This time last year, all the cruise lines were hot and heavy about the Med -- even Disney sent a ship. Now, it looks like the place is saturated and the party's over. Well, at least for the cruise lines.

Earlier this week Carnival announced they're pulling Carnival Freedom out of the Med for 2009, citing the strength of pricing in ... the Caribbean. Wasn't the Caribbean the place all good itinerary planners wanted to avoid? The land of bargain-basement fares -- erm, "great value"? Well, now the basement is looking pretty darned good, apparently.

There's definitely a lot of discounting in Europe -- we were shocked to get a mailing from Holland America Line touting $99/day fares in Europe. On HAL. In Europe. $99/day. Aaaagh! (If I didn't have a job and a family, I'd so be on a ship right now.)

Worse, it seems that there's even some -- shhhh -- unsold capacity. Now that's truly frightening. We all know that the marginal cost of a cruise passenger is basically nil. If a cruise line has a cabin, they should sell it at any price rather than let it go empty. After all, there's no additional cost to doing so, and at least people will spend money on booze, shore tours and gratuities.

Even so, we're hearing of ships sailing with empty cabins. That's dire. So far we're not hearing this from the big guys like HAL and Celebrity, but one correspondent recently returned from Azamara Quest reported a 92% occupancy. That's pretty dismal in an industry that typically runs at 100%. Scarier still, another correspondent reported that her recent Windstar cruise on Wind Surf was at 59% capacity -- and they were strongly pushing the back-to-back, as the next sailing was just 50% sold. Now that's just wrong.

Ah well, the world runs by supply and demand. And in the current state of over-supply, now's a great time to pick up a Med cruise for cheap.

I live in jeans. They're comfy, they're flattering, they're stylish ... and they are forbidden from cruise ship dining rooms even on the most casual nights. Well, at least that's the case on paper.

I've started a little experiment to see which cruise lines' maitre d's will actually insist that I change. Below is what I've found so far.

Jeans-friendly (at least in practice)...

• Azamara - Technically, Azamara forbids jeans in the dining room. However, with heels and a rather nice top, Armani Exchange seemed to be A-OK.
• Carnival - On casual evenings, even Carnival's dress code says jeans are fine. The new "cruise elegant" attire for formal night explicitly forbids jeans, one member of our Editorial Board reports that a Brooks Brothers shirt and nice shoes meant he had no problem wearing his usual San Francisco uniform even on formal night.
• NCL - They are surprisingly ambiguous about jeans, saying only that "nice jeans ... are welcome in many of our restaurants as well, but not in all." That said, in practice jeans do not seem to be a problem.
• RCI - Jeans are not explicitly forbidden, though the RCI dress code seems to suggest that even casual nights should entail "slacks" or dresses. That said, in practice the rules seem to be much more relaxed. On a 7-night Caribbean, my fabulous Levi's Capital E's, paired with great heels, sailed right past the Maitre d'. Heck, I even saw jeans on a formal night.

"Madam, I'm afraid we have a dress code..."

• Oceania - Busted! I got away with it on the first night (some guests were still waiting for their checked luggage), but later in the cruise the Maitre d' (politely) asked me to change. Oceania's dinnertime dress code explicitly forbids jeans. Fair enough, but that basically means their claim to a relaxed dress code means little for me. If I can't wear jeans, I might as well wear a formal dress. It's not like slacks are any more comfortable or packable.

I have yet to try this experiment on Celebrity and Holland America Line. Both technically ban jeans, but heck, I'm pretty sure they wouldn't keel-haul me for a first offense....

Looks like our fair city is getting serious about building a new cruise terminal in San Francisco.

As a cruise fan I think that would be nice -- the current terminal was put up in the 20s, and it shows in the drafty, bare-beamed facility.

We've also had a sad decline in the number of cruise ship calls to the City by the Bay:

• 87 visits in '06
• 60 in '07
• 59 in '08
• 46 in '09

The trouble is, I seriously doubt a new cruise terminal would help with that decline. The real problem for San Francisco is that we are too darned far from the places people want to cruise.

A seven night cruise (what most people want) can just get to Canada from here, and even then there aren't a lot of interesting ports along the way. OK, Seattle's cool, but then you might as well fly into Seattle. Worse, to do that itinerary, a ship has to do more than 20 knots for much of the trip.

Given the continually-rising cost of fuel, and the explonential relationship between fuel consumption and speed, it seems a lot better for cruise lines to sail from places closer to the desireable Alaska and Mexico destinations: Vancouver, Seattle, San Diego.

American Airlines today announced a new $15 charge for even one checked bag, for anyone who books a discount economy ticket, starting with tickets purchased June 15.

Heck, I was shocked that they already charge $25 for the second bag.

Well, this is one more reason to pack ultra-light. It is possible to go on a cruise with luggage that fits in the overhead bin. I've even done a 10-day Med cruise that way, though 7 days is usually my max.

For tips on how, check out our guide to carry-on packing.

I have great sympathy for the guys who write financial press releases. Publicly-traded companies are required to report financial results, but the PR guys are under pressure to make even poor results sound rosy.

For example, Ambassadors International, parent company of Windstar Cruises and Majestic America Line (which they are trying to sell), sent off a press release titled:

Ambassadors International, Inc. Reports Increased Revenue and Improvement in Pretax Results for the First Quarter 2008"

(Our News article on the release is here)

That translates as:

• They bought Windstar for $100M last year, which added to the company's revenue, and fortunately Windstar has a better operating margin than Majestic America Line.
• Apples-to-apples revenue, from Majestic America Line, is down about 20%, for two reasons:
• Empress of the North has 46% fewer passengers and guests who did book paid 14% less than last year. This is presumably due to loss of reputation from the ship running aground in May 2007.
• A fire on Queen of the West's fire meant she was out of commission for two sailings, and Columbia River cruises had to be pulled in to cover

Oof. Like I said, my sympathies to the Ambassador's PR guys. And to all editors who have to parse their releases.

Mini-rant here. What's up with cruise lines (and companies in general) describing luxurious things as "European". I lived in Europe for three years, my husband for seven, and with the exception of the food, neither of us found European service or amenities better than what is available in major US cities, usually at better prices.

Which left me puzzled by these recent examples of Euro-philia in marketing:

"European-style service". This month's Celebrated Living magazine praised Holland America Line with that phrase. Which struck me as odd. My experience of service in Europe included:

• Fine Parisian restaurants REFUSING to serve my coffee at the same time as my dessert.
• Most shops closed all of Sunday in Italy, Germany and France.
• British trains that rarely run on time, and Parisian ones that are often on strike.

By contrast, I agree with Celebrated Living that HAL has very good service -- attentive, accommodating, pretty much the opposite of service in Europe. And of course most of the crewmembers are Indonesian and Filipino. But I suppose "Southeast Asian colonial style service" doesn't have quite the same ring to it.

"European style bedding". Azamara touts this. What they mean here is that they have duvets ... in some cabin categories. The first night, my cabin had nothing but sheets, not even a blanket. When I requested the purported duvet, I got a mattress pad stuffed into a duvet cover (!).

Hmm... over-promise, under-deliver, and inadequate facilities. On second thought, maybe Azamara does offer an authentic European experience.

Well, I doubt it was my influence, but after I gushed about the Silverado Cabernet being the best wine buy on HAL at $66 a bottle, I just noticed that it's gone up to $85. Which, considering that it's about $40 a bottle at the store, is probably about right. Drat.

I'll have to pore over the new wine lists to see if there are still any exceptional values.

Sometimes a little knowledge is just confusing, but a recent flurry of unusual, financing-related press releases from Carnival Corp caught our attention and got us wondering about the implications....

April 16: Carnival Corp Debt Holders Send a Shot Across the Bow

The story began a few weeks ago some of Carnival Corp's debenture holders exercised their option to convert debentures (a form of debt) into shares. It was weird because it was a miniscule amount, just $117k out of $595 million held through 2021.

I suspect that was a "shot across the bow", a way for investors to tell Carnival Corp that old interest rates (set in a time when we weren't worried about inflation) are no longer sufficient.

April 25: Carnival Increases Interest Payments

To enhance the attractiveness of their debentures due in 2033, Carnival offered an additional 0.5% interest payment per annum for the next 18 months, plus an additional repurchase option at the end of that period.

April 30: $470 million of Debt is Cashed In

Even following the increase in interest payments, a bit more than half of the debenture holders exercised their option for immediate repurchase.

My interpretation: Carnival Corp knows exactly what they're doing. Presumably they would rather hold off on $500M of capital expenditure than pay out more in interest. Which suggests Carnival Corp is not prioritizing fleet growth.

Slower fleet growth makes sense given the high cost of European shipbuilding, but could give less price-sensitive RCL, NCL and MSC a chance to make a louder splash.

Of course, this tightening of credit does make me wonder if highly-leveraged RCL and private equity funded NCL might soon have to make modifications of their own!

Disclaimer: Do NOT apply my musings to your portfolio. If I had insider information, I couldn't use it, much less print it.

NCL Pearl pool area

CruiseSavvy toured Norwegian Pearl today, the ship that best embodies NCL's "Freestyle 2.0" concept of broad choice in restaurants, activities and entertainment.

I'll be honest: I went in biased. Just yesterday I had travel agents telling me "if Carnival is the Wal-Mart of the seas, NCL is the Dollar Store" and "I would not go back on NCL if they paid me." NCL is the only major cruise line I've ever advised people against.

You know what, I was impressed.

The public rooms were stunning. The food was tasty and beautifully presented. Housekeeping was sharp. Officers and crew were friendly. (As of tonight we still have pictures to add, but you can see the work in progress in the Norwegian Pearl review.)

I don't know how the older ships compare. I don't know whether their margins are sustainable. I don't know what the nightlife or social experience are like.

With those disclaimers, I have to say: if what I saw is representative of their product, I'd choose this over Princess' larger ships any day.

No "Foreign Objects"
NCL Pearl Ladies' Room

We've all seen the notices saying that cruise ships have "delicate plumbing systems" and exhorting us not to place "bulky" or "foreign" objects in the toilet.

And then there are diagrams showing things like diapers and soda cups as prohibited items. But who the heck would ever try to flush a soda cup?

The real problem is tampons. It's something people are accustomed to flushing. It's something marine plumbing systems can't handle.

Maybe it's embarassing for (male) cruise line executives. But y'all have to get over it. Save money. Save hassle. Just do it: Change the signs to say "no tampons".

Oh, and make sure there are feminine hygiene bags in all ladies' room stalls. Based on recent experience on Celebrity Mercury, Celebrity Infinity and Norwegian Pearl I've seen them in only about 50%. Yuck.

Signs are vague everywhere...

Holland America Line	Celebrity	Royal Caribbean