Industry Insights: Cruise Industry—Overcoming Challenges & Leveraging Opportunities

Recommend Standard Image TemplateCruise Industry—Overcoming Challenges & Leveraging Opportunities By Paloma Villaverde de Rico“We’re an industry that’s resilient and thriving all over the world,” said Kelly Craighead, President and CEO of Cruise Lines International Association (CLIA), during Seatrade Cruise Global’s “State of the Industry” general session. “We’re an industry of innovation, creativity and passion for the people and the places we connect.” She continued, “The pessimist complains about the wind, the optimist expects it to change, the realist adjusts the sails. So, my friends, we have the ability and the agility to lead our industry to an even better future. I’m excited that we can navigate that future together, adjusting the sails to overcome the challenges and leveraging the opportunities along that path.” The outlook for the cruise industry does indeed look great, with Craighead noting that, “We’re an industry breaking records in ways we might never have imagined only a few years ago.” In terms of passenger volume, at of the end of 2023, “we’ve surpassed the scale that we had achieved previously in 2019. Today I can report for the first time that our total global passenger numbers reached 31.7 million in 2023 [18.1 million North American passengers]. That’s almost 2 million more than in 2019.” Additionally, said Craighead, “CLIA forecasts passenger numbers will break further records this year, reaching 34.1 million worldwide and 36.4 million in 2025.” In fact, during the general session, which in addition to Craighead also featured cruise line executives from the four major cruise brands, Josh Weinstein, President, CEO and Chief Climate Officer, Carnival Corporation, noted that, “Our outlook for 2024, our record yields, record demand, record passengers carried, and where we project to have an amazing 2024, our bookings for 2025 are better than they were last year at this point for 2024. So, it’s [no longer] something that we view as pent-up demand. I’ve said this before, the concept of pent-up demand for cruising is gone. It’s over. This is natural demand because we all provide amazing experiences. We deliver happiness.” Added Pierfranesco Vago, Executive Chairman, cruise division for MSC Group, “We have a lot of newcomers, and this is promising because it looks like the numbers will be on the rise.” That demand is creating the necessity for more passenger ships, with 13 new ships on order for Norwegian Cruise Line Holdings (NCLH); nine for Royal Caribbean Group; eight for MSC Group; and four for Carnival Corporation. Currently, CLIA-member cruise lines have 35 ships on the order book through 2028, with eight launching this year, including the recent launch of the Sun Princess, the launch in June of the Queen Anne, Disney Treasure launching in December, EXPLORA II launching in August, Utopia of the Seas launching in July and Silversea’s Silver Ray launching in August. Harry Sommer, President and CEO of NCLH, noted, “I think one of the unique things we’re seeing coming out of COVID is all the major cruise lines—those represented here, plus lines like Disney and Viking, among others—their new products are so extraordinary and so much better than what was delivered back in 2015, ‘16 and ’17, that it’s driving additional excitement for the entire industry. When any new ship is delivered, no matter whether it’s part of our portfolio or in the other portfolios, demand improves for all of us because it adds excitement to the industry.” When it comes to the intent to cruise, CLIA’s international research shows the intention to cruise is continuing to track higher than even in 2019. Of those who have cruised before, 82 percent say they’re likely to cruise again. Even among those who have never cruised, 71 percent say they would consider a cruise. Additionally, the age of the cruise passenger is skewing younger, with the average age of cruise passengers globally at 46, and the portion of cruisers aged under 40 now at 36 percent. Of the younger generations, Millennials are the most enthusiastic cruise travelers of the future. Jason Liberty, President and CEO for Royal Caribbean Group, said, “Typically about a third [of passengers] are new to cruise. Think about that, you have 10 million new people coming in and that number will grow each and every year.” And those passengers, he said, “are more likely to cruise again once they’ve had the experience.” In fact, according to CLIA’s most recent State of the Cruise Industry Report, 12 percent of cruise travelers cruise twice a year and 10 percent of cruise travelers take three to five cruises a year. Cruise lines’ main competitors, they all agree, aren’t sitting in the room with them— they are the land-based bookings, with Liberty noting, “We’re chasing to close that gap to land-based vacations.” In fact, cruise currently accounts for only 2 percent of the travel and tourism sector. And with each year, the cruise industry does close that gap, with Craighead asserting that when it comes to cruising’s future, it’s “very bright.”

COVERSANDALSTable of ContentsSANDALS SPREADEditor's NotesWEBINAR HOUSE ADIndustry Insights: Cruise Industry—Overcoming Challenges & Leveraging OpportunitiesPALLADIUMAdvisor Speak: Selling Luxury TravelTURKISH AIRLINESCONDOR AIRLINES SCCONDOR AIRLINES‘A Cruise for Everyone’—Luxury Expeditions to Yacht-Style SailingsCruise: Alaska's Wonders on the MenuATLAS OCEAN VOYAGES SCATLAS OCEAN VOYAGESDISNEY CRUISE LINE SCDISNEY CRUISE LINEEMERALD CRUISES SCEMERALD CRUISESEXPLORA JOURNEYS SCEXPLORA JOURNEYSALASKA ADAsia-South Pacific CoverAsia/South PacificCUNARD SCCUNARDVIKING SCVIKING CRUISESCaribbean/Mexico: The Lavish Life—A Spotlight on LuxuryEDU HOUSE AD