Travel Weekly's Cruise E-Letter: Sept. 23, 2003

MORE THAN 4.5 MILLION passengers worldwide, including nearly 4 million North Americans, cruised on a Cruise Lines International Association-member line during the first half of 2003, according to CLIA. That's a 13.6% increase over the first half of 2002. More than 2.3 million of those people cruised during second-quarter 2003, a 5.7% year-over-year jump. CLIA-member ships sailed at 100.7% occupancy during the first half of 2003 -- which CLIA executive director Bob Sharak said was because of "the joint efforts of the industry and its professional travel agent partners."

PROFITS WERE UP at Carnival Corp. and plc. The world's largest cruise company in the world reported net income of $734.3 million for the third quarter ending Aug. 31, a 47% jump over third-quarter 2002. Revenues for the quarter were $2.52 billion, compared with $1.44 billion in 2002. Net revenue yields were down 3.4% but were better than Carnival's previous estimates of a 4% to 6% drop. The decline was based primarily on lower cruise ticket prices. The earnings were reported on a pro forma basis.

ALHTOUGH THE THIRD-QUARTER yields came in ahead of projections, Carnival executives sounded a note of caution heading into the seasonally slower fourth quarter. Yield is projected to fall 4% to 6% compared with last year. Frank noted the expansion in capacity means as more and more ships repositioning back to the Caribbean, pricing becomes more agressive. The Carnival plc brands also tend to be more seasonal.

ULTRA OF THE SEAS: Royal Caribbean Cruises placed its order for what will become the largest cruise ship in the world. The Ultra Voyager will be 160,000-plus tons and carry 3,600 passengers in lower berths, which makes it 15% larger or, in RCCL's words, "an even larger model" of the current world's-largest-class of ship, the Voyager series. The Ultra Voyager will be built by Kvaerner Masa-Yards in Finland and will be delivered in May 2006. Ship costs are estimated at just over $200,000 per guest berth. Meanwhile, the Ultra could be one of at least two: the yard also granted the company an option for a second Ultra Voyager, with a 2007 delivery date. The Jewel of the Seas, meanwhile, will be RCCL's final 2,110-passenger Radiance-class ship -- at least for now -- when it is delivered in 2004. RCCL said it will not exercise its two long-standing options for fifth and sixth Radiance-class ships.

NORWEGIAN CRUISE LINE will get two new ships as well. The orders were placed by parent company Star Cruises at Germany's Meyer Werft shipyard for two 2,400-passenger ships for delivery in fall 2005 and spring 2006. The two ships together are estimated to cost about $790 million.

THE DELTA QUEEN STEAMBOAT CO. said its sales of on-the-river vacations more than doubled in the January-to-August period, compared with the first eight months of 2001. And gross sales during the first two weeks of September set a record, the company said, at $2.4 million and $2.7 million, respectively. The DQSC, which was purchased by Delaware North Cos. of Buffalo, N.Y., in May 2002, attributed the sales spike to coordinated direct mail/ad campaigns and an early booking bonus program.

CARNIVAL CORP.'S CFO Gerald Cahill said the Internal Revenue Service issued final regulations for section 883 of the U.S. tax code, the section that exempts international shipping companies from U.S. taxes. How those regulations are defined: cruise operations can be taxed on "nonshipping" items that are U.S. sourced. For example: U.S.-based shore excursions, the sale of air fares and cruises-to-nowhere that leave and return to U.S. ports are subject to U.S. tax laws. The changes go into effect in Carnival's next fiscal year, Cahill said. "The definitions are what we were expecting," he added, saying it is a "minimal" part of Carnival's business.

THE CARNIVAL MIRACLE will land in New York next summer for sailings from the Big Apple to Port Canaveral, Fla., and Nassau and Freeport, Bahamas. The 2,124-passenger ship, which is currently under construction, will begin its seven-day Saturday departures on June 12. It also will offer a one-off five-day cruise from New York to New England and Canada on June 7.

THE SEVEN SEAS NAVIGATOR, Radisson Seven Seas Cruises' 490-passenger ship, will make its first calls in Tampa, Fla., in November. The ship offers four voyages from Tampa beginning Nov. 8: a 10-day southeren Caribbean cruise from Palm Beach to Tampa, two seven-day western Caribbean roundtrip Tampa cruises and a 10-day southern Caribbean voyage from Tampa to Fort Lauderdale.

NEW HIRES:
• Holland America Line appointed Tracey Kelly vp-sales, taking over a spot vacated by Linda Elhenberger. Kelly comes from Carnival Cruise Lines, where he was vp-sales, southern region.
• Oceania Cruises named Victor Gonzalez, formerly with ANC Rental Corp., senior vp-passenger services.

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