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Why is the Caribbean cruise market soft?

If you’ve been reading my blog entries or following the cruise industry in general, you must have noticed by now that everyone is talking about the Caribbean. Specifically, people are concerned that consumers are losing interest in the Caribbean. Sales have been slow, and pricing has plummeted to new lows.

What’s the cause of this apparent disinterest in glistening turquoise waters, soft white-sand beaches, and days full of sun? Ah, that’s where the debate lies. In a recent article for Travel Weekly (registration required), an industry magazine geared toward travel agents, writer Johanna Jainchill poses the question “is the problem economic or structural?”

The cruise lines like to think the problem is a temporary economic dip. They cite rising gas prices and interest rates as the reason middle-income America has less spending cash for vacations. They are now trying to lure first-time cruisers, for whom a Caribbean cruise would be a new rather than a tired experience, with short cruises and low fares.

Others believe the problem is not a temporary one, but a structural one due to overcrowding in small port towns on the islands. Jainchill cites Kenneth Atherley of the Barbados Port Authority who wrote about potential problems in the Caribbean cruise industry as early as 2003. “The cruise sector has opened up an opportunity for heavy use and instantaneous cash flow from short-term but intense use,” Atherley wrote. “Unfortunately, in some cases, this added pressure onto land-based facilities, resulting in congestion, scheduling, and control problems, which have affected visitor satisfaction.”

Still more people blame a diverse array of factors, such as fear of hurricanes, a warm winter, and new passport regulations for the softness in the Caribbean market. Jainchill doesn’t answer the question she sets up in her headline, but the takeaway message for consumers is apparent: Until industry executives can clear the hurdles of all possible causes for a weak Caribbean, consumers will continue to benefit from bargain-basement prices for island sailings.

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