Travel Weekly's Cruise E-Letter: October 15, 2002

A NEW CRUISE LINE, using former Renaissance Cruises ships, is being launched by Frank Del Rio, former CEO of Renaissance, and former Crystal Cruises president Joe Watters. The new line, to be called Oceana Cruises, will offer an "upper premium" cruise experience, according to a statement from Del Rio. The new company has reached a deal with Cruiseinvest, the current owner of the remaining Renaissance ships, for a long-term charter agreement with purchase options for up to three of the Renaissance vessels. Watters will be chairman of Oceana Cruises and head the line's West Coast office in Los Angeles; Del Rio will be president and CEO and be headquartered in Miami.

RADISSON SEVEN SEAS Cruises canceled its winter South America program on the Song of Flower. The voyages affected are those scheduled starting Nov. 3; the ship will resume service April 21. No replacement itineraries are planned. The Song of Flower, originally scheduled to sail in Asia, was to redeploy from the Mediterranean to South America, but bookings just didn't materialize, a representative of the line said. Guests booked on the sailing get a full refund, plus a $1,000 credit; agent commissions will be protected.

THE CRUISE INDUSTRY contributed $20 billion to the U.S. economy last year, a $2 billion increase compared with 2000 and the industry's largest contribution ever, according to the Int'l Council of Cruise Lines. ICCL said the industry increased its global passenger carryings by 5%, to 8.4 million passengers. Direct spending by the lines and their passengers increased 6%, to $11 billion. In addition, the core cruise industry was responsible for creating 69,000 jobs in the U.S., in such fields as advertising, retail trade, health services, construction and lodging. The analysis was conducted by Business Research and Economic Advisors.

EXPECT A NEW DELIVERY date for Princess Cruises' Diamond Princess, which was damaged by fire at its Japanese shipyard Oct. 1. The vessel was to be turned over to Princess next May, but the cruise line last Thursday canceled all of its sailings through February 2004. Princess said it would take the Mitsubishi Heavy Industries shipyard several weeks to determine the extent of the damage and set a revised delivery date. Meanwhile, passengers booked to sail on the Diamond Princess in Alaska next summer will be moved to the same cabin category on sister-ship Star Princess, which offers a virtually identical itinerary. Passengers booked on the ship's Mexico sailings next autumn will receive a full refund, plus a $25 credit if they rebook.

P&O PRINCESS CRUISES updated its 2002 profit forecast, saying it expects earnings to be at the "top end or above" analysts' predictions. The company said Princess Cruises is 25% booked for 2003. The pace shows "remarkable resilience in the face of the continuing economic and political uncertainty"--with the exception, it said, of slower bookings for the two Grand-class ships Princess has scheduled for Mediterranean sailings next summer. Pricing is slightly below pre-Sept. 11 levels, the company said. The U.K. Takeover Panel required the London-based company to release an updated forecast after the FTC ruled last week that both Carnival Corp. and Royal Caribbean are free to pursue their respective merger plans for P&O Princess.

PRINCESS CEO Peter Ratcliffe, meanwhile, told analysts last Tuesday he was "clearly not in a position" yet to recommend a deal with Carnival Corp., whether it be a dual-listed company structure, a cash-and-shares offer or some combination thereof. The two companies are to begin talks this week. Ratcliffe said about half of P&O Princess shareholders would either not be able or wouldn't want to hold U.S. stock, which is what Carnival currently is offering. "I hasten to add that we have a contract with Royal Caribbean that says we can generate significant value," he said.

ROYAL CARIBBEAN Cruises Ltd., meanwhile, said its third-quarter earnings are expected to surpass analysts' estimates, a result of an "improved revenue environment" and higher-than-anticipated cost savings. Net yields will be down 1.7% over the third-quarter 2001, and it estimated yields for 2002 will be down about 1% to 2% over 2001.

• Norwegian Cruise Line is expanding its wireless Internet access, which currently is available on the Norwegian Sun, to the rest of its fleet by the end of the year. Guests who bring their laptops on the cruise (or rent one from NCL) can get a wireless network card for their computer and then log on to the Internet in any of the ship's lounges, meeting rooms, atriums and foyers.
• Uniworld will launch two new river cruising ships in Europe next year. The 138-passenger River Countess and River Duchess will premiere in March and June 2003, respectively. The River Countess will sail Holland during tulip season, then reposition to the Black Sea; the River Duchess will operate Danube sailings between Budapest and Nuremberg.
• Seabourn introduced Seabourn Fast Forward, a free program that allows travel agents to customize their own e-mail promotions that "reflect the luxury reputation" of the line.
• The Delta Queen Steamboat Co. rolled out a multimillion-dollar consumer and trade marketing blitz, the first phase of a 16- to 18-month advertising campaign. Delta Queen also set up a toll-free number for travel agents -- (800) 416-0268 -- which it said would go directly to COO Tom Carman's voice-mail.

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