Cruise lines change course to cut fuel
PORTLAND, Maine - When the 1,020-foot Explorer of the Seas cruises through North Atlantic waters next year, it'll spend more time off the coast of New England and less time near Canadian shores, and i
PORTLAND, Maine – When the 1,020-foot Explorer of the Seas cruises through North Atlantic waters next year, it’ll spend more time off the coast of New England and less time near Canadian shores, and it’s not because of better vistas.
Royal Caribbean International and other cruise lines have begun charting a new course in search of routes that eat up less fuel. Already one of the industry’s biggest costs, record fuel prices have cut heavily into the bottom line.
The impact of shifting itineraries will certainly have implications beyond the bottom line of cruise operators, creating winners and losers in port towns all along the way.
When cruise ships pull into Maine’s Bar Harbor, passengers spend an average of $105 each while ashore, according to a 2002 University of Maine study.
Explorer of the Seas can carry more than 3,000 passengers.
A ship even half that size could mean nearly $160,000 per visit. That means big money in Portland, which expects more than 30 visits next year from ships that can carry between 1,000 and 3,000 passengers.
While Portland stands to reap big rewards from the itinerary changes, port cities along Canada’s Atlantic coast could be on the losing end.
Canada’s Atlantic ports saw a 33 percent jump in cruise ship visits between 2000 and 2007, according to the Atlantic Canada Cruise Association.
“It’s disappointing to be losing a bit of business, but we realize that cruise lines have to make decisions based on best-business practices,” said Betty MacMillan, vice chairwoman of Atlantic Canada Cruise Association and business development manager of the port of Saint John, New Brunswick.
Royal Caribbean International changed the fall itinerary for the Explorer of the Seas along its northern route next year, shortening the distance between ports. Rather than sail from New Jersey to Quebec City and back, the ship will add stops in New England and go no farther than Halifax, Nova Scotia.
Fuel consumption was the primary reason, said Vice President Diana Block.
“You have to look at where the biggest benefit is financially with the least impact on the guests,” she said.
Annual fuel bills for cruise lines can add up to hundreds of millions of dollars and their ships can gobble up tens of thousands of gallons of fuel on any given cruise. The price of intermediate fuel oil, which most cruise ships use, has risen in tandem with crude oil.
Many cruise lines have added fuel surcharges to passenger bills, but energy costs continue to cut into profits and squeeze margins.
Cruise lines have also begun using energy-efficient light bulbs and new window coatings that reflect the heat from the sun to keep rooms cooler. They’ve also been using new hull paint that reduces a ship’s drag in the water.
And increasingly, cruise lines are altering itineraries so ships can slow down and reduce their travel distances, said Lanie Fagan, spokeswoman for the Cruise Line International Association. Carnival Corp., Norwegian Cruise Line and others have said high fuel costs are a factor in new routes.
“While it is paramount to offer a cruise itinerary that a guest wants to sail, the design and sequence of that itinerary can be evaluated to minimize the distance between ports of call and the speed necessary to accomplish that itinerary,” Fagan said.
In many cases, passengers will barely notice the difference.
Besides changing port calls on some routes, Royal Caribbean is reviewing its departure and arrival. In some cases, ships are leaving port half an hour earlier at night or arriving half an hour later in the morning — allowing ships to travel at slower speeds between ports.
Cutting speed cuts costs. For example, going 23 knots will consume twice as much fuel as going 15 knots for the new Solstice class of ship being launched this year by Celebrity Cruises, said John Krousouloudis, senior vice president for marine operations.
Even as cruise lines watched fuel prices ratchet up costs, some port cities had already seen an opportunity.
In Maine, a consortium that promotes Portland as a cruise ship destination is using high fuel costs as part of its marketing strategy.
Last fall, Discover Portland & Beyond Executive Director Sandra Needham met with half a dozen cruise ship companies in south Florida. She presented them with some mock itineraries for their ships detailing how much money they could save in fuel costs if they included Portland on certain routes.
Besides touting southern Maine’s attractions, Needham wanted to show cruise line executives how having port calls relatively close together could save them money.
By stopping at ports that are relatively close together, the ships could cruise at speeds of 12 knots or so rather than higher fuel-guzzling speeds, she said. Her itineraries showed that a few tweaks here and there could save cruise lines between $40,000 and $100,000 a week in fuel alone — and that was ten months ago, when fuel prices were lower.
She thinks the high price of fuel is one reason cruise lines have committed to bringing large ships, those with over 1,000 passengers, to Portland 34 times next year, up from 24 stops this year.