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June 8, 2014

Cruise lines find new business tough

NEW YORK — Getting people onboard a cruise ship can be tough. They fear bland buffets, debilitating stomach bugs and a crowd whose idea of excitement is playing canasta.

Even the CEO of the world’s second-biggest cruise line admits he once avoided cruises.

“I had always thought ‘I’m too sophisticated for this,”’ says Richard Fain, CEO of Royal Caribbean.

That initial hesitation — over what Fain calls “old myths” — is a big stumbling block. But at the moment it’s far from his only challenge.

The cruise industry has suffered through a difficult few years. Like airlines and hotels, cruise bookings plunged during the Great Recession. Then, just as the industry was recovering, Carnival Corp.’s Costa Concordia sunk off the coast of Italy, leaving 32 passengers dead. A series of well-publicized mishaps, including fires, electrical failures and outbreaks of vomiting and diarrhea, also left vacationers wary.

Fain tries to lure reluctant cruisers with onboard ice skating, rock climbing, a surfing machine and skydiving simulator. He’s also boosted advertising and incentives to travel agents, although he acknowledges that the best promotion is when happy vacationers get off his ships and rave about the cruise to family, friends and co-workers.

“Nobody takes a cruise simply because they saw an ad,” he says.

Overall, his method is working. Royal Caribbean carried 4.9 million passengers last year, compared with 3.5 million a decade ago. And he sees untapped potential. Only one in four Americans has tried a cruise, while millions of people in China are just now embarking on their first vacations.

Fain, 66, didn’t take a cruise until 1980, a year after joining Royal Caribbean’s board. The company’s then-president called Fain presumptuous for making suggestions without first taking a cruise. To negate that criticism, he and his wife took the shortest, cheapest cruise they could find: a three-day trip to the Bahamas. They were hooked.

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