Analyst says economy will cause demand for cruises will fall off

NEW YORK -- A financial analyst says that climbing U.S. unemployment may hurt demand for cruises.

Robert Simonson of William Blair & Co. said rising U.S. unemployment will likely curb Caribbean cruises because such trips are the sector's most affordable offering. Low-income consumers tend to lean toward Caribbean cruises based on pricing; but those consumers have tightened spending of late due to recession fears and other economic worries.

In early January, the Labor Department reported the nation's unemployment rate hit a two-year high of 5 percent in December.

The analyst also cautioned that unemployment, coupled with falling stock prices and housing concerns, will start to squeeze upper-income customers who book European cruises, which typically are more expensive than Caribbean cruises.