RCI braces for drop in demand

RCI braces for drop in demand
By admin

Royal Caribbean is bracing itself for a drop in North American and European passengers in Australia next summer as it prepares for another huge spike in capacity.

The cruise line reported a higher than expected share of Australians on its voyages this season with a similar pattern likely in 2012/13.

Commercial manager Adam Armstrong said sales have gone well for next season but admitted the fall off from key overseas markets is creating “uncertainty”.

Such uncertainty comes at a time when the cruise line has more inventory to shift than ever.
The 2012/13 season will see a 70% to 80% increase in capacity for Royal Caribbean with five ships based in local waters.

“We are off to a good start and are broadly ahead of the same time last year. We are seeing demand across all five vessels,” he said. “The only uncertainty in our minds is the willingness of overseas markets to travel to our region.

“Our biggest challenge will be persuading Americans to come to Australia. The exchange rate doesn’t work in their favour. Australia is an expensive place to visit. We are anticipating a larger share of local guests.”

He predicted a 5% slip in passengers from North America and continental Europe.

The economic uncertainties in long haul markets is also creating a last minute trend with passengers booking three months out, far less than the traditional 12 month period.

Despite the increase in ships from one to three in 2011/12, Armstrong said it managed to “absorb the capacity without impacting yield”.

“We took an additional 60,000 people on holiday, sourcing them from across the world, not just from the local market,” he said. “We also had the first year premium on Radiance of the Seas.”

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