bookings made 90 days or closer to the sail-date increased to 40% in 2002 from 31% in 2000, the company said. Wave season bookings for the line were slower than expected and a softer booking trend has been under way since about December, the line said. CEO Richard Fain attributed the slowdown to Norwalk-like virus reports, fear of conflict with Iraq and the economic downturn. Still, the company added, a strong booking period through November 2002 will help keep first-quarter yields buoyant, likely raising them 2% to 4% year-over-year.

BREAKING UP is hard to do, but Royal Caribbean Cruises Ltd. picked up a $33 million termination fee tied to its thwarted combination with P&O Princess. The fee contributed to RCCL's reported net income of $351.3 million for 2002, a 38% increase over 2001. Revenue for the year was up 9.2%. For fourth-quarter 2002, Royal Caribbean recorded earnings of $38.3 million, compared with a net loss of $39 million during fourth-quarter 2001.

TWO CRUISE LINES, we hear, are trying to ensure that it's not just Norwegian Cruise Line that gets to sail interisland cruises in the 50th state. Holland America Line and, according to reports, Princess Cruises, are pushing to introduce an amendment to the 2003 appropriations bill that contains a provision to allow NCL to operate up to three interisland cruises in Hawaii. The amendment would allow up to five foreign-built ships from various lines, plus one of NCL's Project America ships, to operate the interisland sailings.

CELEBRITY CRUISES cancelled two Hawaii sailings on the Infinity because of propulsion problems. The line will send the Infinity into dry-dock and replace ball-bearing units in the ship's propulsion system; the Feb. 2 and Feb. 13 sailings are affected. This is the third time the Infinity has entered unscheduled dry-dock because of ball- bearing problems, noted Robin Farley, an analyst with UBS Warburg.

WINDJAMMER BAREFOOT CRUISES said its 72-passenger Mandalay will homeport in Colon, Panama, this summer, the first regularly scheduled Windjammer cruises from that port. The ship will sail to the San Blas islands off the coast of Panama between June 9 and Sept. 15.

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