More capacity, more extra fees lift cruise industry

The cruise business is emerging from the down economy thanks to lower fuel prices, bigger boats and more fees for perks like alcohol and excursions.

Jeremy Hobson: Well banks may be in choppy waters right now, but it looks like there will be calmer seas ahead for cruise ships. Carnival -- the world's largest cruise ship operator -- will announce its quarterly earnings today.

Marketplace's Nancy Marshall-Genzer has a preview.


Nancy Marshall-Genzer: The cruising business appears to be slowly emerging from the fog of recession, for a couple of reasons. Low fuel prices are giving it a nice tailwind, and the big cruise lines are adding capacity.

Jaime Katz is a cruise industry analyst at Morningstar. She says, the big new ships cruise lines are buying every year equal more money.

Jaime Katz: It’s like if you build another Marriott you’re going to generate more revenue from that hotel, right? It’s kind of like a floating hotel. If you put more rooms in, you generate more money.

Katz says cruise sales picked up, along with the economy. Consumers are feeling more confident. Plus, they’re lured onto the big boats with rock-bottom prices. But, once they’re on board, here come the extra fees -- for alcohol, onshore guided tours, fancy dinners.

Ross Klein founded the website cruisejunkie.com.

Ross Klein: They’re continually working at new ways to get into people’s pockets and take out every little bit of money that’s left there.

And it’s easy: You just sign for it. The menu of extras keeps growing, so you can go into shock when you see your bill at the end of the cruise.

In Washington, I’m Nancy Marshall-Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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