High Seas: Cruise Industry Enjoying Rising Tide of Business

Aug. 30, 2007 — -- The cruise industry is trumpeting its accelerating growth in a new study that says it generated $35.7 billion in U.S. economic output and supported 348,000 American jobs.

Growth in revenue has been nearly 20 percent over the last two years, part of which may be due to the airlines' continued woes over delays, cancellations, tarmac stranding, mishandled luggage and complaints of poor service.

"The study first and foremost shows the health of the industry," said Terry Dale, president of the Cruise Lines International Association. "It continues to grow and the future is very promising."

This year, the association says, passengers will total a record-breaking 12.5 million. That's small compared to the 64 million passengers carried by U.S. airlines in the month of May, the most recent month for which the government has released statistics.

Still, virtually every cabin on every cruise ship is filled this year. Capacity, say analysts, is the only thing holding back more rapid growth. All the industry needs is more ships to attract more passengers.

"People are discovering cruising as a viable vacation option," said industry analyst Tim Conder of A.G. Edwards, "while 10 years ago it wasn't even on the radar."

Conder believes price plays an important role, with cruises ranging from as low as $100 a day to $300 a day.

"And there are many more alternatives for boarding cruise ships and they're growing," said Conder.

There are now 32 ports in the United States offering embarkation.

"Seventy percent of the U.S. population is within a two-hour drive of a cruise port," said the industry association's Dale, "and that cuts down on the hassle of flying."

The report, compiled by Business Research & Economic Advisors in Pennsylvania, found the economic impact of the cruise industry reached into every state, even those that are landlocked. Employment, however, was concentrated most in 10 states, led by Florida and California. Louisiana wasn't in the Top 10, but the state, particularly in the New Orleans area, received a healthy post-Katrina boost of $128 million and more than 2,000 jobs.

The economic impact of the cruise industry, the study says, has grown by 8 percent in each of the last 20 years.