Actual 2014 revenues came in +0.5% better than originally forecast last year, and that positive momentum is expected to continue on into 2015.

Among the 2015 foretasted highlights:

~The worldwide cruise market is estimated at $39.6 billion, up 6.9% from 2014 driven by a combination of more cruisers/higher capacity and higher prices.

~Cruise passengers carried worldwide in 2015 is forecast at 22.2 million, a 3.2% increase over 2014.

~Worldwide sourcing of passengers is expected to be 58.6% North America (Canada, United States and Mexico) followed by Europe (25.9%), Asia (8.5%) and Australia (4.3%).

~Total worldwide cruise capacity at the end of 2015 will be 486,385 passengers and 298 ships.

~The total price of an average cruise is $1779.82 per person, a 3.5% increase over 2014. The average per passenger per day spending is projected to be $222.00, with $168.43 ticket price and $53.57 on board spending (average cruise duration 8.0 days, median duration 7.0 days). 

~The top three cruise companies Carnival Corporation (NYSE: CCL), Royal Caribbean Cruises Ltd. Co (NYSE: RCL) and Norwegian Cruise Line Holdings Ltd (NASDAQ: NCLH) account for 81.6% of worldwide share of passengers carried and 76.7% of worldwide share of revenues.

Reflective of continued international growth, during 2015 the Celebrity Century will transfer to the TUI brand as the Mein Schiff 3. In addition, both Holland America’s Ryndam and Statendam will transfer to P&O Australia. Lastly, the Seabourn Legend and Seabourn Spirit will both transfer to Windstar.  Carnival, Costa and P&O Australia will combine to have 13 ships home porting in Asia and Australia, and there will be another 5 cruise ships home porting in the region under the Royal Caribbean brand.

A total of six new ships will be added in 2015 with a gain in passenger capacity of 18,813 (including the 4,200 passenger Norwegian Escape, the 4,100 passenger Royal Caribbean Anthem of the Seas, 3,611-guest P&O Britannia and 3,250 berth TUI Cruises Mein Schiff 4).

Looking out further, 15 more new cruise ships will add 39,637 or 8.1% to passenger capacity by the end of 2017 – generating $3.6 billion more in annual revenue for the cruise industry.

By 2019, 25.3 million cruise passengers are expected to be carried worldwide of which 55.8% will originate from North America, 25.1% Europe and 19.1% the rest of the world.

Zenith (Photo credit: lotsemann)

A new study aiming to discover the holiday preferences among young Britons has revealed an increase in the popularity of cruises among young adult holidaymakers.

The research was carried out and released by www.bonvoyage.co.uk; the site polled a total of 1,647 UK adults aged 18-30 on their recent holiday choices. Of those questioned, 17% stated that they had been on a cruise holiday within the past five years. 61% of these people went on the cruise with their parents and other family members, whilst 22% cruised with a partner, and 11% went as a group of friends. 5% stated that they went on the cruise alone as a part of a solo travelling gap year or work experience.

When asked if they would go on a cruise holiday again, 88% said that they would do so, with 9% stating they had already begun the booking and planning process of their next cruise. When asked to choose the main reasons as to why booking another cruise holiday appeals to them, the top answers emerged as follows:

1.       The varied activities offered on board (62%)

2.       The money-saving aspects of an all-inclusive cruise (food/drink/entertainment etc.) (54%)

3.       Less stressful to organize and book excursions (44%)

4.       The opportunity to visit multiple destinations in one holiday (37%)

5.       More appealing than alternative holiday options (23%)

bonvoyage.co.uk also noticed a 38% increase in the number of 18-30 year olds booking cruises over the past year.

Steph Curtin, Cruise Development Manager at bonvoyage.co.uk, made the following comments regarding the findings of the study:

“I cannot say that I am at all surprised that the popularity of cruises seems to be rising among the 18-30s, who are clearly bored with the traditional types of beach holidays that seem to be associated with their age groups. The fact is, that for the same price as a 2 week self-catering beach holiday, someone could get a really great all inclusive cruise.”

She continued, “There may be some sort of stereotype that cruises are only for middle-aged and elderly holiday makers, but cruise companies are continually introducing new activities and forms of entertainment on board. There are also more excursions targeted at younger people being offered to customers on board many ships.”

Anecdotally, Cruise Market Watch expects the importance of reason #2 to grow as price of air travel and hotel have increased recently relative to the price of a cruise.

Last Cruise Ship Visit (Photo credit: _setev)

The study, carried out by www.bonvoyage.co.uk was compiled from the opinions and experiences of 1,738 individuals, who had all previously been on cruise holidays. These respondents were asked to name what they felt were the most annoying tendencies of their fellow cruisers, with the top five answers as follows:

1. Mindless/Annoying chatter from fellow passengers (38%)

2. Passengers invading personal space (27%)

3. Drunken behavior (fighting, shouting, arguments) (22%)

4. Long queues at buffet/activities due to passenger’s indecisiveness (14%)

5. Irritating young children on board cruise (11%)

Various other, slightly more obscure, complaints featuring fellow passengers were collected by the cruising site whilst carrying out the poll. These included: a man on a Mediterranean cruise whose sleep was interrupted every night during his three week cruise as the couple in the cabin next to him made love very loudly, and an elderly couple who felt that they had a ghost haunting their cabin whilst they holidayed in the Caribbean.

Despite admitting that their confessions of personal annoyances were less than desirable whilst trying to enjoy their holiday, 94% of respondents questioned in the poll were quick to state that the overall of experience of a cruise is something they very much enjoyed, and that they had not been put off returning for another trip in the future.

Regarding the findings of the study, Steph Curtin, Cruise Development Manager at bonvoyage.co.uk, had the following to say:

“It is important for cruise companies to be made aware of the certain factors of holidays that customers did not enjoy, or felt could be improved. A sign of a great cruise company is one that would take these annoyances on board and actively try to improve conditions for all future passengers, and this is why the majority of cruise lines ask customers to complete a survey at the end of their cruise to highlight any areas for improvement.”

She continued, “Having said that, when taking a look at some of the more obscure answers our study revealed, I fear it may be asking too much to ask for cabins to be regularly checked for ghosts and similar paranormal goings-on!”

English: Carnival Ecstasy departing Puerta Maya Pier in Cozumel. By Andy P. Jung (Photo credit: Wikipedia)

Over the last six years the industry has adeptly managed a “great recession” and series of unfortunate, albeit historically rare, ship incidents. The Carnival Triumph (on the heals Costa Concordia the year prior) impacted Carnival Cruise Line actual revenues by about -5.8% from the original 2013 estimate (having been projected two months prior to Triumph in November 2012). The other cruise lines ended the year in line with prior estimates. Looking forward to 2014 the industry is expected to begin its normalization towards historic growth trends.

Among the 2014 highlights:

• • The worldwide cruise market is estimated at $37.1 billion, up 2.3% from 2013.
• • Cruise passengers carried worldwide in 2014 is forecast at 21.6 million, a 3.0% increase over 2013.
• • The top three cruise companies Carnival Corporation (NYSE: CCL), Royal Caribbean Cruises Ltd. Co (NYSE: RCL) and Norwegian Cruise Line Holdings Ltd (NASDAQ: NCLH) account for 79.4% of worldwide share of passengers carried and 71.8% of worldwide share of revenues.
• • Direct spending by passengers and crew at all cruise ports in the world is estimated at $18.9 billion.
• • The top two ports are Miami, FL for embarkations and Nassau Bahamas as destination.
• • Total worldwide cruise capacity at the end of 2014 will be 453,211 passengers (a 3.2% increase over 2013) and 292 ships.
• • The average per passenger per day spending is projected to be $214.44, with $162.69 ticket price and $51.74 on board spending (average cruise duration 8.0 days, median duration 7.0 days).

A total of six new ships will be added in 2014 with a gain in passenger capacity of 17,410 (including the 4,000 passenger Norwegian Getaway, the 3,600 passenger Regal Princess, 2,500-guest Mein Schiff 3 (Tui Cruises), 3,000 berth Costa Diadema and 4,100 passenger Quantum of the Seas. Looking out further, 17 more new cruise ships will add 41,162 passenger capacity or 9.1% to passenger capacity by the end of 2016 – generating $3.4 billion more in annual revenue for the cruise industry.

By 2018, 24.1 million cruise passengers are expected to be carried worldwide of which 58.8% will originate from North America and 27.2% Europe.

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English: The Celebrity Millennium cruiseship docked in Nassau, Bahamas (Photo credit: Wikipedia)

After the recent mechanical issues with the Celebrity Millennium, Royal Caribbean Cruises Ltd., which owns Celebrity Cruises, announced Tuesday the cancellation of the remainder of the ship’s seven-night cruise to Alaska and four additional cruises, when a faulty propulsion caused the return to port in Ketchikan on August 18. At the time, about 2,200 guests and nearly 960 crew members were on-board. The company will offer full refunds to all passengers who have been stuck in Ketchikan and also to guests booked on the other canceled sailings, as well as a certificate for a future cruise.

Lost revenue will show in many forms, including costly repairs of the vessel and lost on-board revenue. Based on actual ticket pricing, Cruise Market Watch estimates lost ticket revenue of $13,851,093:

Only time will tell if the unknown variable of customer sentiment will correlate to an additional effect on incremental sales, but our guess is that even naysayers would have a difficult time saying no to a $31.76 dollar/day 16 day cruise to Southern Europe on board of the Carnival Sunshine, which according to our database is the cheapest inside cabin on a per passenger per day basis that you could book.  Happy sailing!

Sources:  Each ship's unique destination itinerary, sailing days and passenger capacity from Cruise Market Watch.  Crew and passenger debarkation rates and port spending estimates derived from Business Research & Economic Advisers, Florida-Caribbean Cruise Association and Cruise Lines International Association.

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Unloading relief supplies on Carnival Splendor 2010-11-09 2 (Photo credit: Wikipedia)

The “Pop Tart Cruise” on Carnival Splendor November 2010 was greeted with curiosity and had little impact to bookings or ticket prices.  The Costa Concordia January 2012 incident was greeted with shock.  Bookings and prices did drop and while they have since recovered; public consciousness of the event still hasn't gone away (and either has Captain Schettino).  I get the sense the “Cruise from Hell” on the Carnival Triumph February 2013 is being greeted with “enough is enough.”

Sure, with over 10,000 annual cruise sailings every year there are little things that can happen to cruise ships (pier bumps, rouge waves etc.,).  And with a seven percent compounded annual growth rate, the likelihood of such events simply continues to be multiplied.  Nevertheless, when a company dusts off the pre-Concordia advertising campaign themed “Land vs. Sea” to run in the subsequent year’s wave season, one is tempted to question good judgment.

I know.  Memories are short.  The media will move on to new stories.  Carnival obviously overcame the fact its first cruise ship, the Mardi Gras, ran aground on a sandbar during its inaugural voyage in 1972.  And don’t expect any instant drop in ticket prices. Prices for close-in sailings (those sold one to three months in advance of departure) took five months after Concordia to bottom in June 2012 .

The direct impact to the bottom line can be quantified by simply accounting for the 14 canceled Triumph sailings scheduled between Feb 11th and April 13th 2013, plus the ill-fated Feb 7th voyage.  The amount totals $20.8 million in revenue according to Cruise Pulse.  Based on the Splendor being off line 101 days, we believe Triumph guidance of 71 days is overly aggressive and the Triumph will likely cancel 7 more cruises up to the May 5th sailing, adding $9.8 million to lost ticket revenue.

But unfortunately the story may not end there.  On the margin, where cash from ticket revenues meet up with corporate expenses this event will continue to be felt.  Not exactly what an industry wants at a time when they are already being squeezed by a slowing European economy and the specter of inflation to costs for fuel and victualing.

When prospective cruisers hear Triumph passengers saying: “The credit, refund and $500 aren't really important. It’s not about the money.  We will pay Carnival anything just to let us off the ship.”  You have to wonder, will this time be different?

Repeat customers and die-hard cruisers will just get more bargains.  And when prices get low enough, it is amazing how memories fade.  But no spin can turn this publicity into a good thing for the industry.  In order to attract the best talent to work aboard ships, continue to penetrate the large “never before cruised” market and stay the course with investors attracted to exponential passenger growth these events can’t continue.  With 10,000 more "at bats" over the next year, getting wood on the ball 99.99% of the time so 20.9 million cruisers all leave happy and share their positive experiences is critical.  In the interim, Cruise Market Watch will continue monitoring the ticket revenue and pricing trends.

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MS Ryndam in Cozumel. (Photo credit: Wikipedia)

The Costa Concordia and European sovereign debt crisis impacted all cruise line revenues by about -5.1% from our original 2012 estimate (made two months prior to Concorida in November 2011).  The actual revenue versus forecast difference was largest for Carnival Corporation (-9.2%) compared to -2.5% for Royal Caribbean Cruises Ltd. Passengers carried however continued to climb.  Compared to our original 2012 forecast of 5.6% growth, actual results were very accurate.  Carnival was down just -0.9% while Royal Caribbean was up 0.3% versus original estimates.  All-in-all, 2013 looks to rebound strongly from the year prior on all accounts.

Among the 2013 highlights:

• - The worldwide cruise market is estimated at $36.2 billion, up 4.8% from 2012.
• - Cruise passengers carried worldwide in 2013 is forecast at 20.9 million, a 3.3% increase over 2012.
• - The top two cruise companies Carnival Corporation (NYSE: CCL) and Royal Caribbean Cruises Ltd. Co (NYSE: RCL) account for 71.7% of worldwide share of revenue
• - Direct spending by passengers and crew at all cruise ports in the world is estimated at $17.5 billion.
• - The top two ports are Miami, FL for embarkations and Nassau Bahamas as destination.
• - Total worldwide cruise capacity at the end of 2013 will be 438,595 passengers (a 3.0% increase over 2012) and 283 ships.
• - The average per passenger per day is projected to be $200.85, with $152.39 ticket price and $48.47 on board spending (average cruise duration 8.5 days, median duration 7.0 days).

A total of six new ships will be added in 2013 with a gain in passenger capacity of 14,074 (including the 3,600 passenger Royal Princess, the 4,010 passenger Norwegian Breakaway, 2,192-guest AIDAstella and 3,502 berth MSC Preziosa).  Looking out further, 13 more new cruise ships will add 39,297 lower births or 8.9% to passenger capacity by the end of 2015 – generating $3.2 billion more in annual revenue for the cruise industry.

By 2017, 23.7 million cruise passengers are expected to be carried worldwide of which 59.1% will originate from North America and 27.4% Europe.


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Interestingly, unlike its European infograph counterpart, Caribbean cruises get more expensive each month closer to the sail on date - so no penalty for booking well in advance!

^* Cruise Market Watch total weighted average price (per per person per day) across all cabin categories.

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