Whither the cruise shipping industry?
published: Tuesday | February 10, 2004
Fritz Pinnock, Managing Director of the Lannaman & Morris Group of Companies
IN 1634, CHARLES I of Ireland ordered the construction of the largest ship in the world, Sovereign of the Seas. Royal Caribbean International drew on this bit of history in 1989, to christen its own 2,500 passenger 74,000-ton Sovereign of the Seas. Last year the Queen Mary II was launched as the largest vessel afloat. In two years' time, Royal Caribbean will be responding with the Ultra Voyager which will dethrone the Queen Mary II. Where will it end? And what impact will it have on us in Jamaica?
RECORD YEAR
In 2003 Jamaica had a record year by welcoming 1,064,642 cruise passengers. This represents a 29.3 per cent increase over 2002. In 2004 it is expected that this number will grow to 1,286,000 passengers. While this is tremendous, two cruise lines Carnival Cruises and Royal Caribbean Cruise Lines jointly account for just under 90 per cent of the passenger arrivals to Jamaica. This places the shipping lines in the driving seat to negotiate all value-added services based on their high volumes. Cruise lines are faced with increased costs in the face of cruise ticket prices falling by over 50 per cent. The only way to survive is to spread their costs over the entire supply chain in an effort to reduce costs while improving efficiency. With this Carnival and Royal have managed to maintain 15.7 per cent and 9.9 per cent return-on-investment respectively. This should be applauded and consider the lessons we can learn from them.
