Travis Reed , The Associated Press , Miami
IMPIAN MONALISA-Seeking a getaway despite the downturn, Olivia Gonzalez called her travel agent with an agenda.
"I said, what kind of deals do you have?" said the Miami resident, who is in her 60s, standing outside the Port of Miami. What she found was a six-day, five-night cruise through the Bahamas and Turks and Caicos for $299 a person.
That was all the convincing Gonzalez and thousands of other passengers have needed lately to set sail. Though vacations are disposable when money gets tight, the cruise industry has kept ships full with deep discounts and some itinerary changes to shorter, cheaper voyages. Norwegian Cruise Line is sailing three-and four-day swings for the first time since 2004. Carnival Corp. is offering free state room upgrades and more Caribbean choices - a quick skip from the Miami port - in 2009 to accommodate demand.
"Consumers are looking for more value for their vacation dollar," said Howard Frank, Carnival's chief operating officer, on a recent conference call with analysts. "And our shorter, less expensive Caribbean cruise products are performing much better than our premium and luxury, longer cruise products. So we are seeing a consumer trade-down to value."
The major cruise lines are also seeing vacationers wait longer to commit. Before the downturn, bookings averaged about six months in advance, maybe eight months for luxury trips, said Bob Sharak, executive director of the Cruise Lines International Association.
"People are deferring their purchases to the last minute," he said. "They're booking, but it causes the operators some degree of agitation, because it takes longer to put that sailing on the books.
"I don't think that's something unique to our cruise business right now. I think all travel is like that."
Carnival is offering three- and four- day trips to Mexico and the Bahamas starting at $209 for the lowest-level rooms at the last minute, a nearly 50 percent discount in some cases. A four-day Baja California, Mexico cruise sailing in February and now selling at that rate would cost $399 later, while a three-day Bahamas vacation leaving Jan. 23 is available for $219 instead of $349. Norwegian's short Bahamas cruises were starting at $229 through mid-April.
Long considered a good vacation value, the cruise industry is holding up better than some competitors in this climate. The Port of Miami saw record cruise traffic of 3.8 million passengers from January to November 2008, a 10.5 percent increase over the previous year. Sharak predicts overall occupancy will continue to increase, despite grim predictions for 2009 in the industry and economy overall.
Both Carnival and Royal Caribbean have suspended stock dividends, a sign of some distress, and last month Carnival lowered its revenue predictions for 2009.
"I'm not minimizing today's situation. We've not seen an economic situation like this in America or globally in my lifetime," Sharak said. "However, if history is an indicator of the future, the business itself has been resilient in these varied markets, and I think right now we're showing that as well."
Carnival has rolled out a new pricing scheme to entice further advance commitments. The "Early Saver" program offers 25 percent discounts for certain trips booked up to three months before departure, plus a guarantee those passengers will get the same savings if rates drop.
"The good news is that consumers are still taking their vacations, but the vacation decision is for next month, rather than next year," Frank told investors.
For consumers, the cruise lines' push to fill big ships can mean big savings. Shannon McClelland was shopping for a birthday gift for her boyfriend two months ago when she found a five-day cruise sailing out of Miami for $1,500 a couple, including airfare from New York.
"Today is his birthday, so this is his birthday present," said McClelland, of New York. "I was just looking for something nice, it seemed doable, so we did it."
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