Richard Fain, chairman and CEO of Royal Caribbean Cruises Ltd, poses aboard the Oasis of the Seas, the world's largest and newest cruise ship in Fort Lauderdale, Florida, November 20, 2009. REUTERS/Joe Skipper

But a wave of new ships ordered during the boom times are now coming on line and that will put pressure on rates, a boon for bargain-hunting passengers but not so much for cruise line earnings.

No. 1 cruise line Carnival's newest and biggest ship, the 3,652-passenger Carnival Dream, starts regular cruises to the Caribbean in December out of Florida's Port Canaveral.

Royal Caribbean will launch the Oasis' twin, Allure of the Seas, next December, one of eight new ships due out in 2010 industrywide. Capacity is expected to rise by 7 percent next year, and a little less than that in 2011, before settling.

No new ships have been ordered for now 20 months and that hasn't occurred in the last 25 years, McLeod said.

New ships tend to attract passengers at the expense of the older ones. Cruise lines are compensating by moving their older ships away from weakening markets like Hawaii and Alaska and into growing ones like Europe and China, like a giant chess game, playing with boats, he said.

Bookings aboard Oasis have been strong because it offers so much of everything, Royal Caribbean's Fain said.

Seven-night cruises start at $1,049 per person, double occupancy, for an inside cabin and run up to $16,659 per person for the two-story Royal Loft suite, which includes a baby grand piano and private 843-square foot balcony.

We're getting much higher rates than I certainly would have expected even a year ago. The reception has just been overwhelming. I'm feeling pretty good right now, Fain said.


Royal Caribbean will see some cost savings from economies of scale on Oasis. Fuel consumption per guest is 30 percent lower than on an average ship and engine room staffing, for example, is not significantly bigger than on other ships because that part of the Oasis is very compact, Fain said.

Other costs are higher because it takes more staff to run its 24 dining venues and service 4,100 toilets, 42 elevators and 4,500 air conditioning units.

On another ship we don't have high divers and horticulturists, Zamboni operators, Fain said, referring to equipment used to groom ice-skating rinks.

Oasis' size limits its itinerary. It will stop initially at the Caribbean ports of St. Maarten and St. Thomas and the Bahamian capital of Nassau, a week-long voyage that will later alternate with western Caribbean sailings.

Those ports dredged and deepened their approaches and built new docks to accommodate Oasis, while Port Everglades built a whole new terminal to handle the crowd of passengers who will leave the ship as a new horde embarks.

The mega-ship has its detractors. Travel writer Arthur Frommer wrote in his Budget Travel column that it exists to cater to more of those people who are unable to entertain themselves, those arrested personalities who rely on constant, massive, outside distractions to ward off depression.


Other lines are cheering the Oasis, figuring the publicity bonanza will lift all cruise ships. Boutique lines are pitching their smaller more intimate vessels as the anti-Oasis.

Yes they have the most space but they're also putting the most number of guests into that space, said Steve Tucker, vice president of North American field sales for privately held luxury line Silversea, which launches its all-suite Silver Spirit on a 91-day voyage from Port Everglades in December.

At a tenth the size of the Oasis, Silver Spirit offers a private butler in every stateroom and carries 540 passengers.

Fain, meanwhile, is looking at the forward bookings and smiling while fending off the inevitable question of whether Royal Caribbean will build a ship even bigger than Oasis.

I'm not saying it couldn't happen but one would need a reason, he said. If somebody comes up with an idea that we think would be appealing to our guests, we would certainly look at it.

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