Cruise ships today are like floating cities, complete with green space, ice rinks and zip lines.

With each cruise line trying to one-up the competition, one wonders how these behemoth liners are affecting the bottom line.

In this time of recession and cost-cutting, are these mega-ships sinking companies into the red or are are the helping to sail through rough economic waters? Dena Rochwerger-Braun investigates the newest crop of cruise ships.

The phrase, “bigger is better” is the mantra in the cruise industry for the first decade of the 21st century. Royal Caribbean leads the pack with its just launched Oasis of the Seas, the world’s largest ship at 1,187 feet in length and a passenger capacity of 6,296 cruisers.  With 16 decks of fun, seven distinct neighborhoods, rock climbing and zip-lining this ship is not your grandfather’s cruise liner.

In comparison, Celebrity’s Solstice-class ships almost seem compact, carrying 2,850 passengers and Oceania’s new Marina is downright petite at just over 1,200 guests.

However, no matter how each line defines “big”, these amenity-rich cruise ships will carry on in 2011 with a slew of new mega-ships scheduled to launch.

At the end of 2009 there were 198 cruise ships sailing, and by the end of 2011 that number will jump to 217, according to the Cruise Lines International Association (CLIA), the cruise industry’s trade association.

All of the large ships launching today were planned during the heydays of the mid-2000s. As they were being built the economy tumbled, leaving cruise companies in a seemingly difficult place of trying to sell travel when people were having trouble simply paying their mortgage.

“We were lucky because many people still believed that a vacation is an inalienable right,” said Dan Hanrahan, president of Celebrity Cruise Line which launched Eclipse in April and will launch Silhouette in July 2011. “These Solstice-class ships generate a higher revenue per passenger because of their efficient design.”

Ultra-premium cruise line Oceania launches its first company-designed ship (the company’s current fleet uses refurbished ships from another line) in February 2011. Marina is double the size of other Oceania vessels, but with a capacity of only 1,258 guests, is considered a small ship by today’s standards. When bookings for Marina opened to past Oceania guests in January 2010, Oceania experienced its single biggest day of booking by past guests, filling half of Marina‘s winter season sailings. This broke their booking record by a whopping 26 percent.

Find the latest cruise news in our Cruise Travel section.

“Despite the economy, there was pent-up demand for Marina,” said James Rodriguez, Senior Vice President of Marketing for Oceania. Past guests were excited for the new ship because it was the first that was built by Oceania and included features like the first Jacques Pepin restaurant at sea and the Bon Appetit Culinary Center that will be the first hands-on cooking school on a ship.

However, even with strong initial bookings, sales and marketing have been impacted at each company.

“In the past we’d already be marketing for 2012,” admitted Rodriguez. “But right now we’ve had to back up and target market for specific sailings in 2011.”

Because Marina greatly increased Oceania’s sailing capacity, the company knew they would have to attract new cruisers, regardless of the economy. To fill remaining cabins the marketing team is aggressively targeting past guests and past cruisers that booked suites on lines like Holland America or Princess.

While Princess and Holland America discount their cruises to gain occupancy as the sailing date approaches, Oceania has stayed true to its policy since inception not to discount its product in that fashion. Instead it offers the best price when a new sailing is introduced. This deal offers cruisers two-for-one cruising and free airfare that amount to a 50 percent savings off brochure rates. Oceania raises prices as the sailing gets closer, going to a 48 percent early booking savings and finally a 40 percent rate.

Oceania’s goal is to sail at 100 percent capacity on each voyage. Obviously, the fuller a cruise is, the more revenue you generate, but it’s not just about selling cabins.  Since most other cruise lines offer rock-bottom deals on their cruise rate they have to make it up in other ways, sort of how your local grocery store draws you in with low-priced staples because they know once you’re in, you’ll buy more.

Other Ships Launching in 2011:

• Disney Dream-January 2011
• Carnival Magic-May 2011
• Seabourn Quest-May 2011
• Celebrity Silhouette-July 2011
• Costa Favolosa-August 2011

The fact is, cruise ships have to reach more than 100 percent capacity just to break even.  Obviously to achieve this the cruise line has to rely on onboard spending.  On a cruise the additional items in your basket include meals at specialty restaurants, soft drinks and alcoholic beverages, art auctions, spa treatments, cooking classes, casinos and Internet lounges.

And once you get to port the revenue opportunities continue with a variety of shore excursions the cruise line offers. Suddenly that all-inclusive vacation is looking less all-inclusive!

According to Hanrahan, Celebrity has had to change its marketing plans and get smarter about delivering their message in a more impactful way. Lisa Lutoff-Perlo, senior vice president of hotel operations, explained that this means online marketing.

“Right now, and in the future, affluent travelers are online and that is where our focus is,” she said. “With Facebook we engage with our current and potential guests and they become advocates for us.”

At the end of 2010, Celebrity harnessed the power of Facebook and Farmville in a promotion that rewarded people three Free Farm Cash for taking a quiz on what Celebrity Caribbean cruise was best for them.

Twenty percent of people then shared this link through their personal Facebook networks. The result was 30,000 new “likes” for Celebrity during the six-day campaign.

Despite the fact that these new ships were being built during the height of the recession, design plans didn’t waiver for either ship, and in fact, things were added, not subtracted to each ship.

On Marina the owner suites were built larger than originally planned and Ralph Lauren furniture was used throughout the suites. Additionally, all Oceania and Vista suites were designed by renowned residential interior designer Dakota Jackson and upgraded tranquility beds were put in all cabins.

While similar in design to other Solstice ships, Celebrity’s Eclipse did undergo some initially unplanned design changes including a new grand staircase that Hanrahan said he fought tooth and nail to implement. Other changes include more segregation between the spa and the gym, a revamped Cellar Masters wine bar, a living room setting in the Sky Observation lounge and new decor themes in Blu and the main dining room.

Surprisingly, overall, it seems like the cruise lines are reaping the rewards of larger ships with greater amenities and thriving despite the turbulent economic times.

By Dena Rochwerger-Braun for PeterGreenberg.com.

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