Bunker Price Affects Cruise Ship Placement

Princess will deploy the Sun Princess (pictured) out of Japan in 2013

For cruise companies looking to maximise revenues, the price of bunkers is a dominant cost and along with port costs, are considerations when choosing where cruise ships are placed, according to Jan Swartz, executive vice president of sales, marketing, and consumer services for Princess Cruises.

Swartz, who made the comments at the second annual Cruise Shipping Asia-Pacific event in Singapore, explained that ships are deployed to maximise profit contribution to the company and placing ships in Asia is based on a matrix of factors.

"That is a function of how we estimate consumer demand from over the 70 international markets we sell in," Swartz said.

"The facts we think about in deciding where we place ships and what itineraries are the most appealing are: first, how we maximize revenue, both net ticket price and on-board revenue, including shore excursions. Fuel is on our minds and a dominate cost, but also, port costs. We do a number of scenarios to evaluate where we should place our 18 ships."

The cruise industry is poised for a jump in growth in the Asia-Pacific region according to a panel of cruise line executives speaking at the event, and Carnival Corporation recently opened an office for Princess, Cunard Line, and Seabourn in Japan, and last week announced another office opening in Singapore to support Asia-based ships.

Princess said it will deploy the 1,990 passenger Sun Princess out of Japan in 2013 for a short season, aiming to carry some 20,000 Japanese passengers.

"We know that Asian countries, based on other industries, when they put their mind to it, they make it happen fast," said Swartz, commenting on port infrastructure.