Cruise Newsletter - February 2005

Editorial.

It's nice to have some good news to report for a change.  I was pleasantly surprised to see the results of a survey  that indicated that the number of incentives and in particular the number of travel incentives, are on the rise.  Companies budgets for these reward programs are also on the rise with a steady growth in individual spending, a median dollar figure for individual spending being in the region of $2,650.00 per qualifier.

Two thirds of the companies surveyed indicated that they reward their sales people and distributors with travel either on an individual basis or as a group program, non-sales people also received recognition with 50% of the respondents stating that they also had incentive programs to reward them as well.  

Group travel was stated as being the number one reward for all three groups. However, not everyone is rewarded equally, non-sales people where just as likely to receive cash or merchandise as a reward. Oddly, while merchandise was the reward for distributors in one in four cases, incentive organizers are not convinced in its ability to motivate.

Increasing sales was obviously the biggest reason to do an incentive program, with as much as 25% of the respondents having a particular niche objective for their programs, such as, to steal market share from competitors, grow product awareness, increase the sales of a particular product or a single line of product. Naturally the bigger individual budgets were spent on rewarding the highest achievers.

So where did these programs operate?  Those that chose a domestic destination went all over, but the majority went to the usual popular destinations, with Florida being #1, Hawaii #2, California #3, Arizona #4, Nevada #5.  Those that went overseas went to such places as Barcelona, Hong Kong, Nevis, Nassau & Rome with the Caribbean being the #1 choice, Cancun/Riviera Maya #2, Los Cabos #3, Bahamas #4, Spain & Italy tying at #5.  Canada which had previously proved to be popular was not in the list of top sites.  Mexico however, was received enthusiastically with strong bookings for Cancun and Los Cabos in particular.

The breakdown of destinations showed the following - Forty two percent of the incentives went to an international destination, fifty percent went to a domestic destination and just eight percent took a cruise... why we asked our staff... the reason was unanimously agreed - so many planners just pick up the phone and call their connections in the hotel industry, its quick, its easy and they know what they are buying and how to purchase it... we want you to think of Worldwide as your contact for cruises, we are your purchase source and you don't have to make half a dozen calls to get six different suppliers prices.. we do all that and more for you.

The one cloud on this rosey horizon was - only twenty five percent of the companies surveyed is actually outsourcing to incentive houses or independent planners to help them with the travel logistics, the other seventy five percent are making their own in-house arrangements.

Another item I found interesting was - seventy five percent of site selections decisions for incentive travel program destinations are being made by either a C-level executive or by sales and marketing management not the CEO's or top echelon executives as one would suspect.

Special and Great Value Charter Opportunities:

Le Diamante (ex-Song of Flower) - April 16-23, 2005 from Nice to Nice (France) - $385.000,00

Seabourn Pride  - Nov. 13-20, 2005 - Ft. Lauderdale - Barbados - $448.000,00

Ship News

• It was recently announced that the popular "Radisson Diamond" had been sold to far eastern interests and will be moving to an Asian destination where she will be transformed into a luxury gambling cruise ship.  RSSC have stated that all programs signed for deliver through to the end of May 2005 will be honored.  Our source advises that RSSC will deploy the Navigator to do some four and seven  night cruises from San Juan and then will position the vessel in the Mediterranean and the Baltic in June.

• Crystal Cruises, to complement its dedicated golf cruises, has formed a partnership with TaylorMade to provide tournament-level drivers, irons and other golf equipment for the line's luxury guests. Crystal's comprehensive golf program features right- and left-handed clubs available for both men and women, as well as golf clinics, instruction by PGA golf pros, a putting green, practice cage and driving ranges onboard Crystal Harmony, Crystal Symphony and Crystal Serenity. Crystal says as many as 10 percent of guests attend its year-round shipboard golf classes with golf pros providing free instruction. Morning sessions range from 45 minutes to an hour, and there are 30-minute afternoon golf clinics during days at sea. Lessons cover everything from basic mechanics to full swing, from irons to woods, from putting to chipping, pitching, sand play, equipment and specialty shots. Depending on the itinerary, the line's concierges will also make golf arrangements ashore for guests who might want to play at such well-known courses as Mahogany Run in St. Thomas or at London's Orsett Golf Club

• This newsletter recently did a brief introduction to the Fred. Olsen Line and their ship the Black Watch so we where interested to hear that  as part of a major refit to the ship an additional 14 balcony suites will be created. These will be situated in the area currently occupied by the Explorers Library, Dalreoch Card Room and internet room. The new suites will be between 22 and 30sq mtr in size (excluding balconies) and will have twin beds, bathrooms with bathtub as well as shower, hairdryer, television, fridge and private balcony. Three will also have an additional sleeping area with twin bunk beds, suitable for families. The new suites will be on available on cruises from June 23 following the refit at the B+V yard in Hamburg,  Germany. The company announced that they have undertaken this work with the customers’ needs very much in mind. There is always a strong demand for top grade cabins, especially balcony suites, and by installing 14 new ones they will be better placed to meet this demand. By relocating popular facilities such as the library, card room and internet room to underused areas we are able to create new cabins without sacrificing facilities that our customers really enjoy.

• The Institute for Shipboard Education ship the Explorer has been docked in Honolulu since Jan. 31 for assessment and repairs after being damaged on Jan. 26 by a powerful wave in stormy seas. The massive wave burst into the bridge, flooding equipment and injuring two crew members on the bridge.  Underwater and interior surveys of the ship’s hull found no structural damage and the Explorer is considered ‘completely seaworthy,’ according to the Institute for Shipboard Education. The assessment of the electrical systems is still underway, and replacement parts are being installed as they arrive from Germany and other locations. has revised its schedule for the current Semester at Sea program. Starting this week, students will fly to Shanghai and Hong Kong to commence their field trips in China. Next week they will continue by charter air to Vietnam for further field study. The students are expected to rejoin the MV Explorer at Ho Chi Minh City later this month. From there, the vessel is scheduled to resume its original itinerary to India and beyond.

• Kudos to the Costa Atlantica which earned a perfect score of 100 on its semi-annual, unannounced U.S. Public Health inspection by officials from the Centers for Disease Control and Prevention.

• In a new partnership, National Geographic Traveler will bring noted photojournalists to Celebrity Cruises for the line’s ‘Celebrity Discoveries’ enrichment series. The series features up to four lectures on every cruise with topics ranging from world affairs and finance to art and music. Celebrity also will introduce a National Geographic channel on its in-room TV system, and passengers will receive an exclusive subscription offer to National Geographic Traveler, plus the opportunity to win a framed, limited edition National Geographic print.

• An item of interest which is worth checking out - One of our overseas clients recently did a site inspection for a group they are bringing in from Europe, this group normally cruises on top end ships, but this year decided to look at something different and chose one of Carnival news ships.. see what they thought of the experience.  It is quite enlightening in view of the way Carnival is reposition itself with the NEW Carnival image. Ship report

Pictures of Worldwide Holiday Party - do you recognize any of the revelers

Interesting news and statistics

• Another piece of good news... and even though this does not directly impact the  world of corporate travel it does never the less have implications both good and bad for our market sector.  Try this for a number - 760,000,000 people took a foreign vacation last year...  while this is a worldwide number is is still very impressive and it actually represents a ten percent increase over the preceding year. While the number of travelers appears to be peaking, the source estimates it will continue to rise by another five percent this year and grow steadily to 1.5 billion by the year 2020, making the outlook for the travel industry look very healthy.. the question is.. how much of this will be directed to our market segment.. will corporate travel, incentives and meeting go overseas at the same rate of growth.  The major beneficiary's of this travel binge have been the United States, Spain and France. There have been some flies in the ointment however, the SARS outbreak in Asia and now the tsunami devastation has and will impact the industry in those areas, but having said that, the Sri Lanka government estimate that tourist arrival will only fall by five percent this year and Asia has already rebounded from the SARS outbreak by a healthy 29 percent through 2004.

• Despite hurricanes, sky-rocketing fuel costs and other challenges, 2004 was a very good year for Royal Caribbean Cruises Ltd. (RCL) who recently reported net income for the year of $474.7 million, or $2.26 per share, compared to $280.7 million, or $1.42 per share, in 2003. Revenues for the year increased 20.4% to $4.6 billion from revenues of $3.8 billion in 2003. The increase in revenues was attributable to a 10.3% increase in capacity coupled with an increase in cruise ticket prices, occupancy and onboard revenues. Gross Yields for the year increased 9.1% from 2003. Net yields increased a record 9.2% from 2003 and occupancy reached 105.7%, up from 103.2% in 2003. With net yields in the fourth quarter surpassing those achieved in the fourth quarter of 2000 (2000 was bumper year in the industry). However, a surprise to many people was the company's announcement of a net loss of $25.8 million, or $0.13 per share, for the fourth quarter of 2004, (which included in the fourth quarter an $8.1 million reversal of a tax accrual), this compares with a net loss of $20.0 million, or $0.10 per share, for the fourth quarter of 2003.  An unexpected spike in at-the-pump fuel costs during November and December was the primary driver of the increase in loss over 2003. During the fourth quarter of 2004, fuel costs represented approximately 7.1% of total revenues.

• With three weeks of the industry's wave period completed, the company was able to report that bookings and pricing levels continue to be strong. Consumer demand is healthy across all products and for both brands. Many of the demand characteristics the company is now seeing are similar to those seen in the late 1990's. As a result RCCL is forecasting an increase in net yields for the first quarter of 2005 of approximately 7% and net yields for the full year 2005 in the range of 5% to 7%. These results reflect the underlying strength of the cruise industry and the steadily increasing strong demand that we have been talking about for some months, right here in our newsletter.

• RCI's major competitor - Carnival Cruise Line - With capacity increases in five U.S. homeports, new year-round programs from Mobile, Ala., and Jacksonville, Fla., and its first-ever Mediterranean cruises, Carnival Cruise Lines expects to carry a record 3.3m passengers in the coming year. Newer, larger Fun Ships have been deployed in Miami; Tampa; New Orleans; Galveston, Texas; and Long Beach, Calif., representing an average capacity increase of 31% over the vessels they replaced. In total, the Carnival brand will operate more than 1,300 cruises aboard 20 ships departing from 18 North American homeports – the most in cruising – during 2005.

• A piece of good news for all NCL fans... Following the less than auspicious NCL Hawaiian cruises of last year, NCL has gone to considerable lengths to initiate and educate their crew members both into life on board a cruise ship from a crew members viewpoint and to ensure they are fully trained to offer the level of service expected on the NCL ships. Utilizing the Seaman's International Union training facility at Piney Point prospective crew members are put through a vigorous training schedule in everything from housekeeping to firefighting.  The Seaman's Union obviously has a vested interest in the project as this represents a big opportunity for them to grow their membership.

Port news

• Sydney’s Darling Harbour cruise terminal is to stay put.  The Wharf 8 cruise terminal is safe from a massive redevelopment plan announced by the NSW Government for the East Darling Harbour precinct.  Speculation has been rife about the future of Wharf 8, home base for P&O’s resident ship Pacific Sun and Sydney’s second international cruise facility along with the Sydney Cove Overseas Passenger Terminal. The reports that it would be moved to a less desirable location were inacurate. It had been made clear from the start that Wharf 8 would be maintained as part of the proposed East Darling Harbour city park and foreshore walkway from Anzac Bridge to Woolloomooloo. We are advised that an international competition will be held for the design of apartments, offices and restaurants on the 22 hectare site that is owned by Sydney Ports and is under lease to Patrick Stevedores until February 2006.

• St Helier Harbour, Jersey in the Channel Islands (off the NW Coast of France). In an effort to capture more of the small to mid-size cruise ship traffic the Jersey Harbour Authority is considering the construction of a floating terminal amongst a number of options under consideration. At the moment cruise ships of up to 120mtr in length can dock inside the port. One option being considered is to use the Elizabeth Harbour ferry terminal, which could handle ships of up to 140mtr, enabling cruise passengers to step straight ashore to tour the island and visit the duty-free shops and attractions. However if a floating cruise terminal was to be installed just outside the entrance to St Helier Harbour, within the shelter of a long breakwater attached to the 16th century Elizabeth Castle, then larger vessels could be handled.  Fred Olsen Cruise Lines has already indicated that it would base a 150mtr vessel in the Channel Islands if a suitable berth was to be created. The project is in its early stages ,however, there is no doubt that the European routes are the fastest-growing sector of the industry and that it is ships of 150mtr and less that can visit the smaller ports in the area.

Shipping News

• Rapid Explorer Inc., the provider of luxury high-speed transportation between St. Maarten and St. Barths, have added a new 150-passenger vessel to the route and plans to expand service to Antigua, Barbuda and Montserrat in the near future. Rapid Explorer’s fast ferries travel at speeds of 30 to 35 knots. The trip between Philipsburg, St. Maarten, and Gustavia, St. Barths, typically takes less than 40 minutes and operates three trips daily, five days a week and twice daily the other two days. The Friday and Sunday evening service between Marigot, St. Martin, and Gustavia takes 60 minutes. The ferries are enclosed and air-conditioned, with cold towels, beverage service, snacks and audio and video entertainment. Cruise passengers may purchase roundtrip transportation to St. Barths or a package that can include an island tour and lunch. Rapid Explorer works with Royal Caribbean International, Celebrity Cruises and Costa, and is in talks with five other lines. The company plans to launch service from Antigua this month and will offer cruise passengers roundtrip transportation to Barbuda with lunch. A trip to Barbuda’s bird sanctuary can also be included. Within 60 days of starting service in Antigua, Rapid Explorer aims to expand its routes to include excursions to Montserrat. Rapid Explorer also operates high-speed transport along the French Riviera, serving Monaco, Nice, Cannes and St. Tropez.
  Holland America Line Announces 2006 deployment featuring 13 ships, all seven continents

• In 2006, Holland America Line will debut the new ms Noordam, visit Libya for the first time, feature eight ships cruising Alaska, and Australia/New Zealand voyages aboard the ms Statendam. The 13 HAL ships will offer nearly 500 sailings to all seven continents from more than 25 home ports. Itineraries range from two to 108 days and feature many ports, including such new ones as Benghazi, Libya; Pearl Island, Panama; South Georgia Island in the sub-Antarctic islands; and Narvik, Norway.
  Highlights of the 2006 deployment include; the Noordam debuts in February offering 10 and 11 day, roundtrip cruises from New York to the Caribbean. The newest Vista-class ship will sail 13 cruises to the Eastern and Southern Caribbean and two 16-day transatlantic sailings and fifteen 10-day Mediterranean cruises from Rome.  Eight ships will sail 159 cruises to Alaska. The ms Westerdam, ms Zaandam and ms Oosterdam will homeport in Seattle, and five ships will sail from Vancouver.
  The ms Statendam will feature nine 14-day sailings between Sydney, Australia, and Auckland, New Zealand, during “Down Under’s” summer – Jan. 7 to Feb. 18 and Oct. 27 to Dec. 22 – including a holiday cruise. The Statendam also sails from Australia to Indonesia, The Philippines, China, Korea, Japan and Russia in the spring and offers a 28-day South Pacific cruise from the U.S. West Coast to Auckland in the fall. The 793-passenger ms Prinsendam sails the “Circle of the Sun” Grand World Voyage that showcases a total solar eclipse Mar. 29, features nine maiden ports of call including Benghazi, Libya, and explores such exotic places as Madagascar, Zanzibar and Mombasa. The 108-day journey departs from Ft. Lauderdale Jan. 5 to visit 36 ports in 22 countries on six continents, including South America, Antarctica, South Africa, East Africa, India, and Mediterranean before returning to Fort Lauderdale on Apr. 20. The Prinsendam again will explore the Amazon River to Manaus, Brazil, on two South America cruises: a 28-day sailing from New York/ Ft. Lauderdale to Ft. Lauderdale on Apr. 23 and a 24-day cruise from Cape Town, South Africa to Ft. Lauderdale on Nov. 8.
   

PROGRAM IDEA's

Coming up soon are several sporting events which our clients should be focusing on:

Monaco Grand Prix - this event is held annually in Monte Carlo - call us for ideas, we have already signed several charter contract for this year and 2006.. there is still time to do something.

• 2005 date - May 29

• 2006 date - May 28

2006 Ryder Cup - This event is being held in Ireland at the prestigious Kildare Golf and Country Club, Straffan, Co. Kildare, between Friday 22nd and Sunday 24th September.  We are looking at bring a ship into the port of  Dublin with pre & post cruises planned around the event. Call us if you have any clients interested in a very exclusive golf/cruise program.

Superbowl in Miami 2007

Try to form, just as soon as this years Superbowl was over, our telephones started to ring for Superbowl 2007.  Call us for some ideas, we are happy to chat about options and who and what might be available in Miami.

The America's Cup 2007

Worldwide continues to bring this event to your attention as we feel there is a lot of corporate potential for our clients.

Moving Forward
The Spanish Challenge, previously named 'El Reto', had a public unveiling for VIP's, partners, guests and officials on Saturday the 5th of February 2005. Now called 'Desafío Español', the Spanish team showed its colors at the spectacular Hemispheric complex at the bottom of the Río Turia gardens, with an unveiling of one of its newly purchased America's Cup boats. The Spanish El Reto team, one of the most recent challengers  has acquired both OneWorld boats from the 2002-2003 America's Cup. More details from the 'home' team are expected soon regarding their design and sailing program ahead of their debut in Valencia for the Louis Vuitton Act 4. While this presentation by Desafío Español was certainly focused on the administration and management side of the team, we can expect some announcements very soon regarding the sailors and designers that will be driving this 'home' team forward. Renowned Spanish sailor Luis Doreste has been appointed Sailing Director and will be doing the recruiting for the sailing team. The Desafío Español squad will make its debut on home waters at the Valencia Louis Vuitton Act 4, with racing beginning the 16th of June.

Meanwhile, the massive construction project in the Darsena Interior continues to roll along. The transformation of the  is moving along to become a modern home for the America's Cup boats. Finally, work is very much underway on the transformation of the Darsena Interior, the old fishing and ferry port, in the Port of Valencia. In areas where the team bases will be built, the land is being extended out into the Darsena with thousands of tonnes of earth trucked in for land reclamation. Barges with diggers are dredging where the boats will be docked, and foundations are being laid for the bases. It's already an exciting time to be in Valencia, and the action is only beginning!

On the North side of the Darsena Interior the main support pilings for the first team base have been put in place. This base is for the +39 Challenge, the first team to finalise its plans with the contractors to allow construction to begin. Each of the team bases will follow in short order now, and by the time the Valencia Louis Vuitton Acts begin in June, the Port will also feature a large superyacht pier, making the Darsena Interior one of the most attractive big boat marinas in the Mediterranean.

The challengers of 32nd America's Cup (collectively known as the Challenger Commission) conducted a two day meeting in San Francisco at the beginning of the month. The Challenger Commission shares the main responsibility for developing the points and scoring for the Louis Vuitton Cup as well as the lead up Louis Vuitton Acts in 2005 and 2006. Among other resolutions, the meeting in San Francisco should result in the point scoring formulas and regatta formats being finalized and released shortly. For the challengers, the objective of the Louis Vuitton Cup isn't just to select a team to compete in the 32nd America's Cup Match, but to build a tough, worthy Challenger that is strong enough to fight and perhaps defeat the Defender, Team Alinghi - the format of the event should be one that promotes this agenda.

Finally, a number of 'project' teams are still trying to beat the April 29th deadline to challenge for the 32nd America's Cup. The America's Cup organizers are working with these 'projects' to assist them in realizing their dreams of challenging for the America's Cup. We will see in the coming weeks if any of these teams can leap over this first hurdle, and thus join us on the water in Valencia in June.
 

THE AMERICA’S CUP – THE STAGE FOR CREATING LEGENDS as well as a SITE Crystal Award.

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