Travel Weekly's Cruise E-Letter: October 30, 2001

CARNIVAL CRUISE LINES' booking activity from Oct. 22 to 28 rose 12.3% vs. the same one-week period a year ago, said Bob Dickinson, president. The booking increase also exceeds Carnival's capacity growth since Oct. 2000. "It appears consumers are regaining confidence and concluding that the deals out there right now are too good to pass up," Dickinson said. Occupancy on Carnival's 15 ships averaged 105.7% (cruise operators define 100% occupancy as all lower berths filled) for voyages departing from Oct. 19 to Oct. 24. Dickinson said fleetwide occupancy levels were "still somewhat below normal," but "we are operating at solid passenger loads."

NORTHRUP GRUMMAN'S Mississippi-based Ingalls shipyard suspended work on Project America, a program to build two 1,900-passenger ships for cruise operator American Classic Voyages (AMCV). Northrup stopped construction Oct. 26 in the wake of AMCV's Chapter 11 bankruptcy filing Oct. 19. The project was funded in part through government loan guarantees, but that financing was pulled after the bankruptcy filing. "Unfortunately, to date the U.S. Maritime Administration has decided not to continue the guaranteed funding necessary for the construction of the ships," said Phil Dur, corporate vice president. The first ship, originally slated to debut in 2004, is "40% complete," according to the statement.

MEANWHILE, adventure-cruise specialist Star Clippers is offering passengers booked on canceled cruises of American Classic Voyages a 33% discount off new bookings on the ships Star Clipper and Star Flyer. Bookings must be made by Dec. 31; the discount applies to sailings departing from November through March 2002.

SILVERSEA CRUISES is consulting with insurance providers to formulate a program to ease financial penalties for passengers who cancel cruises, said Bill Leiber, senior vice president of sales and marketing. Sailing aboard Silversea Cruises' 382-passenger Silver Whisper, Leiber told travel agents and media that consumers are less concerned with security issues than with losing their deposits if they opt to cancel their cruise close to sailing. Leiber said details of the program would be announced in the coming weeks.

CRUISE INDUSTRY OFFICIALS are hitting the road over the next two weeks in a campaign to assure consumers that cruising remains a safe, affordable vacation option. Representatives of the Cruise Line Coalition, a joint initiative launched this year by Cruise Lines Int'l Assn. and the Int'l Council of Cruise Lines, will concentrate on TV and radio appearances in nearly 30 North American cities, including Atlanta, New York, San Francisco and West Palm Beach, in a bid to boost business. "We want to emphasize the cruise industry's commitment to ensuring that Americans can exercise their right to travel freely in a safe and secure environment," said Jim Godsman, president of CLIA.

P&O PRINCESS CRUISES, the London-based parent of Princess Cruises, last week reported third-quarter pre-tax profits of $171.5 million compared with $175 million in the period last year, a 2% decline. The company did show an after-tax profit, mainly because the line changed several of its ships from Liberian to British registry near the end of 2000 and benefited in 2001 from the British government's more lenient tax code for shipping lines. Revenue for the quarter was $776 million compared with $778.1 million in 2000. Third-quarter occupancy for the company's North American fleet, which accounts for 75% of P&O's business, was 99.9% compared with 101.6% year over year. Net revenue yields were 5% below third-quarter 2000 totals.

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