Travel companies are launching luxurious ships into troubled waters

In late January, Silversea Cruises christened its newest ship, the Silver Spirit, with champagne and sent it on a 91-day voyage around Latin America.

The ship, which accommodates 540 guests, is the company's largest and most luxurious. Suites are serviced by butlers. Passengers can choose among eight types of pillows. The spa is vast.

If it sounds out of tune with the times, it is. The ship was commissioned in 2007, before the start of the economic crisis. But Amerigo Perasso, boss of Silversea Cruises, insists he is happy with the investment. "People want to see the state of the art," he says.

Silversea is not the only cruise line to launch a new ship in troubled economic waters. In December, Royal Caribbean International, the world's second-biggest cruise operator, rolled out Oasis of the Seas, largest cruise ship in history.

It accommodates 5,400 guests and has a park with live plants, a large auditorium and a carousel, as well as other amenities normally found in amusement parks.

In 2009, cruise companies invested $4.7 billion to build 14 ships. They will launch a further 12 vessels this year. Many of these plans were laid before the economy sprang a leak.

The "supersizing" of the cruise industry comes as other industries are downsizing and consumers are curbing unnecessary expenses. To entice customers, cruise lines have cut prices dramatically, sometimes by as much as 40 percent.

Because of these discounts, more people are taking cruises: 13.4 million in 2009, up from 12.6 million in 2007, according to the Cruise Lines International Association, an industry body. But the discounts have eaten into earnings. At Carnival Corp., the biggest cruise line, revenue dropped more than 10 percent from 2008 to 2009. Even if the economy recovers, growing capacity may prevent firms from raising prices much.

Still, the cruise industry is doing better than other bits of the travel business, such as hotels and airlines, battered by a fall-off in business travel.

Cruises can appeal to budget-conscious consumers by touting themselves as "all-inclusive" (though many amenities, such as alcohol and excursions, cost extra). Cruises also allow some people to go on vacation without paying for a flight. There are about 30 ports of embarkation in the United States alone.

The industry's bosses hope to attract even more customers in the next few years. Only about 20 percent of Americans have been on a cruise. Most of them are not spring chickens. Firms are trying to draw younger passengers and families with lower prices, as well as things such as ice-skating rinks and cinemas. As a result, the median age of cruise passengers in 2008 was 46, down from 53 in 2002.