Market snapshot: Cruising

06 July 2005
Market snapshot: Cruising

The market

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UK Cruising is the fastest growing sector in the UK travel industry worth around £1.24b in 2004 and the UK is now the second largest cruising market in the world after the USA. British people took more cruises than any other country in Europe in 2004, according to the Passenger Shipping Association (PSA). The figures from the PSA in its annual cruise report showed 1.03m Brits took a cruise last year, a 7% rise on 2003, compared with 551,000 Germans and 400,000 Italians. PSA director William Gibbons said the cruise industry now represented 5% of the UK package holiday market and was set to grow even further. "With the current rate of growth, I anticipate that we will reach 1.5m ocean passengers by 2010."Worldwide Worldwide cruise passenger numbers grew 8.4% to 13.4m in a year when capacity increased by a similar percentage. Only four new ships are scheduled to be delivered in 2005 compared with an average of 10-12 ships in each of the last four years. But the number of new ships begins to accelerate from 2006 so passenger numbers should keep pace and reach 15m worldwide in 2006 and 20m by 2012. The Cruise Lines International Association with its 19 member lines represents about 80% of worldwide capacity and carryings. It achieved a 11.4% increase to 10.6m passengers in 2004 and is projecting 4.7% growth to 11.1m in 2005. Key players The cruise market is dominated by large corporations. Carnival Corporation is the largest global cruise company with 13 brands. These include the well-known names of Carnival Cruise Lines, P&O Cruises, Princess Cruises, Cunard Line, and Seabourn Cruise Line. In addition it owns Windstar Cruises, OceanVillage, Swan Hellenic, Aida and Arosa. Royal Caribbean Cruises which has merged with Celebrity Cruises and Star Cruises which owns 21 ships sailing under the brands of Star Cruises, Norwegian Cruise Line and Orient Lines are also key players. Carlson Companies is one of the USA's largest independently owned companies and owns Radisson Seven Sea Cruises through its Carlson Hospitality Worldwide division. Independents include Silversea Cruises, Disney Cruise Line, Saga and Hebridean Island Cruises. One of the newest entrants into the cruise sector is Stelios Haji-Ioannou with his EasyCruise concept, where cruisers pay budget prices with a minimum two-night stay. Key trends Anything goes it seems in cruising. Whether for families, younger people, gay people and those in search of unadulterated luxury, cruising has widened its remit. It is no longer just the domain of the blue rinse brigade playing deck quoits and hobnobbing with the captain at cocktail parties. "The old image of cruising as only for the more mature and affluent has changed and companies are now targeting different market segments," confirms Russ Simove, cruise seasonal manager at recruitment consultants Berkeley Scott. Cunard's Queen Mary 2 (QM2) when it launched at the beginning of 2004 attracted the media spotlight with its impressive statistics. What other vessel could boast that it was the largest, longest, tallest seafaring ship, as long as 41 double-decker buses, a "city at sea" complete with a planetarium and a basketball court? QM2 set the standard in luxury liners and was followed this year by P&O's superliner Arcadia, a child-free state of the art luxury ship with huge cabins and power showers. As cruise ships push for an even greater slice of the tourist action this trend in luxury cruising seems likely to continue. At the opposite end of the spectrum the high profile Stelios has attracted many column inches in national newspapers with his launch of easyCruise, the first concept to add budget cruising to the market. Four-berth cabins without windows start from as little as £33 per night. The concept has provoked mixed reactions with many reviewers commenting on the "orangeness" of the ship and the "box like" nature of some of the cabins whilst others have praised the "what you see is what you get" factor. What does seem evident is that these floating hotels are mirroring their landlubbing cousins with offerings that generally seem to fit in either the budget or the luxury sectors. Other trends look set to be in niche sectors. These include gay and lesbian cruises, and cruises aimed at families. "Plus-sized women" are even being targeted for a week-long cruise on board Carnival Cruise Lines' newest ship Carnival Valor this autumn. And you can't get much more niche than that. Future prospects In general terms most nationalities are set to embrace cruising even further in the future, according to the PSA. Germany remains the largest market in Continental Europe with a 4.3% rise to 551,000 passengers per year and is on target to reach one million cruise passengers somewhere between 2011 and 2014. Although 50% of German ocean cruise passengers are 56 or over the average age is just 48. The UK cruise market is a success story in its own right and nothing it seems can stop its growth. UK cruise bookings have nearly quadrupled in 10 years, a period when the overall foreign holiday market has grown about 50% and the package holiday sector by just 30%. More than one in 20 UK holidaymakers booking a package is now choosing to cruise compared with less than one in 25 in 2001 and less than one in 50 just 10 years ago. In terms of destinations the Baltic states and the Norwegian Fjords remain top of the UK list. And with more ships operating out of UK ports there should also be an increase of shorter cruises, 2-7 days to UK and other western ports. EasyCruise may have provoked mixed reactions, but its launch is likely to give cruising a higher profile and attract more young people to the cruising scene. It will also alter the nature of cruising with its hop on hop off concept, focusing on the destination rather than on the ship itself.
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