Port of Seattle Has Record Year; Almost One Million Cruise Passengers Pass Through

[haha]

I know many of you take Alaskan cruises. You are obviously not alone. Even in this recession year the Port of Seattle sets all time record for numbers of Alaskan cruisers.

Local News | Port of Seattle: Record year for Alaska cruises | Seattle Times Newspaper

Ha

 

[ERD50]

I'm constantly amazed that we are in this terrible recession with extreme unemployment, yet I seem to see all sorts of signs of people spending money. Upper scale restaurants are packed, etc. Clearly, that is an observation, and has no real meaning data-wise, but your article provides some data to back that up.

One theory - of the employed people I know, many are working a lot of overtime (another observation, not data). This is pretty typical in a recession, employers are hesitant to hire people if they think they may just need to let them go if they don't see signs of extended growth. So maybe those people with jobs are getting OT are giving themselves a well deserved "luxury they can afford"? Cruises are not cheap, but many feel they get a lot for their money. Maybe this outweighs a larger group with less discretionary funds (if you spread that OT at straight time across more people) that would not have the "extra" for that cruise?

-ERD50

 

[FUEGO]

I'm constantly amazed that we are in this terrible recession with extreme unemployment, yet I seem to see all sorts of signs of people spending money. Upper scale restaurants are packed, etc. Clearly, that is an observation, and has no real meaning data-wise, but your article provides some data to back that up.

It's a cheap luxury. At least for us. We are leaving for a week in the Caribbean and the cruise fare itself was under $1200 for our family of 4 in a balcony room (upgraded). Deals abound and prices are cheap.

I think about all the unemployed too and wonder. But I also remember that with a ~10% unemployment rate, that means that 90% of people have jobs (ok let's say 80% have optimal jobs so we don't get into a U3 vs U6 debate over the definition of "unemployed"). In other words, the great majority of people are still gainfully employed, some of which have received raises and bonuses.

People like to kick back, have fun and relax. Maybe a one time splurge on a cruise that you can pay cash for is safer than locking yourself into 5-7 years of car payments on a nice car or 30 years on a nice house?

 

[ziggy29]

Then again, no one ever said an economic recession hits all socioeconomic groups equally.

Having said that, the dirt cheap cruise deals we've often seen over the last couple years is part of the reason why the CPI is flat even when the cost of living feels like it's rising for people who aren't, well, buying cruises and stuff.

 

[Moemg]

Alaskan cruise prices have dropped significantly the last few years so a lot of people that were on the fence about that trip are going . We are going in May and the cost is at least $400 less than a few years ago so some bargains you have to grab while available .

 

[NW-Bound]

People are even, gasp, buying new RVs.

"The RV industry is a great leading indicator for the overall health of the economy," says Kathryn I. Thompson, founder of Thompson Research Group in Nashville, Tenn. Over the last decade, manufacturers have produced an average of 309,000 RVs a year, according to the Recreation Vehicle Industry Assn.

On Sept. 28, Thor, the largest U.S. maker of recreational vehicles, reported a 51 percent jump in last quarter's sales from a year ago. Profit rose 64 percent, with net income exceeding by 16 percent the estimates of analysts surveyed by Bloomberg.​

RVs' Return May Indicate Consumer Recovery - BusinessWeek

 

[FinanceDude]

People are even, gasp, buying new RVs.

"The RV industry is a great leading indicator for the overall health of the economy," says Kathryn I. Thompson, founder of Thompson Research Group in Nashville, Tenn. Over the last decade, manufacturers have produced an average of 309,000 RVs a year, according to the Recreation Vehicle Industry Assn.

On Sept. 28, Thor, the largest U.S. maker of recreational vehicles, reported a 51 percent jump in last quarter's sales from a year ago. Profit rose 64 percent, with net income exceeding by 16 percent the estimates of analysts surveyed by Bloomberg.
​

RVs' Return May Indicate Consumer Recovery - BusinessWeek

It could be that, or that folks who gave up their homes need a place to live, and had enough credit to get an RV. Makes it much tought to repo!

 

[HFWR]

It could be that, or that folks who gave up their homes need a place to live, and had enough credit to get an RV. Makes it much tought to repo!

Most RVs cost more than my house...

 

[Emeritus]

Most RVs cost more than my house...

and move faster?

 

[kcowan]

You might be interested to know that Seattle's cruise boom comes at the expense of Vancouver:

Seattle has grabbed an estimated 50 to 60 per cent of annual Alaskan cruise volume, with its gains coming at Vancouver’s expense.
...
The number of cruise ship passengers through the city this year is expected to plummet by 30 per cent, from 900,000 passengers last year to about 600,000 in 2010. Ship calls will decline to 179 from 256, representing – at a reported $2-million a ship in benefits to the local economy – a $150-million hit.

So it is a great story but does not represent overall growth.
Vancouver?s cruise-ship industry hits rough seas_Aviation and Cruise_Hotelmule

Other competition:
Pier Pressure: West Coast Communities Vie for Vancouver Cruiseship Dollars | B.C. Tourism | Brennan Clarke | BCBusiness

 

[MasterBlaster]

My Two Cents

When I looked at and tracked fairs and associated expenses on an Alaskan cruise. it cost $200 less per person to fly to Seattle than to Vancouver even though they are not very far apart. I don't know why that is, but it wasn't a short term trend.

So all things being equal, I would choose to fly into and cruise out of Seattle than Vancouver for my Alaskan cruise.

I suspect that others see the same value in a Seattle based cruise over Vancouver.

 

[rescueme]

I'm constantly amazed that we are in this terrible recession with extreme unemployment, yet I seem to see all sorts of signs of people spending money.

Don't forget that threre are a lot of retirees (such as myself) that planned on 100% of pre-retirement net income in my post-retirement years.

I have the "luxury" of normal income, without the fear of losing a job.

In my little world, I'm fortunate to say that there is no recession, and I belive that there are quite a few of us (especially with pre-boomers having the safety net of both SS and pensions) that are doing well.

 

[ziggy29]

When I looked at and tracked fairs and associated expenses on an Alaskan cruise. it cost $200 less per person to fly to Seattle than to Vancouver even though they are not very far apart. I don't know why that is, but it wasn't a short term trend.

So all things being equal, I would choose to fly into and cruise out of Seattle than Vancouver for my Alaskan cruise.

I suspect that others see the same value in a Seattle based cruise over Vancouver.

Let's not forget that for a U.S. resident, an added benefit is that an Alaska cruise out of Seattle should (I presume) avoid the Customs hassles of a Vancouver departure as well -- as long as there are no Canadian ports of call along the way.

In my little world, I'm fortunate to say that there is no recession, and I belive that there are quite a few of us (especially with pre-boomers having the safety net of both SS and pensions) that are doing well.

Agreed -- to a large extent what we are seeing is that there are two distinct "economic realities" emerging here, one for folks with sufficient, highly secure income streams and one for folks without.

 

[FIREd]

I think this is indicative of a two-speed economy. Some people are thriving in this economy and some people are disproportionally bearing the brunt of this recession. For the former, the dark days of 2008 seem far away and for the latter, they never went away.

 

[MasterBlaster]

Let's not forget that for a U.S. resident, an added benefit is that an Alaska cruise out of Seattle should (I presume) avoid the Customs hassles of a Vancouver departure as well -- as long as there are no Canadian ports of call along the way.

Well as you know, The Jones Act requires foreign operated vessels carrying US passengers between US ports to make at least one stop at a "distant" port.

Therefore cruises will make at least one stop in Canada before getting to Alaska. Usually they stop at Victoria Island.

 

[ziggy29]

Well as you know, The Jones Act requires foreign operated vessels carrying US passengers between US ports to make at least one stop at a "distant" port.

Oh, yeah -- I forgot about that anachronism, and my wife used to sell cruises. Go figure...

 

[harley]

People are even, gasp, buying new RVs.

"The RV industry is a great leading indicator for the overall health of the economy," says Kathryn I. Thompson, founder of Thompson Research Group in Nashville, Tenn. Over the last decade, manufacturers have produced an average of 309,000 RVs a year, according to the Recreation Vehicle Industry Assn.

On Sept. 28, Thor, the largest U.S. maker of recreational vehicles, reported a 51 percent jump in last quarter's sales from a year ago. Profit rose 64 percent, with net income exceeding by 16 percent the estimates of analysts surveyed by Bloomberg.
​

RVs' Return May Indicate Consumer Recovery - BusinessWeek

These types of statistics (lies, damn lies, and...) drive me nuts! So, 51% over last year. Was last year down 20% from the year before? Or 200%? Where's the 10 year rolling average? Aargh!

 

[FUEGO]

I think this is indicative of a two-speed economy. Some people are thriving in this economy and some people are disproportionally bearing the brunt of this recession. For the former, the dark days of 2008 seem far away and for the latter, they never went away.

I think the savers are feeling pretty good right now. Maybe a little less disposable income than the boom years, but they are able to spend on luxuries that make life more interesting (if they choose to).

The spenders are freaking out. recently, they have been cutting back on spending, trying to keep their debt from increasing, and working to pay some of it down. Their houses aren't oversized ATMs any more. Banks won't even refinance them to lower rates because they don't have 20% equity (if they have any equity at all). Their debt payments suck away what little disposable income they do have.

This is mostly based on anecdotal evidence of my peers. People who spent less than 100% of their incomes and didn't max out on car loans, mortgages, etc seem to be doing generally very well right now (even those who are unemployed). The rest that got 100% financing on their houses at the peak, and have their car leases expiring around this time are starting to feel the squeeze. Little bumps in the road for savers feel like huge mountains in the road for the spenders since there is no margin of safety in their budgets.

 

[MasterBlaster]

I concur that being a saver brings peace of mind. The converse of that (spenders/debtors be worried) is also true.

However I suspect that the number of people doing really well lately is limited. In many cases people are just keeping their head above water.

 

[harley]

I think the savers are feeling pretty good right now. Maybe a little less disposable income than the boom years, but they are able to spend on luxuries that make life more interesting (if they choose to).

The spenders are freaking out. recently, they have been cutting back on spending, trying to keep their debt from increasing, and working to pay some of it down. Their houses aren't oversized ATMs any more. Banks won't even refinance them to lower rates because they don't have 20% equity (if they have any equity at all). Their debt payments suck away what little disposable income they do have.

I'm not sure if I can go along with this. I think savers are still saving, sucking it in even tighter. And spenders just don't know how to not be spenders, so they are going even deeper into debt, or at least not adjusting their spending in ways that most of us tightwads would see as positive. My evidence is also anecdotal, based on a couple of things like my buddy who has very little in the wau of retirement savings blowing this year's bonus on a new motorcycle. Oh well, at least he got a bonus.

 

[ziggy29]

I'm not sure if I can go along with this. I think savers are still saving, sucking it in even tighter.

At least those who don't have a rock-solid income stream which they don't fear losing.

You're describing my household situation pretty well here -- we're still saving as much as before (maybe even more), because we're spending less since I have no pretense of job security, and losing a job in this market could mean a year or two of searching... assuming you don't give up completely.

Sure, if I had rock-solid job security it would be easier to "live for today" more than I do, or if I were retired and had what I considered to be a secure COLA'd income stream the same would be true as well. But in this economy, if you don't have those things, even the savers have reason to think they need to save even more.

 

[FUEGO]

I'm not sure if I can go along with this. I think savers are still saving, sucking it in even tighter. And spenders just don't know how to not be spenders, so they are going even deeper into debt, or at least not adjusting their spending in ways that most of us tightwads would see as positive. My evidence is also anecdotal, based on a couple of things like my buddy who has very little in the wau of retirement savings blowing this year's bonus on a new motorcycle. Oh well, at least he got a bonus.

I think most of the savers in the population at large aren't the hard core LBYM'ers that we are here at this forum. The savers still spend money, just they spend less than 100% of their income (ie don't incur consumer debt to finance their spending). They still have disposable income to spend on travel if they want.

The spenders had a good run, but are now like drunks cut off at the bar. Banks aren't refinancing their houses. Credit cards are harder to get and credit lines are lower. They don't have easy credit and inflating house prices enabling their heavy spending habits. It isn't that they choose to spend a lot less, as much as they have no other choice but to spend less. When the credit cards are maxed out, you can't refinance, and all your cash goes towards debt service and keeping the repo/foreclosure man away, you aren't able to spend much on discretionary items.

Clearly these are two polar opposites and plenty of folks fall in between. But for a lot of heavy spenders, they are waking up to the reality that they just can't spend anymore money because they are cut off.

 

[ziggy29]

Clearly these are two polar opposites and plenty of folks fall in between. But for a lot of heavy spenders, they are waking up to the reality that they just can't spend anymore money because they are cut off.

Certainly for the out-of-control borrowers and spenders, the party's beyond over.

But even a lot of hard-core, heavy savers aren't convinced they are going to be able to weather the entirety of this economic storm without cutting back. Yes, the worst-case outcome for the spenders will be a lot worse than for the savers, but savers by their nature tend to be economically cautious and conservative about their spending habits, and a bad economy could convince them that they can forego luxuries for a couple years until they are feeling more secure about the future again.

So in reality, the only "what me worry" camp I see left are those with very secure and sufficient income streams, those who don't feel the need to accumulate enough cash to survive the economic equivalent of a nuclear event.

 

[FUEGO]

Yes, the worst-case outcome for the spenders will be a lot worse than for the savers, but savers by their nature tend to be economically cautious and conservative about their spending habits, and a bad economy could convince them that they can forego luxuries for a couple years until they are feeling more secure about the future again.

I agree - the difference is in the interpretation. Most people have been scared and have been saving for 2-3 years now. They have foregone the luxuries to some extent. They have been saving and fortifying the emergency fund. But a lot of people are getting cabin fever, or realizing that this is the new reality. They can either keep saving more and more, or just get back to living life.

Most folks don't plan and save like we do here. They see themselves getting older, their kids growing up, and they want to experience things and buy things now for themselves and for their children.

 

[NW-Bound]

By posting right after Ha's linked article, I caused an inference that the Bloomberd article claimed that a new RV record sales was reached. That is not true at all. The author simply pointed out that RV sales had rebounded from a low. I should add that although Thor sales went up 50% from its low, a contribution factor may be that many of its competitors had gone bankrupt. I don't think anyone would expect a new sales record to be reached anytime soon, if ever.

This RV sales number may be another interesting data point for [-]the dirty market timers[/-] some portfolio rebalancers to consider in their [-]selling[/-] rebalance criteria.

These types of statistics (lies, damn lies, and...) drive me nuts! So, 51% over last year. Was last year down 20% from the year before? Or 200%? Where's the 10 year rolling average? Aargh!

It could be that, or that folks who gave up their homes need a place to live, and had enough credit to get an RV. Makes it much tought to repo!

Most RVs cost more than my house...

The article did point out that recent RV sales tended to be of the travel trailer types, which cost less than motor homes.