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Princess Cruises Looks to Mega-Ships in Quest for Continued Growth


Los Angeles recently got a new 14-story, $300-million resort hotel--but only for a day or so. Then it sailed for Alaska.

The Dawn Princess is one of world's largest cruise ships and the latest entry by Los Angeles-based Princess Cruises in the bigger-is-better competition that has developed among the leading cruise lines.

The Dawn Princess made a brief stop in San Pedro two weeks ago during its maiden voyage that began in the Southern Caribbean (its winter itinerary), headed through the Panama Canal and proceeded to Alaska (its summer itinerary).

Princess Cruises, with nine ships, is in the middle of a $1.6-billion expansion that began with the Sun Princess, which debuted in December 1995. The expansion will leave the cruise line with four mega-ships by the end of the decade and the capacity to carry 750,000 passengers a year. Today, about 450,000 people sign up for a Princess cruise each year, and Princess Cruises expects that number to grow.

That's a long trip for a company that started in Los Angeles in 1965 with one small and aging ship cruising to Mexico. Blame it on the "Love Boat," that long-running television show of the 1970s and 1980s that lured thousands to the high seas.

"People had this dream about faraway places and fun and romance, and they took a cruise and, lo and behold, that's what it was like," said Peter Ratcliffe, president of Princess Cruises, which since 1974 has been owned by London-based Peninsular & Oriental Steam Navigation Co., one of the world's largest shipping companies.

The Dawn Princess is a twin to the 77,000-ton Sun Princess, which was briefly the world's biggest cruise ship until it was topped by Carnival Cruise Lines' Destiny (101,000 tons) and Celebrity Cruises' Galaxy (77,713 tons), which also stopped at San Pedro last month. (Don't look for the Destiny any time soon; it's too fat to make it through the Panama Canal, so it spends its time in the Caribbean.)

Designers of the Sun Princess and Dawn Princess sought to minimize the fact that 1,950 passengers and 910 crew members are packed into the ships by creating intimate spaces in a variety of lounges, bars, restaurants and seating areas, and a record number of cabins with private balconies that encourage lounging around your own room rather than the public spaces, Ratcliffe said.

The competition is fierce among cruise lines to come up with new ways to lure not only cruise veterans but also the younger customer who might not have considered a floating vacation. Surveys found that younger consumers avoided cruises out of the belief that they were too expensive and the fear that they would be boring, Ratcliffe said.

To respond to the first concern, Princess in February announced a financing program, called Love Boat Loan, with repayment over as long as 48 months. As for the second worry, "we decided we had to build a ship where you couldn't possibly get bored," Ratcliffe said.


The Sun Princess pioneered 24-hour dining, and, like many others in the industry, the Sun Princess and Dawn Princess are packed with amenities such as a Broadway-style theater, extensive fitness facilities, specialty eateries and separate programs and fun zones for youngsters and teens.

Princess is now the world's third-largest cruise line after Carnival and Royal Caribbean Cruise Line, and all three agree that business is very good right now. More than 4.5 million people took cruises last year, and the Big Three of cruising amassed more than $1 billion in profit among them, Ratcliffe said.

In the Los Angeles area, Princess employs about 1,000 people, and the company estimates that it generates about $100 million in economic benefits for the region.

Nancy Rivera Brooks can be reached via e-mail at nancy.rivera.brooks@ or by fax at (213) 237-7837.

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