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The cruise industry is looking to first-time customers to help bail it out of a market mired in declining bookings and deep discounting, even as $6 billion in new "mega-liners" are getting ready to hit the water.

An estimated 92% of Americans have never gone on a cruise, and that's an untapped market the industry aims to specifically target. More than $10 million in ad support is already planned.


All three major players-Carnival Corp., Princess Cruises and Royal Caribbean Cruise Line-are poised for expansion, with industry capacity set to rise 8%. More than 20 new $300 million ships are slated to be built in the next three years; in January 1998, a new, savvy competitor sets sail in Disney Cruise Line.

But the expansion is steaming right into the industry's worst new-passenger drought in 15 years. For the first six months of 1995, total passenger figures fell nearly 6% from a year earlier, according to the Cruise Line International Association, New York. That follows a poor 1994 season in which cruise passengers decreased 1% to 4.5 million.

This year's severe winter storms in the Northeast could lift cruise lines' prospects somewhat.

While January often experiences a wave of bookings, Carnival Cruise Line's were up 15% the week of Jan. 8 from the same time last year, said Jennifer de la Cruz, public relations supervisor.

January bookings at Cruise Line Inc., one of the nation's largest cruise-only travel agencies, are up 38% from last year, said Senior VP Don Lansky.

Royal Caribbean Cruise Line reported 18,168 individual passenger bookings on Jan. 15 alone, a 10% increase over the same day last year.

On the ad front, upscale Holland America Line, a unit of Carnival, on Jan. 7 launched a $10 million TV and print campaign aimed in part at drawing first-time passengers. The work from Elgin Syferd/ DDB Needham, Seattle, asks viewers, "When was the last time?" and closes with "Holland America Line. It's time."


The industry association also is working the first-timers. Last month, CLIA named Harris Drury Cohen, Fort Lauderdale, Fla., and Kirshenbaum Bond & Partners, New York, as finalists for its first-ever $10 million account.

The group's effort has grown in importance for many executives, some of whom, like those at Royal Caribbean, resisted and threatened defection in response to a similar proposal in 1982.

This time around, it's "extremely important to present a unified, positive light" to the public regarding cruising in general, said Rich Steck, manager of media relations with Royal Caribbean.

Cruise executives admit attracting first-time cruisers should be an industry priority. Then the individual lines can concentrate on selling amenities, ports of call and itineraries.

That the cruise association has convinced the lines to buy into a $10 million marketing campaign points to agreement among industry leaders that something must be done, said Murray Markin, president of Strategic Decisions Inc., a Boca Raton, Fla., consultancy.

If the lines are able to boost first-time cruisers through aggressive marketing that focuses on product and not price, then discounting likely will relax.

Consumer loyalty has been lost as product positioning has given way to a price-intensive message, said Mr. Markin.


"Tactical advertising has blurred out brand positioning," he said. "What CLIA is doing is saying something hasn't worked. It will be interesting to see the nature of the message that comes out [from the association's effort]. You can affect short- and long-term strategies if you do it right."

Disney Cruise Line sounds unconcerned, as the new player focuses on developing its brand. The line has worked with Young & Rubicam, New York, and Harris Drury Cohen on preliminary product development.


It's likely Walt Disney World agency Leo Burnett USA, Chicago, will handle the account without review, said Disney Cruise Line President Arthur Rodney.

While attracting first-time cruisers is "the industry problem right now," discounting and strong advertising won't solve the problem long term, Mr. Rodney said. Disney will focus on the cachet of its name and not the $4,000 to $5,000 it will cost a family of four to take a seven-day cruise-and-theme park vacation.

"We feel we're differentiated because we're Disney," Mr. Rodney said. "We will attract first-timers because it's Disney, and eventually that's going to help the industry."

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