The other two major listed cruise companies, Carnival Corp and Norwegian Cruise Lines, also saw double-digit falls in their share prices in the wake of Royal Caribbean’s announcement, despite having yet to reveal their own figures.

But speak to UK-based specialist agencies and cruise lines about the British market and the sector appears to be performing well during the wave period, with words such as “positive” and “optimistic” being touted.

Agents say that cruise is considered by consumers to be a “safer” holiday option following terrorist attacks in Paris, Tunisia and Turkey over the past few months.

Ben Bouldin, sales director Royal Caribbean International UK and Ireland, said the line had seen a “strong start” to 2016 with sales “tracking in line with our expectations”.

“The first two weeks of January were challenging for cruise but then the second two were very strong, and this has continued into February”

Claire Brighton, Advantage Travel Partnership

“Current trends we’re experiencing include an increase in British holidaymakers who are flying to Europe to cruise – in fact there’s been a 35% increase in Brits cruising from Europe rather than departing from the UK,” he said.

“The top three departure destinations are Barcelona, Rome and Venice and a two-week cruise in the Mediterranean is currently our most popular offering.” Princess has also reported its best January for UK sales, with overall bookings up by 40% year-on-year – figures that have been driven mainly by agents, with trade sales rising 50% compared with January 2015.

On the agency side, Claire Brighton, senior commercial manager at the Advantage Travel Partnership consortium, said: “The first two weeks of January were challenging for cruise but then the second two weeks were very strong, and this continued into the first week of February. It has been improving as we have gone through the period.”

Med cruising
One of the areas most under the spotlight is the Mediterranean, with itineraries around the eastern Med enjoying less popularity following the terrorist attacks in Turkey.

There has also been a decline in demand from US holidaymakers for fly-Med cruises, generally due to nervousness about travelling to Europe in the wake of the Paris and Istanbul terror attacks, which is creating extra capacity in the UK market and putting downward pressure on cruise fares.

Research from independent cruise retailer Planet Cruise has compared this year’s fares to 2015 prices and found “significant savings” on like-for-like voyages, particularly for European sailings, which Planet Cruise said were around 29% cheaper this year.

“The elephant in the room is Turkey. German tourists were killed in Istanbul last month. The Americans are not coming over and that has an impact on prices.”

Graham Dullop, Cruise Club International

The cruise specialist also found “huge” savings on trips around the eastern Mediterranean with the prices for one 11-night cruise, including flights from London, falling by around 42% year-on-year.

Carnival UK cruise chiefs told TTG last month that “nervous” US tourists were bypassing the whole of the Med, not just parts of the region, which could create a “capacity bubble”. They added however that this was creating an opportunity for UK agents to sell more fly-cruises in the Med to make up for the loss of these US passengers.

Simone Clark, managing director of Iglu.com, which also owns Planet Cruise, agreed with these views: “For the eastern Med, we are seeing less demand but that’s uniform across the travel industry, not just cruise,” she told TTG.

“The fly-Med American ships are seeing a drop in demand from the US. This has created more availability and stock in the UK, which is creating good deals. “The Americans are sticking to the Caribbean rather than coming to Europe and consequently there is more availability in the Med for lines that sell into the American market.

If you look at Carnival Vista [Carnival Cruise Lines’ newest ship which launches in May], for example, there are amazing prices in August.” Clark added there could be more deals later in the year as the summer sailing season approaches because terms and conditions in the US allow passengers to cancel their bookings at the last minute.

“There may be more to come as American cancellation policies are different to the UK, which allows them to cancel very late,” she added. “There could be potentially more capacity and deals opening up for dates later in the year.”

Graham Dullop, director of Cruise Club International, agreed that prices were “softer” this year, which he said was “100% down to geopolitical events”. “The elephant in the room is Turkey,” he admitted.

“German tourists were killed in the middle of Istanbul last month. The Americans are not coming over and that has an impact on prices.” Pricing trends Trying to find out exactly what has been happening to cruise prices year-on-year is notoriously difficult, particularly as the majority of operators have moved to a “fluid” pricing model rather than having an official cruise price.

City analysts at Morgan Stanley have tried to compare average cruise fares with the previous year by “scraping” online prices. The broker’s latest research found that “pricing slowed in the new year particularly at Costa, P&O, Princess and Celebrity”. Although it added: “We caution about reading too much into webscraping given calendar/channel shifts, but this data is concerning.”

Morgan Stanley said that prices for P&O fell by 6% year-on-year based on fares for early February on sailings departing between March and November 2016. TTG approached P&O for comment, but a spokesperson said the line did not disclose statistics and booking figures.

Miles Morgan, owner of Miles Morgan Travel, said his agency chain had seen a fall in the average price for its P&O sales compared with last year, while the current overall trend across all holidays so far this year has been for higher prices. “Our average selling price for P&O is substantially down on last year, whereas our overall average selling price has gone up significantly. Britannia takes 4,500 passengers – that’s a lot of passengers,” he added.

Other agents though were more positive about P&O. Iglu’s Simone Clark said: “Our trend with P&O has been that people are booking a bit earlier – historically it has all been about the lates market, but we have seen fewer late deals this year.”

Last-minute discounting
The cruise industry has been working on ways to avoid dumping late unsold cabins on the open market and sidestep the need to rely on last-minute discounting. Royal Caribbean Cruises Ltd (RCCL), which also owns the Celebrity and Azamara brands, has tweaked its “price integrity” policy, which now applies across the UK and Ireland as well as North American markets.

This policy means the company has pledged not to introduce any new discounts within 30 days of departure for all cruise lengths apart from three and four-day cruises. Previously the no discounts policy varied depending on length of cruise.

RCCL chief executive Richard Fain said the company was “determined” to avoid the kind of last-minute discounts that “cheapen our brand and upset our loyal customers”.

Meanwhile Princess Cruises’ head of sales Rachel Poultney told TTG its pricing policy during the wave period had been designed to “keep things simple” with “an easy to understand campaign that resonates well with both agents and consumers”. “Princess has taken the initiative to conservatively invest in our price points in order to drive earlier business – this will keep us away from the lates arena, and ensure the partnerships we have with our agent partners are mutually profitable,” she added.

Iglu’s Simone Clark said cruise lines had recognised that the days when passengers paid a premium to book their cruise “really early” were over. “This has made the launch period prices more realistic,” she said. Miles Morgan added:

“From an industry point of view, the challenge is to get people to book earlier and not wait to get a deal. If that does become a reality, then that’s not good for the industry.” Having plenty of empty cabins can also be a boost for agents, as it increases cruise lines’ reliance on selling through the trade. “When the lines are bubbling along at 80% full, do they need the agent?” said Cruise Club International’s Graham Dullop.

“But if they are light, and customers are not ringing or using the other channels of sale, then agents should prosper. “More capacity is a godsend to the consumer – it will bring in new-to-cruise customers who will want to try the new ships. It’s wonderful news as it will expand the market.”