High Seas, Low Prices

By Chris Palmeri

High Seas, Low Prices

Whether you're a veteran cruise hound or a landlubber who's never sailed, there has never been a better time to jump onboard. The cruise industry, reeling from the economic crisis and a sharp drop-off in passengers, is offering some incredible deals.

How incredible? Industry leader Carnival Corp. is offering four-day cruises out of Miami in mid-December that stop in Key West and Cozumel for just $149 a person. The company is even throwing in $25 in credit to spend on the ship, according to online travel agency Cruisedirect.com. Since that price includes meals, it's cheaper than staying home and eating out for four days. "There's no question, the consumer is shaken," says Carnival Chairman and Chief Executive Micky Arison. "That has affected our business."

Ocean liners used to be a method of transportation, a way to get from New York to London. Pleasure cruising was for the idle rich. The modern cruise industry was born in the 1960s, when such companies as Princess, Norwegian Cruise Lines, and Royal Caribbean were founded to give regular folks a sojourn at sea.

This year 12.8 million people are expected to take a cruise in North America, a fourfold increase since 1990. The industry generates $17.6 billion a year in revenue. The typical passenger is still older and wealthier than most—49 years old, with a household income of more than $104,000 a year. But the industry has evolved to attract a broader base of customers with newer, bigger, and more exciting ships. What follows is a brief cruise through modern cruise history.