Cruise prices are likely to be kept at lower levels for another month despite volumes holding up for the start of 2009, according to Carnival UK chief executive David Dingle.
Prices are currently lower than those in the market this time last year but Dingle said the company, which comprises P&O Cruises, Princess, Ocean Village and Cunard Line, could sustain a drop in yields of 6%-10% this year without any impact on profits.
Speaking at an e-tid breakfast briefing this morning, Dingle said: “We have had a good start to the new year but we would like to see more evidence of how the year will turn out. It’s a bit early to say that volumes are strong enough to start easing prices up.”
Price levels are likely to be reviewed in a month’s time depending on how sales pan out during the peak period, he added.
The lack of capacity growth in the UK market this year will also ease pressure on the industry and help it survive what will be an “extremely challenging” year, he said.
Rival Royal Caribbean Cruise Lines UK managing director Robin Shaw told the briefing he was more upbeat about trading this year and said claims the sector would struggle to grow further were a “complete red herring”. He said: “We are bullish subject to what rates and yields we achieve.”
Both companies said the lack of US visitors to Europe this year because of the cost of air travel would be an opportunity for UK cruiselines.
Meanwhile, Travel Counsellors chairman David Speakman confirmed cruise revenues for agents had been hit by the tough climate. The group’s cruise revenues since Christmas are 4% down and in the three months before Christmas were 15% down, although overall for 2008 they were 1.75% up. He was confident the sector would be protected from the economic downturn because it offers an inclusive product and does not require consumers to change large volumes of holiday money into euros.