New horizons: small cruise lines get innovative to take market share from the heavyweights across the region.

Cruise lines are one of the hottest segments in the tourism industry. They moved 11 million passengers last year, according to the Cruise Lines International Association. In 1980, just 1.5 million people took a cruise. The industry expects growth to continue with no end in sight. With so many people stepping aboard, the market is not just a paradise for the big cruise lines--more and more of the little guys are moving in.

Richard Jansen, senior vice president at DVB Bank, a Frankfurt financial institution that caters to the transportation industry, says 40 smaller cruise lines and a few mid-sized companies generate US$6 billion a year in sales, just shy of a third of the $20 billion-a-year market. "This number leads to an interesting conclusion in that, the general statement that about 80% of the cruise market is controlled by Carnival, RCI, Star/NCl and MSC Cruises, thus actually is more like 70%," Jansen said in a written statement,

Small cruise lines have decided to fight the big lines for their market share. To do that, investors are searching for market niches abandoned by the big outfits, and in the process, they have sparked a revolution.

As a result, the market is beginning to split up into small parts. Some small lines are offering the passenger luxury and comfort, as is the case with Metropolitan Touring, the first company to visit Ecuador's Galapagos Islands 53 years ago. "In that time, our company was responsible for the creation of all the infrastructure needed to operate on the archipelago," says Luis Guzman, head of the company's research and development department. "There wasn't even a dock in the place."

Several lines now operate near the island with vessels that are small enough to meet domestic regulations, which limit sizes to protect the island chain.

Others have carved niches out of thin air. A year ago, one cruise line opened for business and decided to really do its own thing. Sidestepping frills and amenities that other lines offer, EasyCruise sells travel packages at affordable prices. Greek businessman Stelios created EasyCruise with the aim of targeting younger passengers on a wide-scale basis to get as many of them as possible on the water. Yet instead of keeping them on board, EasyCruise ships act like moving hotels, shuffling passengers along to locations with bustling nightlife.

The company says it has created a new concept of passenger cruises, which are already calling on ports in Europe and will soon arrive in the United States and Latin America via the Caribbean. "We saw that the cruise-ship market was very big, and that the lines were focusing on older people because they were used to keeping the passengers on board during the night. We thought about attracting younger passengers and decided to keep the boat at the port during the night, and that's how we created a new market," says James Rothnie, an EasyCruise director.

The passenger can forget about spending day after day stuck on a boat in casinos, restaurants, pools and entertainment rooms. While the company does not disclose financial details, surveys conducted on passengers after a voyage reveal that 99.8% of the passengers were satisfied and said they would take another trip. "There are always things that we can do to improve and we found out that if we were to invest a little more in bars, restaurants and activities on our ships we would attract even more people," says Rothnie. "We are trying to improve, we want to develop this business and be above average." The company is planning to add new routes and wrap up a second season in the Caribbean.

For now, the company has Miami, Fort Lauderdale and parts of South America in its crosshairs. "The passenger on a traditional cruise ship is going to find almost nothing like on our boats," says Rothnie. "We think of EasyCruise as more of a floating hotel."

Modernizing. Smaller ports are benefiting from this trend. Recently, ports in small Mexican cities began investing heavily to expand and modernize with the aim of bringing in more tourists and developing their regional economies. Last February, a cruise ship visited the Port of Chiapas for the first time. In 2005 alone, the Mexican government invested more than $7 million to develop the port, which is located in a region that currently takes in 2.7 million visitors a year, out of which 700,000 are foreigners, mainly Europeans, says Henry Yanz, who represents Chiapas state in the United States but is not tied to a diplomatic office.

To get Chiapas ready for business, state and federal governments created an association to oversee the necessary tasks. "We built a new pier, a new passenger terminal, a dining plaza and infrastructure for visitors," says Yanz. "The work was intense and lasted for more than a year."

With these investments, Chiapas-home to Palenque, one of the most important centers for Mayan archaeological research in the country--hopes to really boost the number of visitors. "We had such tremendous success with the lines that committed themselves to visit the port and our expectations are high," Yanz says. "Besides, the destination offers many attractions: the city of Tapachula is 20 minutes from the port and the international airport is only seven minutes away. Furthermore, we have the infrastructure, and all the ships that are bound for Alaska and Acapulco are potential clients." Tapachula is a tourist town in Chiapas state.

The best result for ports that invest in infrastructure is an increase in tourists in regions that are historically not frequented by travelers. Last November, the Regal Princess cruise line arrived at the Port of Corinto, in Nicaragua. It was the country's first port to be included in an international itinerary. According to Melba Sanchez, the port's assistant manager, the region is ready to welcome any type of boat. "Last year, we received four or five cruise ships, but we now have all the infrastructure in place to receive more vessels and with greater frequency," Sanchez says.