According to the Cruise Lines International Association, deployment of the 26 North America member lines since 2008 has increased 155 percent in Australia, New Zealand and neighboring islands; 302 percent in Asia; 49 percent in the Mediterranean; 57 percent in other parts of Europe and 57 percent in South America. Meanwhile, capacity in the Caribbean has increased just 33 percent and in Alaska, it has dropped by 5 percent over the last five years.
And for U.S.-based operators that have long catered to North Americans, the experiences abroad are providing an education in globalization — and risk management.
“The world is a big place and stuff happens, so you never know when you’re in the right or the wrong area,” said Larry Pimentel, a longtime cruise industry executive who heads up the boutique Azamara Club Cruises line for Royal Caribbean Cruises Ltd. “You never know when more domestic itineraries are a blessing or it’s the year when everyone wants to go to the place where you’re not.”
Last year provided a double whammy of an example in Europe, where North American lines have been increasing deployment: First, the Costa Concordia struck rock and capsized in Italian waters in January, sending demand and cruise fares in the region plummeting. Then European economies started tanking, pulling down profits in the region.
The year before, unrest related to the Arab Spring in the Middle East and North Africa forced cruise operators to change hundreds of sailings at great cost — bad news for Africa, which gets few ocean cruise visitors outside of Egypt, Tunisia and occasional long voyages.Also in 2011, the earthquake and tsunami in Japan disrupted scheduled sailings to the region.
For Royal Caribbean International, which was about to start the year’s cruises to Japan, the disaster meant that sailings to the country that had been booked years earlier had to be abandoned and the company had to scramble to sell voyages from Singapore.
“By diversifying where the ships go and where we source, inevitably there’s a greater chance that something happening in the world will affect us somewhat — and lesser chance that it will affect us a lot,” said Adam Goldstein, president and CEO of Royal Caribbean International. “That is a reality that we understand, and so we try to be as prepared as we can be and still we have to expect the unexpected. If we have to adjust itineraries, one of the great attributes of our industry is that we can move the ships. It’s not necessarily painless.”
Goldstein said that the brand he oversees has been sailing in Europe and Asia for the past 20 years, but with a different goal in mind initially.
“The intent of those programs was to take Americans on increasingly far-flung cruises. And while we still do that and we still like to do that...there’s been a profound evolution,” he said. “And now the majority of our customers on cruises outside of North America are from the local markets where the ships are based.”
Royal Caribbean opened offices to focus on local markets in China and Australia in December 2008 and in Brazil the following August, a market Goldstein said requires the line to offer “a party 24/7, music and dancing in and outside at virtually all hours of the day and night.”