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Cruises Are Afloat Despite Caribbean Fatigue

Stocks in this article: CCL RCL

What is CruiseCompare's Cruise Index and how did it come to be?

Levinstein: We started in 2003 and have been at it for a little more than eight years. The way the system works is that the consumer comes to the site, they select a cruise and then we have about 350 different travel agencies that can see that user's trip request. They respond with competing quotes so the consumer gets four, five or six responses and can compare them and contact the agent who gave them the best quote.

The agencies who book a cruise on our site then report the booking to us and we charge them a percentage based on the value of the package sold. What struck us about this was the data: We have 25,000 to 40,000 quote requests coming through a month, depending on the season. There's a lot of information there about what consumers preferences are, what they're asking for and the median time between when the consumer books and when the ship sales. That tells us a lot about the market and whether they're requesting shorter cruises or longer cruises. It tells us which luxury cruises are getting the most requests, which river cruises are getting the most requests, and we thought it was useful data, so we put it into our monthly trend report.

The problem with writing about something as complex as the cruise market is, "How do you know in one number where things are?" For the cruise index, we decided to take just one cabin type outside , just the six major U.S. lines, which is what the investment community is most invested in, and give a snapshot of where pricing was and an outlook for the future.

The index spiked from last November to this month. Where did that demand come from?

Levinstein: When you look at cruise prices today and what's sailing today, the last 18 months have gone into establishing that because people look ahead. If you want to go back a year and go back another 18 months, things were a lot less stable.

Looking back, it's been an interesting period. There are a lot of people who are unemployed right now and there were a lot of people who lost a lot of money in the stock market, but most of our customers are in the upper third of the economy or at least the upper half. For the folks who are older -- and cruisers tend to skew older -- they've been through the crash and even though the markets are still going wild, people have learned from 2008 and are more diversified and have less risk. They've become used to the new reality on that end and they're spending money.

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