Metamorphosis - Cruise Ship Portal

Unique to the industry: Oasis of the Sea’s Central Park.
The cruise industry can look forward to
growth in the overseas markets, initially in
Europe. The UK market in particular will see
considerable developments in 2010. In
October, Cunard Line will accept the 90,400t
Queen Elizabeth into its fleet, while MSC
Cruises will base the 60,000t MSC Opera in
Southampton, the first time MSC Cruises has
operated in the UK.
The total number of cruise passengers is
forecast to grow by 6.4% to 14.3 million
people in 2010. However, growth in
passengers coming from locations other than
the US or Canada should be more than
double what CLIA expects in North America,
at 14.3% versus 7%. International passengers
will form one third of the global cruise
business, up from one quarter last year, and
less than one tenth in 2000.
Dale believes a key factor in the likelihood
of people taking a cruise is how close they
live to a port to sail from. More than half of US
residents are within driving distance of a
cruise port and Europe is fast catching up.
“Asia, South America and the emerging
markets are taking a little longer to develop
infrastructure such as ports and sales agents,
but once everything is in place they will be
huge,” he explains.
According to CLIA’s agent survey, the
Mediterranean tops travel agents’ list of
anticipated cruising ‘hot spots’ this year. This
means that the Mediterranean leads areas of
future interest to consumers, although the
Caribbean, followed by
Alaska, continues to
dominate current bookings.
Another element
favouring Europe is the
newfound popularity of
riverboats. For Dale, one of
the most dramatic findings
from the survey was that
34% of agents identified
consumers as highly
interested in river cruising.
“We have three riverboat
members within the last year
and a half: AMA [Waterways
of Chatsworth, California],
Uniworld [Boutique River
Cruises of Los Angeles] and
Avalon Waterways [of
Littleton, Colorado],” he says.
He also expects sea cruises
to get a boost from river
cruisers branching out. “It’ll
be interesting to watch
whether the audiences are
separate or cross the line.”
Theme/affinity cruises are growing in
popularity, while existing tendencies towards
spa culture, multi-generational family trips,
and younger customers will continue. “Some
lines are getting more than 40% of their
business from affinity groups,” he says.
“Historically it was 20%.” Music, food, and
wine-themed cruises are particularly popular,
and there is a broad range on offer. “I was on
a knitting cruise recently,” Dale says, “I felt
really safe!”
“
Couples are the dominant demographic
while baby boomers and repeat customers
are the biggest growth segment, but Dale
believes that the increasingly younger profile
of cruise customers is not due simply to more
children on board. The latest CLIA age
research shows that the typical passenger in
2008 was 46, down from a median age of 49
in 2006.
Supply and location
“Maybe we’re not recession proof, but we’re
certainly not in a recession,” says Richard
Sasso, president and CEO of MSC Cruises,
Market intelligence > Future growth
Trends on the horizon
■ strong interest in group and affinity
travel (for some lines more than 40%
of business)
■ popularity of theme cruises, notably
music, food and wine cruises
■ some lines are increasing their
line up of on-board speakers for
enhanced enrichment programmes
■ cruise lines expect baby boomers
and repeat cruisers to be the biggest
growth markets
■ emerging markets to develop further.
US, and chairman of CLIA’s marketing
committee, forecasting that cruise operators
will thrive this year because of the industry’s
diversity and ability to reinvent itself. “There
will be 26 new ships coming into service
between 2010 and 2012, and they’re going to
be full,” Sasso says. Indeed, occupancy has
not been an issue although pricing is, with
yields down 10% to 15%.
“The good news is that prices are creeping
back up and people are booking further out,”
he explains.
According to Sasso, 14 ships added at a
cost of $4.7 billion in 2009 produced a net
2.8% in supply, accounting for others taken
out of service. But the increase in supply
created 3.3% more capacity, which is
consistent with the trend that has seen the
space allotted each passenger double, and
features, such as balconies, which were once
rarities, become semi-standard.
Asia, South America and the emerging markets are
taking a little longer to develop infrastructure such
as ports and sales agents, but once everything is
in place they will be huge. Terry Dale
Sasso believes cruise operators have an
advantage over others in the travel industry.
“We can move our ships to where the
markets are,” he says. Carnival Corporation is
a case in point, having recently stated that it
would continue focusing on Europe in 2010
with “four of six new ships” scheduled for its
European brands. Carnival’s European
revenue fell just 6% last year, versus a 13%
drop in North America.
However, Carnival forecasted yield
improvements in the second half of 2010,
observing late last year that pricing was
already running ahead of earlier lows. �
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