Growth and plenty of it have been the cruise line industry’s outlook for nearly 10 years. “There’s nothing I see that suggests any kind of slowdown is on the horizon,” said Frank Del Rio, chief executive of Norwegian Cruise Holdings in early April. This is a business that was once for the wealthy, but now appeals to middle-income travelers, and was thought to be only for older travelers, but now draws Millennials.
It’s also an industry that’s seeing new players enter the market, as well as land travel trends, make an appearance in a big way—from OTAs to tech to conscious travel.
Room To Grow
Economic growth, low unemployment, and diverse destination options are the primary reason cruising continues to grow. At the end of the year, Cruise Lines International Association’s (CLIA) 2019 State of the Cruise Industry Outlook reported that an estimated 30 million travelers are expected to cruise in 2019, up from 28.2 million in 2018 (and up 10 million since 2009).
Even the “core North American market…has growth potential,” reports cruisemarketwatch.com. “Only 53% of the target North American market (or 24% of the whole US population) has ever taken an ocean cruise. All the cruise ships in the entire world filled at capacity all year long still only amount to less than half of the total number of visitors to Las Vegas.”
New companies and new regions are heating up in cruising. Forbes.com writes, “Ritz Carlton, Virgin, and Viking have all entered the ocean cruise sector in the last few years or have announced their intention to do so.” In Asia, Jalesh Cruises is targeting the Indian source market with short cruises from Mumbai, while China Travel Service is expected to start service later in the year.
“Cruise lines are no longer content to just compete in one area of the industry, states cruisecritic.com. “Instead the lines want to get the customer at every possible point of entry. In the past few years, we’ve seen Crystal Cruises enter the river and announce expedition, Scenic Cruises build an oceangoing expedition ship and MSC lay plans for new luxury ships.”
Travel For One Or Many
As Vacations to Go’s President & COO Emerson Hankamer explains, “cruising is popular across generations.” Adding, “Keep in mind many Millennials grew up cruising and love it.” Just like land travel options, authentic experiences are more important to younger cruise line customers. Hankamer notes cruise companies are using social media to connect with this market.
CLIA’s 2019 report includes travel trends for this year. One is female-centered cruising, which “can create a female empowerment community at sea.” Another growing trend is solo travel. “Cruising allows for solo travel without the worry of arranging a ton of details while visiting even the most far-reaching destinations and connecting with other travelers.”
Cruise lines cater to families as well as those who want to travel without children. Kate Silver writes for the Washington Post, “Nearly half of families that cruise bring the kids along, compared with 29% of those traveling on land.” Megan King, senior vice president, global strategic communications and research at CLIA explains that cruises work well for families because everyone can take advantage of different activities separately or together.
On the other hand, as cruisecritic.com points out, there are options for adults looking to take a trip without children. Viking Ocean and Virgin Voyages are 18 and older, and other lines are tucking children’s areas away and making public spaces that appeal strictly to adults.
Gaining Global Popularity
“Cruise lines are based in North America and Europe and therefore initially focused their energies on acquiring customers in those markets,” explains Hankamer. “Today Australia, New Zealand, Japan, China, Brazil, and many other countries are large source markets.
According to marketwatch.com, cruising is poised for growth in Asia and Africa, especially in China where more passengers are visiting Japan and Korea. Joel Katz Managing Director for CLIA Australasia & Asia said, “most Asian source markets are registering double-digit year-on-year growth” in 2017. Asian passengers tend to travel within the region (91%) and are younger cruisers (44.6 years old average).
India is another growing area, but it’s a small number in terms of global figures. That’s expected to change. Kunal Sampat, General Manager-India, MSC Cruises, notes that India is still an emerging market for the cruise industry, but “looking at the support we have received from the trade over the last few years, we are confident that MSC will be able to make strong footprints in India.”
More Ships Sailing
Vacations to Go’s Hankamer says, “They cannot build ships fast enough. Currently, the industry has $65 billion in ships on order over the next 10 years.” New ships set to be delivered in 2019 represent a 7.5% increase (42,488), in new berths—a record. They range in size from 100-passenger capacity up to the largest at more than 5,000. Cruiseindustrynews.com describes China’s SunStone (the first of up to 10 expedition new builds) as “the most notable delivery” in 2019.
Cruisemarketwatch.com estimates the 37 new cruise ships to be added between now and 2020 “will cumulatively add $11.7 billion in annual revenue to the ocean cruise industry.”
Something For Everyone
“We’re constantly looking for what’s next,” said Richard Fain, chairman, and CEO of Royal Caribbean Cruises Ltd, which is why cruise line executives believe cruising will continue to attract travelers. What’s next can be room design, wearable tech, conscious travel options or new activities like escape rooms or tattoo parlors.
“Passengers are more willing to pay to eat in a specialty restaurant or go on a shore excursion than they are to buy a souvenir in the gift shop,” says Doug Parker, producer of Cruise Radio, a weekly podcast that shares cruise reviews and news.
“Cruise lines are serving up experiences that even the least-likely influencer is going to want to document,” writes cruisecritic.com. “We predict every new cruise ship and every refurbishment going forward will include one or more Instagram-worthy space or activity that will get the industry buzzing.”
CLIA’s predictions for 2019 are for more “immersive, cultural experiences beyond sightseeing. Bucket lists have become more goal-oriented and cruise lines are meeting these demands. Passengers can conquer Machu Picchu or complete culinary workshops hosted by Le Cordon Bleu chefs.”
Tech, Travel, And Connectivity
“Cruise lines are working hard to upgrade connectivity and provide new apps and digital experiences for passengers,” says cruiseindustrynews.com. Princess Cruises continues to roll out its OceanMedallion platform, which, among other things, uses digital signs that recognize passengers as they pass. Royal Caribbean Cruises and Celebrity Edge are using facial recognition to get passengers quickly onboard. Cruise lines are providing apps or smart bands that control lights, heat and door locks. A new MSC Cruises ship, Bellissima, offers guests a personal assistant, Zoe, in every stateroom.
In addition to all the cool, new tech, connectivity is something cruise lines are always working on improving. This is particularly important to Millennials and “digital nomads” who prefer trips where they can work remotely.
Like land travelers, cruise ship passengers are conscious of the impact their travel can have—from cruise ships’ practices to over-tourism concerns.
Reporting on an April cruise industry panel for the Miami Herald, Taylor Dolven quoted Carnival Corp. CEO Arnold Donald on the industry’s environmental efforts. “We sail responsibly,” he said. “Nobody wants to go to a polluted marine environment. Sustainability is imperative to our business.”
Cruise lines are reducing fuel consumption and seriously looking at their carbon footprint. According to CLIA, the industry is working to cut per ship emissions by 40% by 2023.
Last year straws and single-use plastics were banned throughout the industry. This year Royal Caribbean Cruises Ltd. brands will replace plastic water bottles with aluminum containers, while others “will look for ways to cut back on the number of printed papers that are delivered to cabins.”
CLIA’s King notes “conscientiousness extends beyond the environment and applies to respect for cultures and sustainability. It could mean limiting the number of people snorkeling in certain areas, or it could translate as cruise officials coordinating with a city” so they can “enjoy the benefits of tourism while protecting their places.”
During the Miami panel, speakers addressed “misperceptions about the negatives of cruising, noting that while Venice has suffered from over-tourism, only about 1 million of the city’s annual 20 million visitors come on cruises.” To alleviate over-tourism cruise lines are working together to stagger arrivals and take advantage of less popular ports.
Booking & Bundling
Cruising and online booking are at an interesting intersection—especially with the launch of TripAdvisor Cruise, which is based on years of Cruise Critic reviews. TripAdvisor Cruise includes reviews and search tools as well as profiles for cruise lines that include web content, passenger reviews, and photos. It’s expected the site will eventually suggest flight options for users cruise dates.
Writing for Skift.com, Sean O’Neill quotes Anthony Hamawy, President of cruise.com: “You can be comfortable using the internet to do online shopping, but still find cruise booking to be complicated and want some help.” Like other OTAs that sell cruises, Cruise.com also has a robust call center.
“Cruise lines are starting to look like airlines when it comes to getting passengers to fork over money for special perks,” writes cruisecritic.com. The site notes they are seeing more exclusive options and “extra-fee packages to offer a VIP-light experience” for cost-conscious travelers.
The future continues to look bright for an industry that, according to CLIA, sustains 1,108,676 jobs valued at $45.6 billion (wages and salaries) and $134 billion total output worldwide in 2017.
Colleen McDaniel, senior executive editor with Cruise Critic is optimistic. “Cruise remains hot and it is continuing to grow. We’re in this period right now that we’re seeing new builds come in at a pace that is unprecedented and exciting, and there’s new technology on the horizon so passengers can have really great customized service on board.”
Sources: Miami Herald, Marketwatch, Cruising.org, Washington Post, Cruise Market Watch, Forbes, Cruisecritic.com, The Medi Telegraph, Skift.com, Cruise Industry News, Voyagers World