The Cruise Industry An Overview of the Industry and the Market Short History of Cruising • 1966: Norwegian Caribbean Line marketing cruises from Miami to the Caribbean. • 1969: Royal Caribbean Cruise Line formed. • 1970: 500,000 North Americans take cruises. • 1972: Carnival Cruise Lines formed. Short History of Cruising • 1983: Premier Cruise Lines (The Big Red Boat) founded. • 1988-91: Carnival takes control of Holland America, Windstar, and Seabourn. • 1998: 5.4 million North Americans take cruises. • 1999: Royal Caribbean launches the world’s largest cruise ship, Voyageur of the Seas. The Cruise Market • The North American cruise passenger market has shown continued growth from 1970 to 2005; 500,000 to over 5 million. • North Americans constitute the largest share of the world cruise passenger market. The Cruise Market Source: Berlitz Complete Guide to Cruising The Cruise Market Millions of North American Passengers Cruise Destinations • According to CLIA, Caribbean/Bahamas = the proportions of 42% cruise ship capacity Europe = 20% sailing various Alaska = 9% regions in 1999 was: Panama Canal = 6.6% Pacific coast of Mexico = 5.5% Bermuda = 3.2% Other = 13.7% CLIA • http://www.cruising.org/ • The official association of cruise lines operating in the North American market, located in New York city. Founded around 1975. • Has 25 cruise line members, operating 127 ships and representing 97% of the North American cruise market. CLIA • Operates training programs for travel agents. • Appoints CLIA-Affiliated Travel Agencies and Certified Cruise Counselors. • Promotes cruising to and provides information on cruises to travelers. • Conducts research on the cruise market and keeps cruise demand and cruise line capacity statistics. The Cruise Lines • CLIA estimated there are 30 cruise lines operating 140 ships serving the North American market with a total capacity of 154,841 berths. New Cruise Ship Construction • According to CLIA, 60 new ships will be added by 2005. • Several new cruise ships will accommodate 3,000 or more passengers (e.g., Carnival, Royal Caribbean) and cruise at speeds of 27 knots per hour (about 31 mph). Cruise Ship Organization Source: A cruise ship is not just a floating hotel, Mitchell R. Less Cruise Line Marketing and Distribution Strategies • Cruise lines almost exclusively use travel agencies as a source of reservations. There is a strong bond of mutual dependence between cruise lines and travel agents. • Cruise lines are great at relationship and database marketing, Cruise Line Marketing and Distribution Strategies • Cruise lines are especially good at programming through theme cruises: Cunard: Murder Mystery, The Monte Carlo Murders, Tribute to Gershwins. Norwegian: Sports Afloat Cruises, Sports Illustrated Afloat Cruise. http://www.ncl.com/html/themes/th_home.htm Crystal: Big Band & Jazz Series, Wine & Food Festival. Cruise Line Marketing and Distribution Strategies Holland America: 50s Sock Hop, $25,000 Bingo, Health and Wellness. Seabourn: 20th Century Fox Film Retrospective. Silversea: Le Cordon Bleu Academy. American Hawaii: Pearl Harbor Remembrance, Whales in the Wild. Trends in the Cruise Industry and Market • According to Vicki Freed, Chairman, CLIA: 1. Cruise lines will continue to add unique design features to ships. 2. Cruise lines will continue to find better ways to present an itinerary and to better serve passengers. Trends in the Cruise Industry and Market 3. The passenger mix will include more first-time cruisers, families, and young adults. 4. The cruise industry will continue to grow and evolve. 5. Cruise vacations will increase in popularity. Trends in the Cruise Industry and Market • Cruise lines will continue to build new ships and add to the mix of onboard entertainment and recreation features. • Increased regulation of cruise line industry by U.S. government agencies. • Continuing growth and popularity of theme cruises. The top five U.S. cruise port cities are • Miami, Fort Lauderdale, Port Canaveral, Los Angeles and New York Cruise Industry • Fastest Growing Segment of the Travel Industry • Since 1980 had an average growth rate of 7.6% • Expanding fleets Cruise Industry • Fastest Growing Segment of the Travel Industry • Since 1980 had an average growth rate of 7.6% • Expanding fleets The Love Boat • 1977-1986 Television Series aired • Princess Cruise Lines • Loveboat.com Impact on Traditional, Land- Based Resorts • Cruise lines already offer strong competition to traditional resorts, but have not greatly penetrated the U.S. vacation market yet. Only 11% of Americans have ever cruised. • 75 million say they want to cruise in the next five years; 56% of all American adults. • Major increase in cruise line capacity expected, so competition to traditional resorts will increase in future.