West Coast cruising suffers another blow with Mariner pullout
Published Tuesday, May 4th 2010The 3,114-passenger, Los Angeles-based Mariner, the largest cruise ship operating Mexican Riviera itineraries, will move to the Mediterranean beginning in January. It was the third time a cruise line has announced the redeployment of a ship from the region in the last seven months.
Norwegian Cruise Line announced in March that the 2,240-passenger Norwegian Star would move to Tampa in October 2011, and in September, Carnival Cruise Lines said the 2,052-passenger Carnival Elation would move to Mobile, Ala., this month.
Those moves came on top of Princess Cruises eliminating 15 Mexican Riviera cruises this year and next, including the weekly itinerary that the line started out with in the 1960s.
The pullouts represent yet another hit to Mexico’s tourism industry, already reeling from last year’s H1N1 swine flu outbreak and ongoing fear sparked by outbreaks of drug-trade violence in border cities.
But the criterion for the cruise lines is simple economics.
A look last week at prices for three seven-day Royal Caribbean ships leaving within two days of each other in late June illustrates what the Mariner has been up against.
An inside cabin on the Voyager of the Seas sailing out of Barcelona started at $1,099, while an inside cabin on an older ship, the Rhapsody of the Seas, from Seattle to Alaska was $819; the Mariner’s lead-in price was $710.
"While the ship delivered great value to its guests on that itinerary, it will deliver superior performance for our shareholders as well as great value for our guests on the routes that we have announced today," Royal Caribbean International CEO Adam Goldstein wrote in a blog entry.
Several factors contributed to this price depression in the region. A ramp-up in capacity out of San Diego and Los Angeles, including ships as large as the Mariner and Carnival’s 3,006-passenger Splendor, occurred as not only the world economy hit a recession but, more significantly, as California struggled with insolvency.
Drug violence hits ports, too
Adding to those woes has been the surge in drug-fueled violence not just along Mexico’s border with the U.S. but in some cruise ports, as well, such as Acapulco.
What’s more, news of that violence has been intensely reported in the border areas of Southern California, the major source market for Mexican Riviera cruises.
Mike Hennes, of San Diego-based AskAboutTravel.com, recalls that not long ago, border towns like Tijuana and Puerto Nuevo offered tourists easy day trips.
"Not anymore," Hennes said. "The drug cartel has done a good job of making Mexico a not-so-safe place to visit. Every day there are shootings and stories of people being harassed, killed or kidnapped."
The Mexico Tourism Board responded in a statement asserting that visitor safety "has never had a higher priority than now. … Special attention has been paid to the areas most frequented by tourists such as cruise destinations, and crime-preventive strategies have been implemented and strictly enforced to ensure the safety of those visiting Mexico and its ports."
West Coast cruising has always been a challenge for cruise lines. Mexico’s ports are the easiest place to put ships relocating from summers in Alaska, but available destinations in Mexico are extremely limited compared with options in the Caribbean.
Enhancing port options to include stops such as Puerto Vallarta means long distances and high fuel costs.
Terry Thornton, Carnival’s senior vice president of marketing and planning, said that in 2008, fuel costs were eating 25% of the revenue on the Elation cruises.
"That’s not sustainable," he said. "With fuel costs so high, we needed to generate a reasonable cruise price."
Carnival, which has increased West Coast capacity by 80% since 2003 and has the most capacity out of San Diego and Los Angeles, has had trouble finding the right itinerary to get the demand and prices it wants in that market.
Thornton said that pulling out the Elation has helped yields for the Paradise and the Splendor.
To further shake up itineraries there, last week the line revamped the 2,124-passenger Carnival Spirit’s itineraries out of San Diego, putting the ship on five- and nine-day cruises instead of its previous eight-day itineraries.
Both cruises will visit Cabo San Lucas for two full days, and the nine-day cruise will also visit Puerto Vallarta, Mazatlan and La Paz.
Thornton said that the new itineraries will hopefully spur demand, and with oil prices on the rise again, save the line on those costs, as well.
"We saw that fuel prices were starting to go up again, so we made a change," he said.
Hennes also pointed out that besides getting better pricing on summer cabins in Alaska, cruise ships make much more money on shore excursions.
"The Mexican Riviera is still very popular, but I think that there were too many berths in that market," he said. "Someone had to pull out."
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