Robin Farley, an analyst for UBS Investment Research, recently talked about the recent poor stock market performance of the major cruise lines.  According to his research, their shares are tumbling because it has been more difficult for them to attract customers in the current economic climate, and investors are worried about their profitability.

Of interest to readers of this blog, Farley reports that their profits are being particularly hard hit in the Alaska cruise market.  Soft demand in the early part of the year forced the cruise lines to lower their prices.  The strategy worked to get guests to book tours, but at lower prices and thus lower profits for the companies.

In an interesting deviation, Royal Caribbean is resisting the temptation to offer discounts as aggressive as its major competitors, reasoning that even with slightly lower bookings it can make more money with higher fares.  It’s not a bad strategy, providing the other cruise lines don’t lure away too many of their potential customers with more attractive tours.  No matter how you look at it, though, the bottom line is that this season offers the most attractive Alaska cruise deals in recent history.

Source: Associated Press

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