Cruising in stormy weather

Ocean liner Queen Elizabeth II (QE2) is to leave Southampton for her final transatlantic crossing on Tuesday, after 39 years of service. The vastly bigger Queen Mary II (QM2), accompanying her on the trip, shows how cruising has changed during her lifetime – though current stormy economic conditions raise questions as to how the Cunard line is to fill the QM2, which at its launch was the largest ocean liner ever built.

The annual Seatrade Cruise Shipping convention was upbeat about the industry’s prospects in March, with industry figures at the time noting that the industry still achieved growth during the tourist slowdowns of 1990 and 2001. At the time, 36 new cruise ships were on order with a book value of 22 billion dollars. The key to the industry’s optimism was value: in contrast to the industry’s past reputation for luxury, (as represented by the transatlantic liners that are the QE2 and QM2’s forebears) the industry now markets itself as a rival to land-based package holidays, in immense vessels carrying thousands of holidaymakers. The industry has also attracted niche markets such as retirees on extended stays, given the costs relative to domestic care, and even the convention trade using the liners’ theatres and ballrooms.

However, since then, the prospects have darkened. The Carnival cruise line, owner of P&O, is sticking to its capital commitments, but has had to cut its dividend for next year in order to do so. It is one of a number of cruise lines offering steep discounts (Carnival is offered a huge sale to military personnel; most lines are scrapping fuel surcharges as fast as falling oil prices will let them). The rising dollar has cushioned US-based cruise lines for now, but the horizon is looking gloomy.