Will wave season produce the level of growth the cruise industry expects?
Report Available: January 11, 2017
Blueshift’s initial research shows the cruise industry enthusiastic about its growth potential in 2017 with the Caribbean, Alaska, Europe and Latin America all expected to be popular destinations in the new year. Cruise companies are also benefiting from lower fuel costs, better margins, and investment in their fleets. The greatest threat to a successful wave season appears to be an economic slowdown and the ever-present headline risk.
- Positive signs for a strong 2017 abound throughout the cruise industry:
- EXPE’s CruiseShipCenters President Matthew Eichhorst is optimistic about 2017, noting the Caribbean and Alaska as ever popular destinations.
- RCL’s CEO is bullish on 2017 stating that the Latin America market has seen an upswing, and that bookings for 2017 are looking up. He added that Alaska and the Caribbean saw high demand during the summer months.
- Cruise Lines International Association’s (CLIA) European chairman forecast continued growth for the cruise industry in Europe.
- CCL’s CEO believes the industry is in position to grow, with more people cursing and an escalation in the number and types of ships available. He expects China to become the largest cursing market in the world, but it will take time.
- Cruise ships brought 1 million passengers into Alaska in 2016 and more are expected in 2017. CCL and RCL have increased prices for their Alaska cruises and CCL is planning to increase its capacity in 2017.
- Seattle is also expecting an 8.8% increase in cruise passengers in 2017 which will set a record and exceed 1 million visitors.
- Despite the increase in online travel agents, brick-and-mortar travel agencies have benefited from the cruise industries’ continued growth with their 2016 bookings hitting an all-time high. This has led CCL to ramp up its agent incentives and training and cut back on direct marketing for 2017.
- The primary challenge that could derail the cruise industry’s anticipated growth would be a downturn in the economy that would lead to considerable overcapacity. Also, cruise lines continue to be at risk of negative headlines, including a recent ruling that CCL must pay $40 million dumping oil and covering it up.
- Blueshift’s Jan. 8 cruise industry report found expectations for a strong wave season with improved bookings and pricing year to year with the exception of the China market where booking were increasing, but pricing had declined.
Will travelers book 2017 cruises at anticipated levels? Will travel agents continue to experience strong cruise booking trends throughout 2017? Are cruise bookings in China on trend for continued growth? How will CCL’s marketing shift from direct to trade marketing impact bookings? How will the high demand levels impact cruise pricing? How will the introduction of additional cruise capacity impact pricing? To gain insight into the cruise line industry and wave season booking trends, Blueshift will gather data and issue a market research report from independent sources in the following areas: Travel agents in the U.S., Travel agents in China, Travel agents in Europe, Suppliers, Port cities, and Industry specialists.
Companies: Royal Caribbean (RCL), Carnival (CCL), Norwegian Cruise Line (NCLH), Disney (DIS)
Research Begins: Dec. 19, 2016