When Miami-based Seabourn cruise line first signed to build the industry's first new luxury liner in six years, its executives never imagined they'd be launching it during the worst economic downturn in a generation.

When its new $250 million Seabourn Odyssey set sail last month in the Mediterranean, the 450-passenger ship offered pricing discounts of 65 percent.

Such steep discounts are rare on any new ship -- but likely to continue, say industry watchers, as three additional luxury cruise liners enter the market in the next two years.

Europe-based Silversea -- whose U.S. headquarters is in Fort Lauderdale -- is slated to launch its new luxury ship, the 540-passenger Silversea Spirit, in December. Yachts of Seabourn -- owned by Carnival Corp. -- will debut two more new ships in the next two years.

With that kind of capacity increase in the making, the discounting is going to continue for some time, said Mike Driscoll of Cruise Week, a newsletter that tracks cruising trends.

Like hotels and other travel experiences, cruises have suffered during the recession, and prices on mass-market lines -- like Carnival, Royal Caribbean and Norwegian Cruise Line -- have hovered around $100 per person per day. But the luxury market has suffered the biggest drop of any cruise sector; rates now sometimes dip below $300 per person per day, down from brochure rates as high as $900 per person per day.

SeaDream Yacht Club is offering cruises as much as 67 percent below brochure rate to fill its 112-passenger ships. Silversea is both discounting and offering free air fare from the U.S. to foreign ports of embarkation on select sailings.

`THE BIG DEBATE'

``The big debate,'' said Driscoll, ``is whether to cut rates and sail full, or to keep rates up and sail half full.''

The drop in luxury travel isn't confined to cruises. YPartnership, a research company in Orlando that monitors the travel business, says the luxury lodging market in the U.S. has taken a bigger hit than the rest of the accommodations industry. The average luxury lodging in early August was down 20.3 percent from a year earlier, said Greg Dunn, Ypatnership's executive vice president for consumer insight. This compares to minus 9.7 percent for the overall U.S. lodging in the same period.

But there may be a silver lining in the discounting trend, say cruise lines: The lower prices are attracting a new group of passengers.

``We did a survey of the first cruises on our new ship, the Seabourn Odyssey,'' said Seabourn spokesman Bruce Good, ``and found the number of first timers was 25 percent higher the average. And the number of passengers 45 and under was 64 percent higher.''

Traditionally, luxury cruises have attracted affluent passengers that are 60 and older. But today's deals and discounts are attracting younger cruisers now able to afford the relatively bargain rates currently being offered. This could be a lasting trend.

``Luxury cruising now has a whole new energy in it,'' said Carolyn Spencer Brown, editor of Cruise Critic, an online cruise magazine. ``A lot of people make decent pay and prize a good experience.''

If they sail on a luxury line while prices are low, she said, they may want to stick with the upgraded service, dining and accommodations when the economy -- and prices -- rebound.

Seabourn President Pam Conover agrees.

``History shows that if you get people to try [the luxury lifestyle], their satisfaction is so high that they come back,'' she said. ``We have found that two-thirds of our passengers repeat within two years.''

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