Economic turmoil reigns, but reports from within the cruise industry suggest another profitable year ahead. Is the sector as recession-proof as it hopes?
Throughout 2008 and early 2009, the worsening state of the world's economy has resulted in a bleak outlook for many industries, but in spite of grim predictions for tourism and leisure businesses, the cruise industry has remained upbeat about its prospects over the next 12 months.
In June 2008, a report by the Passenger Shipping Association (PSA) predicted that customer numbers will top 20 million by 2011, rising to 30 million by 2020, even allowing for a slowdown in growth. In January, the Cruise Lines International Association (CLIA) suggested that, despite the uncertain environment, the industry is 'well-positioned for challenging times', with 14 new vessels set to join the fleet this year at an estimated cost of $4.8bn.
In the last ten years, cruising has become one of the fastest growing segments of the tourism industry, and many believe its reputation as a value-for money holiday option will help protect it against the effects of recession. However, with consumers increasingly cautious about spending, others consider these expectations too optimistic. With the International Monetary Fund (IMF) warning that global economic growth is set to fall to just 0.5% this year, the lowest rate since the Second World War, can the industry really be immune to the downturn?
David Dingle, chairman of the European Cruise Council and CEO of Carnival UK, thinks there will be a hit on business this year, with a noticeable reduction in yields already becoming apparent.
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Source - worldcruise-network
