In November, analysts were taking the weakness in
stride, noting the fourth quarter is seasonally weak and
that the initial stock market crash coupled with the
election process produced times of tumult and uncertainty.
Some analysts cautioned against using late-2008 consumer behavior as a barometer. “For 2009, booking behavior should stabilize,” predicted UBS analyst Robin
Farley. “We don’t believe that the level of distraction
and delayed decision-making in the last six weeks is
representative of how consumers will feel for the next
The cruise industry is banking on the premise that
consumers, having less money to spend on vacation,
will favor the low price of cruising compared with land-based vacations.
And once consumers spur that demand, prices will
go back up.
Until then, even the cruise executives admit there
might be some weeding and that travel agent survival
could be threatened.
When questioned during Royal Caribbean Cruise
Line’s third-quarter earnings call about travel agents’
health in this economy, Dan Hanrahan, president and
CEO of Celebrity Cruises and Azamara Cruises, said he
Cruise ships docked at Port Everglades, Fla. In the forefront is Royal Caribbean International’s Independence of the Seas. The ship docked next to it is Holland
America Line’s Rotterdam.
believes that their large travel agent partners, the ones
they work with on a regular basis, “are well positioned
to get through this.”
Hanrahan added: “There will probably be some that,
as a result of the downturn in the economy, could end
up having some serious problems.”