Carnival Cruise Lines says it just recorded the highest number of net bookings in its history during the one week period ended March 1, 2009.  This would hardly be newsworthy if it wasn’t in the midst of the worst economy since the Great Depression.

While the purchase of discretionary items in all price categories has decreased, one segment of the travel industry that remains strong is cruising.   Because cruisers pay 80% of their vacation before departure cruising is already a big bang for the buck.  

Volume vs Profit

However, just because people are buying cruises in large numbers doesn’t mean cruise line profits are increasing.  From budget to luxury, cruise ships to river boats, cruise fares have been slashed by as much as 70%.   People are watching prices and ready to pounce when the price is right on their favorite ship or itinerary.

Post 9/11 the cruise industry — like other segments of the travel industry — was forced to steeply discount sailings in order to attract passengers.  At the time, the ex-president of Carnival Cruise Lines, Bob Dickinson, noted that ”fear has a price.”  In other words, if the price is low enough, people will overcome their fears of terrorism — or a failing economy — and book a seagoing vacation.

Additional Booking Stimulus

One trend that emerged from 9/11 was “Homeland Cruising”.  There has been an enormous increase in positioning ships year-round from U.S. ports, a feature that helps generate cruise bookings today.   Gone are the days when most people had to fly to Florida and other warm weather ports to board a ship:  today ships sail year-round from New York, Baltimore, Charleston and more West Coast ports. 

In addition, cruise line marketing executives are meeting cruisers’ fears head on with innovative promotions.  For example, Norwegian Cruise Line recently launched an insurance program that guarantees a full refund if the person booking the cruise looses his or her job.   To generate sales of Europe bookings, cruises are frequently bundled with airfare and transfers to make the price more enticing.

Hey, I don’t know about you, but when I see a balcony stateroom on the newest ship afloat priced at $800 per person, per week, I grab it.  It is getting so that taking a cruise is cheaper than staying home (New York)!  How about you?