Cruise Industry Grew in 2009, Despite Economy

North American cruise lines, their employees and passengers generated $35.1 billion in gross output in the United States last year, bolstering the U.S. economy, according to a new report released by CLIA.

“Despite a protracted global recession, the North American cruise industry continued to make an impact on the U.S. economy in 2009,” said Terry Dale, CLIA’s president and CEO. “We are encouraged that the current economic climate is showing signs of improvement and cruise lines have been reporting strong activity thus far in 2010.”

According to the report “The Contribution of the North American Cruise Industry to the U.S. Economy in 2009,” direct cruise industry spending totaled $17.5 billion, which was felt in every state in the U.S. to varying degrees.

Cruising Benefits States Beyond Florida

Of the total 13.44 million CLIA member cruise line cruisers in 2009, U.S. ports embarked 8.9 million passengers, accounting for 66% of the worldwide total, reflecting the growth in U.S. homeport cruising.

Florida port embarkations grew by nearly 3% for a total of 59% of the U.S. total. Growth was fueled by gains in Port Everglades, Tampa and Jacksonville.

According to CLIA, industry expenditures typically correlate with the volume of cruise passengers, with the top 15 U.S. cruise ports accounting for 92% of U.S. embarkations. Direct spending increased in five states – Massachusetts, Maine, Louisiana, Maryland and Alabama, which reflected increased cruise activity in those states. Nevada and Arizona also benefited due to increasing numbers of residents taking cruises and increased direct cruise line spending.

Both Hawaii and Alaska saw declines in direct spending by cruise lines due to the redeployment of cruise ships, resulting in reduced capacity.

“We are encouraged, not only by signs that a turnaround is in progress, but also by the industry’s history of out-performing other tourism sectors and even the national economy,” Dale said.
 
Cruising Outperformed Other Sectors

The performance of the cruise industry was especially strong when compared with the economic environment within which it performed. Most of the negative impact of the global recession was felt during 2009 due to continuing job losses and rising unemployment. In 2009, discretionary spending on items such as transportation services fell by 3.7%.

However, 2009’s economic contribution by the cruise industry did represent a decline over 2008. Last year’s contribution of $35.1 billion represents a 12.8% decrease for the year. But over the last decade the cruise industry has outperformed the national economy and the travel and tourism sector, the report found.

Between 2000 and 2008, annual direct expenditures of the cruise industry increased by 85%, approximately double the 48% increase in annual personal consumption expenditures and the 40% increase in the annual direct output of the travel and tourism sector.

Even as of 2009, the cumulative growth in direct expenditures by cruise lines was still 50% higher than the cumulative growth in personal consumption expenditures and more than double the increase in direct travel and tourism sector output. In 2009, the cruise industry outperformed other travel and tourism sector segments including traveler accommodations and air transportation.

Net Capacity & Passenger Growth

The cruise industry also saw growth in the numbers of passengers last year. In fact, in 13.44 million people who cruised in 2009 represented a 4.8% increase over 2008. Additionally, net capacity (available bed days) among CLIA member cruise lines rose 3.8% in 2009, and average capacity use was 104.6% for the year.

However, even with the growth in cpacity and passenger numbers, total gross revenue declined by 11.4%.

Europe Capacity Rises

The North American cruise industry also continued to expand its presence throughout Europe. Cruise capacity in Europe grew by 8% from 2008, and has grown an astounding 75% since 2005.

2010 Looking Up

Cruise lines continue to report positive statistics for 2010 and beyond, citing improved revenue yields for the first time since 2008, strong booking volumes for the second half of the year and more effective cost-control measures.
 
“Given what we’ve been through, CLIA’s cruise lines can look ahead with a good measure of optimism,” said Howard Frank, vice chairman of the board and chief operating officer of Carnival Corporation & plc, and chairman of CLIA’s executive committee. “Demand is solid, advanced bookings are encouraging, there are significant growth opportunities around the world, and we’re seeing opportunities for better pricing strategies that, in the end, mean better results for the cruise lines and greater contributions to the economies where we operate.”

CLIA has been compiling an economic impact report since 1997.

For more information about CLIA, visit www.cruising.org.