'Cruise could still hit 2m passengers by 2012'

'Cruise could still hit 2m passengers by 2012'

The UK cruise market could still reach two million passengers by 2012 despite the poor economic outlook.

In the Cruise Report 2009, Carnival UK chief executive David Dingle has stuck to last year's growth prediction despite a decision to phase out both Ocean Village ships and the worsening economic climate.

Asked how far ahead the company was able to plan its budgets and finances, Dingle said it had collected enough in its coffers from past rapid growth to counter rough periods ahead "for some time".

"Cash is king," he added. "We can absorb new capacity even at times like this because we're able to be fleet of foot by, for example, moving ships into markets that emerge. That juggernaut of cruise growth doesn't just stop."

Dingle hinted new ships could still be ordered for the UK market. Globally there are already 40 ships on order through to 2012, of which Carnival accounts for 17.

He said: "Despite a degree of consolidation through the transfer of the Ocean Village ships to Australia now making it a more ambitious target, I would still not rule out the UK reaching two million passengers by 2012. After all, there may still just be time to order more ships for the UK market for delivery in 2012."

He acknowledged, however, he did not envisage many cruise ships being built post 2012.

The overall cruise market in the UK topped 1.5 million in 2008, a year-on-year growth of 12%. Carnival UK accounted for 60% of the additional UK cruise passengers - 100,000 out of 170,000.

Dingle remained optimistic about sales holding up beyond this year's first quarter. "People are spending money they may have saved otherwise," he told Travel Weekly.

The UK Passenger Shipping Association predicts 2%-3% market growth this year. Overall, Carnival UK will have just 2% capacity growth this year with the loss of Cunard Line's Queen Elizabeth 2 offset by a full year of P&O Cruises' Ventura, the larger Grand Princess replacing Sea Princess out of Southampton and the launch of The Yachts of Seabourn's new ship Seabourn Odyssey.

Dingle admitted low capacity rises would help protect the sector as a whole. He said: "This may prove to be fortuitous given the ongoing economic situation. It will also help that other companies are not significantly increasing capacity in the UK market either."

In 2010, Carnival UK's capacity will grow by "a prudent" 10% with the introduction of P&O Cruises' Azura launch in the spring and Cunard Line's Queen Elizabeth later in the year.

The bullish outlook for the sector comes as Carnival UK reports a 25%-35% year-on-year increase in current sales depending on the brand - largely the result of price cuts of 5%-10% for sailings this year - and 20% growth in 2008 following the introduction of P&O Cruises' Ventura, the first full year's operation of Cunard Line's Queen Victoria and strong sales across other brands.

Princess Cruises carried record numbers of Brits in 2008 thanks to 'word of mouth' advertising, while Carnival Cruise Lines' sales increased by nearly 80% last year compared with 2007 thanks to publicity following Carnival Splendor's launch.

For Cunard, the UK remained its largest single market in 2008.

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