‘Green’ taxes could hit growth Carnival warns

Environmental taxes and regulation in Europe could hold back the continued expansion of the cruise market, the leading operator of cruises in the UK has warned.

writing in the annual Carnival UK Cruise Report, chief executive David Dingle said there was a danger that the “rapid growth of the cruise industry in Europe being stalled by regulation and taxation”.

The report included a bold prediction from Carnival Corporation chairman Micky Arison that the UK market would double to three million passengers in the next decade.

He believes the UK will follow the growth seen in the US with lines offering a wider variety of shorter cruises on higher quality ships offering a greater range of facilities onboard.

However, Dingle sounded a warning to European regulators about the impact they can have on an industry said to have been worth €30 billion and accounting for 300,000 jobs in 2008.

Arison acknowledged the environmental challenges the cruise industry faces but said the operator was lowering fuel consumption by 3%-4% a year by managing itineraries and reducing ships’ speeds.

But he said there was no “silver bullet” answer to this problem. “The fact is we need to have the technology catch up even though we are a small shipping sector and therefore a small market.”

Dingle said the signs for the UK cruise industry so far this year were promising with prices tightening after a tough 2009 and indications of an increase in early bookings.

He said improvement started to be seen in the final quarter of 2009 and that this had continued into 2010 when “we would hope the advance booking period will begin to lengthen”.

Although the lines in the Carnival UK family – P&O Cruises, Cunard, Princess Cruises and Ocean Village – are seeing more people research online the percent booked on the web remain in the low single figures.

“It could more up in the future but, significantly, it still remains at low levels in the US were the concept was embraced earlier, so we do not expect any radical change in this pattern any time soon.

“With cruising, at least, people still prefer the face-to-face transaction,” Dingle said.

Arison added the internet was having the biggest impact on the way cruise was being sold:

“This has already resulted in huge change. Just 10 years ago, most people looked for cruise advice from travel agents or newspaper and magazine travel sections – that has all gone.

“Now nearly everybody uses the internet for their research. Far fewer actually book cruises directly online but any travel agent still without online booking capability is going to loose out.”

 

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