MIAMI - When Miami banker David Schwartz takes his family to Europe this summer, they'll pick up a Royal Caribbean Cruise Lines ship in Barcelona, Spain.

"We booked a European cruise, and we were fortunate," says Schwartz, president of the Florida International Bankers Association. With the dollar plummeting to new lows against the euro, he says, "A decent hotel is 300 euros a night, over $450 a night."

Of course, it doesn't take an international finance whiz to realize cruising is a smart hedge against the weak dollar when vacationing in Europe: Americans are flocking to the option because they can pay for tickets and onboard purchases with greenbacks.

U.S.-based cruise lines, capitalizing on the exchange rate, have deployed more capacity in Europe this coming summer than ever before, and European-based lines are building new ships and expanding in their own right.

Cruise capacity in Europe in 2008 is expected to jump more than 15 percent over last year, reminiscent of the boom in the U.S. market in the 1980s and 1990s. And it's not just the Yanks who are lining up to fill all those new berths. European cruises are suddenly luring more Europeans as well.

Europe is "the next center of gravity for cruising. Look at the current growth rate and the potential and the number of new ships," says David Dingle, CEO of Carnival U.K., who not only oversees Miami-based Carnival Corp.'s British brands but also is chairman of the European Cruise Council, a trade group.

Not long ago, Europe was a place where cruise lines sent their old, tired hardware. Now it has blossomed into a showcase for the industry's newest and largest ships.

A key driver: European cruises fetch higher prices than those in the Caribbean and most other spots, enabling the lines to pocket bigger profits.

On April 17, Royal Caribbean took possession of the new Independence of the Seas, one of three Freedom-class vessels holding the title of the world's largest cruise ships. The 160,000-ton behemoth will make her maiden voyage from Southampton, England, May 2 and do Mediterranean cruises this summer.

The 3,634-passenger ship is the largest ever home ported in Europe. "Typically our new ships come to the U.S. to sail to the Caribbean first," says Susan Hooper, senior vice president of Royal Caribbean. "This is the first time a new Royal Caribbean ship is starting in Europe."

Even Carnival Cruise Lines, which espouses a strong Caribbean focus, plans to sail its newest and largest ship - the 113,000-ton Carnival Splendor - in Europe this summer. The ship will debut in Dover, England, in July, sailing northern European cruises, then head to Rome's port in Civitavecchia for Mediterranean tours. She'll finally head for Fort Lauderdale in late October.

Joining her is the Carnival Freedom, which last year made her maiden voyage, a nine-day Mediterranean cruise, from Venice. She returns to the Mediterranean in May.

Europe is not only attracting bigger ships, but they're staying longer. Cruise lines have stretched the European season well beyond the traditional summer months to run from April to November. Some U.S.-based lines have begun deploying ships year-round in Europe and the Mediterranean, joining Italian cruise operators Costa Cruises and MSC Crociere in that market.

Brilliance of the Seas, for example, will stay year-round in Europe in 2008 - a first for Royal Caribbean. "With the Mediterranean - one of the most popular destinations in the world - in your backyard, you have to say this is an underdeveloped opportunity," says Susan Hooper, a senior vice president who oversees Europe for Royal Caribbean. The biggest challenge, she says, is getting consumers to rethink their old habits of cruising in the summer.

Next page >