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Some choppy seas are ahead for the cruise industry

Despite cutbacks, Royal Caribbean Cruises' chief sees a bigger role for Tampa's port.

By Steve Huettell, Times Staff Writer
Published May 25, 2007


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As chief executive of Royal Caribbean Cruises, Ltd., Richard Fain oversees the world's second-largest cruise company, with three major brands and a fleet of 35 ships.

His company has a diminished profile in Tampa, going from three ships - two Royal Caribbean and one Celebrity Cruises - two years ago to a single Royal Caribbean ship, Grandeur of the Seas, for the upcoming winter season.

Fain is in Tampa tonight to accept an award from the local World Trade Center.

He spoke with the St. Petersburg Times on Thursday about the cruise ship industry's slow start in 2007, fallout from bad publicity and the company's plans for Tampa.

Cruises look like a bargain, with one of your competitors selling three- and four-day Caribbean cruises as cheap as $229. Is weak demand forcing lines to sell their product so cheap?

Fain: People in the industry use fairly dramatic price reductions to fill in a weak period. We always basically fill the ships and pricing ends up being the way we do it. This year started out with a disappointing level of bookings. It strengthens in the latter part of the year. We were flat or a tiny bit down.

Why the slowdown?

I think it's a series of factors. The economy is a factor, some of the (bad) publicity is a factor, and I think there is an unknown factor. It's like when you're driving to work and you get in a traffic jam. You get going again and there's no evidence of what caused it.

The industry has definitely has its share of bad press over ship accidents, passengers going overboard and outbreaks of rotavirus. How big an impact has the publicity had on business?

Fortunately, today there's a large group of people who are somewhat knowledgeable about ships. Last year, the industry carried about 10-million people (in North America). They realize the hype generated on some of these subjects and take it with a grain of salt. There is some impact on those who have never cruised.

How big a hit has the company taken on rising oil prices?

Fuel has been a huge problem for us. Its cost us more than $200-million a year. We've taken a lot of steps to conserve. There's new Teflon hull coatings that let ships glide through the water better. There are computerized navigation systems that allow the captain to track the best (ocean) currents. We've changed halogen light bulbs with LED bulbs, about 30, 000 on four ships.

Your company has severely cut it presence here. What's in the future for Tampa?

Tampa's a very attractive port. It's convenient. There's a large local market. Tampa's a place we'd like to grow. There are so many itineraries and not enough ships ... .

Any chances of a ship sailing from Tampa year round?

The reality is there are a lot more summer markets. Europe is extraordinarily hot. The same with Alaska. But we've been a major player in year-round Caribbean sailing and will continue to grow.

Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

[Last modified May 24, 2007, 23:03:08]


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