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Ships Trying to Get Everybody on Board

Cruise lines, in a market crowded with luxury vessels, hope short-haul trips and added attractions and services will broaden the appeal of the high seas

June 29, 2003|Jerry Hirsch | Times Staff Writer

A conga line of 130 crew members snaked from a dock in San Pedro and up the gangplank of the cruise ship Monarch of the Seas.

The crew chatted in Danish, Spanish and Italian as they hurriedly moved 1,150 chairs, hand to hand, into the belly of the ocean liner, past yet-to-be installed rolls of teal carpeting, up a curved stairway and into the main dining room.

Workers elsewhere on the ship were unpacking elliptical trainers in the aerobics studio, laying floor tiles in the spa and polishing countertops in the updated food court. The crew had been working for three weeks and had just 48 hours left to finish renovating the 12-year-old Monarch before it started sailing June 6 on weekend cruises to Mexico.

For Miami-based Royal Caribbean Cruises Ltd., completing the Monarch's makeover on time was more than a directive from the accounting department. As the $13-billion North American cruise industry grapples with fickle demand, operators are eager to broaden their appeal beyond the middle-aged and retired couples who have been the bread and butter of the trade.

For The Record
Los Angeles Times Tuesday July 01, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 29 words Type of Material: Correction
Cruise industry -- An article in Sunday's Business section about the cruise industry misstated the name of Royal Caribbean Cruises' executive vice president. He is Adam Goldstein, not Alan.

An oversupply of luxury vessels and steady price-cutting have left cruise lines with too much capacity and too little room to raise prices. In Southern California, the two biggest cruise companies, Royal Caribbean and Carnival Corp., are betting on those who live within driving distance of Long Beach and Los Angeles harbors and wooing them with short-hop luxury cruises to Mexico.

As one advertisement for the Monarch puts it: "Go away for a few days. Come back looking younger. Typical L.A."

Planning a cruise isn't what it used to be. Just a few years ago, people typically booked 90 days or more before departing. Now, 45 days is about as far in advance as anyone will reserve. "People wait until the last minute now because they think they will get a better deal," said Fred Wengert, a travel executive at Automobile Club of Southern California.

That has created a game of economic chicken. So far, consumers are winning.

Cruise prices are at their lowest level since the mid-1990s, said Robert Simonson, an industry analyst with William Blair & Co. in Chicago. And fares, even for the same dates and on the same ship, change almost daily as the cruise lines try to match prices with demand.

"If you don't sell that berth scheduled to go out Aug. 10, you are not like an airline or hotel with the ability to sell it on Aug. 11 or 12," said Jay Lewis, a cruise industry consultant in Miami. "You are going to have to wait until the ship gets back to port to sell it."

To regain control, the cruise lines are spreading out -- demographically and geographically. As recently as two years ago, there were just six major cruise ports: Miami; Fort Lauderdale, Fla.; Cape Canaveral, Fla.; Seattle; New York; and Los Angeles. Today, there are at least 17, including San Francisco, Houston and Boston, and more than half of the nation's population lives within a five-hour drive of one of them.

To entice more locals, companies are adding short-haul cruises and billing them as convenient weekend getaways for working couples and busy families. More than 600,000 travelers sailed on cruises of five days or less last year, a 16% increase from the previous year, according to industry trade group Cruise Lines International Assn.

An Untapped Market

Royal Caribbean has pegged Los Angeles as crucial to its quick-turnaround strategy. In radio ads and billboards, the company is pitching the Monarch as a trendy venture for Angelenos looking for a new travel experience.

After taking the 2,390-passenger Monarch off its Caribbean route, the company spent $25 million to redesign the ship. A 30-foot outdoor rock-climbing wall, enhanced spa and gym services and a sushi bar were added, all with Southern Californians in mind.

Alan Goldstein, Royal Caribbean's executive vice president, said he sees plenty of room for growth in Southern California, where the cruise line's target market of parents in their early 40s with a household income of more than $50,000 has gone largely untapped.

Although only a dozen years old, the Monarch is an aging asset in an industry that by the end of the year will have seen 27 new ships launched since the beginning of 2002, according to the Cruise Lines International Assn.

That's why the Monarch has suffered a series of demotions over the years. First it was transferred from the high-profit seven-day Caribbean routes, which sail from San Juan, Puerto Rico, to make shorter cruises out of Fort Lauderdale. Now it's relegated to three- and four-day sailings along the West Coast, a market that has alternated between the sedate senior crowd and raucous party cruises.

"It's all a question of how you arrange 19 ships around the world in the most profitable manner," Goldstein said. "We are placing ships in markets that are an easy drive as alternatives to the existing quick getaways that are already in the market."

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