p14 cruise nov7 5/11/08 21:26 Page 14
news cruise
ttglive.com
Recent decisions by UK budget cruise lines have radically
altered the sector. Lee Hayhurst looks at the implications
All change for UK
three-star sector
Dingle blames cost rises
A SUCCESSION of decisions in the last month has
completely changed the UK’s three-star cruise
market.
for Ocean Village closure
First, Island Cruises announced it was to lose a
ship as it joined Thomson Cruises, then came
Fred Olsen Cruise Line’s decision to retire Black
Prince in 2009.
Last week’s Ocean Village announcement,
THE SPIRALLING cost of operating informal cruise Ocean Village was that it was heavily discounted, which coincided with the long-awaited decision
line Ocean Village was a key factor behind last claiming it was still achieving the revenues set on the future of its closest rival Island Cruises,
week’s decision to phase the brand out by 2010. out in the original 2003 business plan. was probably the least expected.
Carnival UK chief executive David Dingle, Dingle said older ships allowed operators to With older, less efficient ships, all lines in
whose remit also includes the P&O Australia target lower margins but that costs, in particular this budget sector have been struggling more
brand to which Ocean Village’s two ships will fuel prices, even given their fall since the summer, than most with the recent record fuel and flight
transfer, said the decision was “difficult”. were double what the business plan was based on. prices.
But he said he had to deploy ships where However, he also conceded that the UK However, Thomson Cruises managing director
they would be most profitable, adding that the market was mirroring that in the US, with David Selby believes the tour operator infrastruc-
current economic climate made him hesitate less entry-level three-star brands being squeezed out ture of Tui Travel means the line is well placed to
about making the decision. of the market by growing mainstream brands. consolidate its position as the UK’s number two
“Had we not had as much cost pressures – if “The mainstream brands will increasingly do cruise operator, behind P&O Cruises.
fuel prices and air prices had not been doing the job Ocean Village was doing,” said Dingle. He said he had decided to retain the Island
what they have been doing – maybe we may have “In the US market we have seen the economy- Cruises brand and livery on Island Escape for
hesitated a little bit more, but frankly you cannot priced brands disappear and the mainstream at least another year before the Ocean Village
deny the economics,” he said. brands absorb their territory.” announcement.
Dingle pointed out that Carnival’s planned Ocean Village was aimed at first-time cruisers That decision will be reviewed but Selby said
launch of new-builds across its brands meant and Dingle said it had helped to change percep- he did not want recent developments to leave a
that by the end of 2010 the operator would have tions. However, he added its high level of repeat gap in the market for a more informal, casual
more UK market capacity than it has now with bookers meant it did not feed as many new cus- product tailored specifically to UK tastes.
the two Ocean Village ships. This fact, he said, tomers to other Carnival brands as anticipated. “With Thomson you get a traditional service at
had “firmed up” his decision to shut the brand. a tour operator price,” said Selby, who aims to
He denied suggestions that the problem with ■ Carnival suspends dividend payments, p23 build on Island’s good relations with third parties.
14 07.11.2008
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