[ ROYAL TO SEE STRONGEST PRICING, NORWEGIAN THE WEAKEST ]
Analysts: Cruise prices will grow
modestly, led by Europe, Alaska
By Tom Stieghorst
Cruise line pricing is poised to head
mildly upward in the second half
of 2014, as itineraries in Europe
and Alaska that dominate the third
quarter take center stage and the
weaker Caribbean recedes in importance.
That’s the rough consensus of several Wall
Street analysts who track pricing across the
industry.
But when broken down by cruise region
and cruise line, the pricing picture looks
mixed. Cruises in Europe are definitely
showing the best price improvement over
last year, while the Caribbean lags.
Among the major cruise companies, Royal
Caribbean Cruises Ltd. (RCCL) appears to
be enjoying the strongest pricing power, with
Norwegian Cruise Line struggling and Car-
nival Corp. starting to put last year’s troubles
at its flagship Carnival Cruise Lines brand
behind it.
“Demand is improving,” Susquehanna
Financial Group analyst Rachael Rothman
wrote in a June 12 report. “We believe that
net yields will be positive for all operators
over 2014, demonstrating that demand has
exceeded supply even in spite of the mean-
ingful capacity increase in the Caribbean.”
Other analysts said the industry was ben-
efitting as it gets further from the Carnival
Triumph slump of a year ago, but they cau-
tioned that a strong recovery in 2015 is by no
means assured.
The first official glimpse at how pricing
Priceline sees mobile buying, growth
overseas in acquisition of OpenTable
By Danny King
Priceline Group’s $2.6 billion acquisition
of Open Table, the online restaurant-res-ervations system, was a deal motivated by
travelers’ growing propensity for making
purchases on the fly and by the opportunity
to expand a domestic success
story globally.
With more traditional and
bigger-ticket online travel sectors such as hotels and airlines reaching maturity in the U.S., and with growth in those
areas starting to plateau in regions like Western Europe, Priceline is widening its service
reach by making a multibillion-dollar bet on
the world’s largest online dining-reservation
service.
And while Priceline for much of the last
decade expanded by acquiring overseas companies, Open Table, like its most recent buy-out target, Kayak, is a U.S. company that is
viewed as poised to grow rapidly overseas.
Analysts said last week that Priceline’s
global and technological proficiency could
help accelerate growth of
Open Table, which was founded
in 1998, the same year as Priceline. Its 2013 revenue rose 18%
over 2012, to $190.1 million.
“Pre- and intra-travel decisions by individuals will likely become more important to
booking choices,” UBS analyst Eric Sheridan
wrote in a June 13 note to investors. “And
OTAs [online travel agencies] will need to
See PRICELINE on Page 78
See CRUISE on Page 78
WWW.TRAVELWEEKLY.COM JUNE 23, 2014
Arnie Weissmann:
24
build
.
IN OTHER NEWS:
USTOA launches consumer marketing effort
6
Biz-class airline to offer Newark-Paris at a discount
7
N. Y. boutique hotels aim for high style, low rates
26
THE TRAVEL INDUSTRY’S TRUSTED VOICE
USTOA President Terry Dale explains the
group’s new consumer marketing effort.
4
Flo Tours’ 13-night Italy trip includes four
nights each in Palermo and Sorrento.
73
River cruises on the Seine, Rhone and Saone
offer scenic treats for every Francophile.
70
We think airline competition has decreased,
and we think the traveling public knows it.
76
nt
This year’s ranking,
topped by two online
titans, continues to
reflect strong recovery.
Most qualifiers did
better than last year,
and the overall list grew
from 53 to 58.
Scan for
digital version.
IL
L
U
S
T
R
A
TI
O
N
B
Y
S
H
U
T
T
E
R
S
T
O
C
K
ANALYSIS
Richard Turen:
What mo
we ever s
76
