CLIA: Cruise Industry Continues to See ‘Steady Growth’

The worlds largest cruise ship, the 361 metres long, Harmony of the Seas, arrives in port  for her mayden voyage, in Southampton, Britain May 17, 2016.  REUTERS/Peter Nicholls

The worlds largest cruise ship, the 361 metres long, Harmony of the Seas, arrives in port for her maiden voyage, in Southampton, Britain May 17, 2016. REUTERS/Peter Nicholls

The international cruise industry is continuing to see a steady pace of cruise travel interest and significant investment in the industry, according to the Cruise Lines International Association’s 2017 State of the Cruise Industry Outlook report.

In the report, released Friday, the world’s largest cruise industry association says cruise travel is expected to continue to increase in 2017, with an estimated 25.3 million passengers expected to cruise during next year. This represents a strong surge from the 15.8 million passengers who took cruises just ten years ago, in 2007, CLIA says.

More ships are set to set sail in 2017 as well. CLIA reports that cruise lines are scheduled to debut 26 new ocean, river, and specialty cruise ships in 2017 representing a total investment of $6.8 billion. Over the next ten years, the industry is expected to introduce a total of 97 new cruise ships, marking an estimated investment of $53 billion through 2026.

“The cruise industry is responding to global demand and we are highly encouraged by both the short-term and long-term outlook,” said Cindy D’Aoust, president and CEO, CLIA. “From technological advancements and deployment of new ships to new ports and destinations around the world, the industry continues to respond to desires of today’s travelers resulting in steady growth and strong economic impact around the world.”

In 2015, cruise industry expenditures generated $117 billion in total output worldwide, supporting 956,597 full-time equivalent employees collectively earning $38 billion in income, according to new figures released by CLIA.

Along with the new data, CLIA also provided its list of the top eight cruise travel trends to watch next year. The list is provided below:

  1. New Generation Takes to the Water – A recent study found that younger generations—including Millennials and Generation X — will embrace cruise travel more than ever before, rating it as better than land-based vacations, all-inclusive resorts, tours, vacation house rentals, or camping.
  2. Travel Agent Use Increases – According to the American Express Spending & Saving Tracker, consumer use of a travel agent increased nearly eighty percent from 2015 to 2016. Supporting this, CLIA is forecasting that travel agents will continue to be the matchmakers between travelers and cruise lines in 2017. Today, there are more than 25,000 CLIA-member travel agents globally compared to 12,000 in 2010. CLIA also found that cruisers report high levels of satisfaction with their travel experience when assisted by an agent.
  3. River Cruise Demand Increases – River cruises offer travelers a unique and intimate travel experience. Due to demand, CLIA cruise line Members currently deploy 184 river cruise ships with 13 new river cruise ships on order for 2017, an increase of about 7 percent.
  4. More Private Islands on Cruise Itineraries – As more cruise lines introduce private island destinations, travellers are responding and booking these itineraries. In 2017, cruise lines offer ports on a total of seven private islands.
  5. New Cruisers Will Take to the Sea – Interest in ocean cruising is projected to remain strong in 2017. When asked what kind of vacations might be of interest in the next three years nearly half (48 percent) of non-cruisers expressed interest in taking an ocean cruise while a striking 85 percent of cruisers also expressed interest.
  6. Drivable Port Locations in Favor – The cruise industry offers a variety of small and large market port location options across the United States and internationally. Citing the advantages of a myriad of locations seven out of ten (69 percent) non-cruisers believe the greatest benefit is cost savings and three quarters (74 percent) of cruisers like the convenience of driving to a cruise ship.
  7. Lure of Celeb Chefs – Cruise travelers are embracing specialty dining and will continue to consider cruise dining experiences based upon celebrity chefs. This year, several cruise lines feature restaurants and dishes created by famous chefs including Guy Fieri, Nobuyuki “Nobu” Matsuhisa and Geoffrey Zakarian.
  8. Demand for Expedition Cruises – According to the Adventure Travel Trade Association, adventure travel is growing at a record pace and CLIA is reporting that cruise expeditions are seeing the impact. In fact, itineraries for Antarctica regularly sell out.

River Cruising Grows Up

Baby Boomers Are Jumping On BoardAvalon new head

It’s no coincidence that river cruising continues to boom as Baby Boomers expand on their collective purchasing power. The last of the Baby Boomer generation reached 50 in 2014, and today, this generation comprises the most powerful consumers in the marketplace. Baby Boomers are 77 million people strong—and they outspend other generations by an estimated $400 billion each year on consumer goods and services, according to the U.S. Government Consumer Expenditure Survey.

And while some of their priorities might vary, if there’s one thing Boomers do agree on, it’s the importance of spending money on travel. AARP’s 2016 Top Travel Trends found that an astounding 99 percent of the Baby Boomers they surveyed intended to travel this year, with 45 percent expecting to take an international trip. Reinforcing this finding, British Airways recently surveyed over 2,000 U.S. Baby Boomers (55 and over) and discovered that not traveling enough is one of the biggest regrets for one-fifth of the respondents when thinking back on their life so far.

“Generational values tend to be persistent through time, and the desire for adventure and learning have been in existence since this generation was in its formative years,” says Brent Green, a writer, speaker and trainer about marketing to the Baby Boomer generation.

“I started my own international journeys at age 50 with the intention of getting my most active travel done before I hit my 80s,” says Green. “That’s the way my wife and I proceeded to do it, and we’re not atypical—that’s reflective of the overall Boomer propensity for adventure and active travel.”

The Rise of River Cruising

The journey itself is the experience on a river cruise, with cities and towns strung like pearls along the waterways. Europe is usually the first destination people choose, but as Patrick Clark, the managing director for Avalon Waterways calls it, the “river cruising travel style” is available around the world. That makes river cruising a great repeat option for travelers, with an ever-growing array of possibilities.

Image result for yellow river cruise
Kakadu & East Alligator River Tour

“Once they’ve experienced it, people come back and choose river cruises in other destinations,” says Clark. “They want to enjoy that familiar experience of cruising on the river, whether it’s in Vietnam, Cambodia, China or the Amazon. For some of these more exotic destinations, it’s even more comforting for them to know they have the familiar ship, crew and food waiting for them at the end of the day.”

That’s one of the reasons river cruising has become the travel industry’s fastest-growing segment, with double-digit growth last year. Overall, it’s now one of the top three international travel destinations, up from #4 in 2015, according to a Travel Leaders Group survey this summer. The trend is even stronger among well-heeled travelers, with river cruising cited as the top travel trend (along with multigenerational travel) in the 2016 Virtuoso Luxe Report, sponsored by the international network of luxury travel agencies. 

Trish Mercer, a home-based Virtuoso travel agent in Columbus, Georgia, touts the ease of the travel experience as one reason that river cruising is “absolutely, positively going up” in popularity. “There’s almost always something interesting to see while you’re sailing, and then you pull up to shore and have the opportunity to be involved in things right away,” she says.

Mercer’s experience is echoed by travel agents who participated in the third Travel Agent Cruise Industry Outlook Report of 2016 by Cruise Lines International Association (CLIA)—more than six out of 10 (64 percent) expected to sell more river cruises this year. 

“River cruising is a great option for travelers who are looking to explore multiple memorable destinations in one vacation,” says Lorri Christou, SVP of strategic communications and marketing for CLIA. “River cruises offer an intimate and immersive experience for people to explore new and different cultures.” 
    

A Perfect Fit for Boomers

“When you look at river cruising, Baby Boomers represent the core of all the travelers on cruise ships,” says Clark. “That segment is living longer and they have a greater desire for travel than their parents.”

And as river cruising continues to develop and mature, increasingly sophisticated amenities are being offered that appeal to Boomers and differentiate the river cruise experience from a land tour or an ocean cruise.  “There’s more interest now in what’s happening with the cruise’s themes rather than just the destination, including a focus on things such as wine, heritage and biking,” says Daniela Harrison, a river cruise specialist with Flagstaff, Arizona-based Avenues of the World Travel. “Cruisers want a unique focus on the sightseeing portion.”

Baby Boomers are looking for all that and more. Here’s a look at five major trends in river cruising that Boomers are seeking out in their travel.

The Joy of Discovery 
First and foremost, travelers crave the unknown, and that makes discovering unique places the No. 1 must-have experience among Virtuoso’s Top Travel Trends for 2016.

Harrison hears that “more so with river cruising than anything else,” because it allows Boomers to explore a variety of places. “They want itineraries with multiple ports in a country that are close to each other so they get to know the region in depth, like sailing the northern part of the Rhine,” she says. “Plus, the excursions are more hand-crafted on a river cruise, and there’s more free time to stroll through the city afterwards to take it all in.”

It’s not hard to see the appeal for explorers when simply sailing down a river is such an ongoing sensory treat. “They’re interested in the scenery and what’s passing before their eyes constantly,” says Mercer.

Meaningful Experiences

Image result for yellow river cruise

Another must-have reported by Virtuoso’s travel advisors is the quest for experiential travel in order to create the unforgettable memories travelers are looking for from a vacation. “Baby Boomers want to take a much deeper dive into a destination,” says Green.

He points out that immersive travel engages people in the “flow experience,” a phenomenon where travelers become intensely focused on the activity itself. “The flow experience increases mindfulness and overall contentment with what you’re doing and you become more productive. It’s not enough to just see the sights, you have to dive deep and engage in it. That’s the direction all smart travel is going for Boomers.”

Theresa Mullen with Enchanted Waterways agrees that river cruising gives people a story to take back home. “In addition to the included excursions, the optional excursions offer river cruisers the opportunity to enjoy cultural activities such as a Viennese evening concert or being welcomed into the homes of locals to enjoy home-made refreshments and conversations about their lives; visiting local schools and engaging in activities with students; and enjoying cultural presentations. On board, cruisers will enjoy dining on wonderfully prepared local cuisine, local guest lecturers and entertainers sharing their lives through history and local song and dance.”

Traveling with Family
An important part of creating meaningful memories comes from sharing those experiences with the people you’re closest to. Though river cruising has been traditionally considered a couples’ vacation, there’s been a recent rise in multigen travel on river vessels.

“Multigenerational travel is an indication of our times,” says Clark. “Everyone has busy lives and they don’t always have the time they want to spend together as a family. It’s often on a vacation that families reconnect. Where we see it the most is the Christmas Markets in Europe in December, and we also see it around theme cruises that focus on food, wine and music.”

Image result for Christmas markets cruise

Not only does this include younger Boomers and their parents, it also means Boomers are traveling with their young-adult children. “I see more of the older millennials taking their Boomer parents and treating them to the cruise,” says Harrison. “They usually tend to do the more active itineraries.”

Healthy Activities
An emphasis on health and well-being is another key element for Boomers, who are living more active lifestyles and looking to maintain those lifestyles even while traveling. “In how they’re leading their lives in terms of diet and exercise, they’re much more conscious of taking care of themselves than perhaps the focus was of the previous generation,” says Clark. “River cruising is appealing to the Boomers who are attracted to a more active life.”

To meet the demand from cruisers, more adventure excursions are being offered as part of the experience, whether it’s going for a horseback ride over the hills or canoeing down the river.

“One thing that is really nice about a number of river cruises is they bring along bicycles, either traditional or electronically enhanced bikes that are very easy to ride,” says Mercer. “On some ships, you can ride 10 or 20 miles to the next stop and the people who don’t want to bike that day can stay on board. It’s something for everyone at every level.”

Hassle-Free Travel
The ease and convenience of sailing to multiple destinations along a river, without having to pack and unpack or deal with different hotels and transportation, is very appealing to Boomers. They want something new and exotic without a lot of the stress and inconvenience associated with traveling. River cruising suits that desire—it’s like staying in an intimate boutique hotel that floats from one destination to the next, making it an independent but controlled experience.

“You have some Boomers who are completely self-propelled, like two couples traveling together,” says Green. “On the other hand, there are other people who want the fully catered vacation where they show up and everything is handled from that point on and they don’t have to do a thing. Then there are those who want the hassles removed, but they want to be able to plan their own details.”

River cruising offers that flexibility, with the added benefit of all-inclusive pricing. “Now almost all river cruises are all-inclusive, so that peace of mind is very nice,” says Harrison. “Travelers have a wide selection of excursions they can choose from as part of the cruise, or they can walk off, do their own thing and add a little adventure of their own. It empowers the traveler to know they can’t make the wrong choice.”

Familiar themes emerge at CruiseWorld China

From left: Alan Buckelew of Carnival Corp., Adam Goldstein of Royal Caribbean Cruises Ltd., Frank Del Rio of Norwegian Cruise Line Holdings and Gianni Onorato of MSC Cruises.

BEIJING — To U.S. travel agents, the themes that emerged from this week’s CruiseWorld China might have seemed reminiscent of issues that surfaced over the past three decades of cruise industry development in the U.S.

“We need to bring across the idea that the cruise is the destination, instead of just a mode of transportation,” said Zheng Weihang, executive vice president and secretary general of the China Cruise & Yacht Industry Association.

Adam Goldstein, chairman of CLIA and president and COO of Royal Caribbean Cruises Ltd., added: “A vast number of people have no idea what a cruise vacation is about, what happens onboard and how it offers great value.”

And Anthony Kaufman, executive vice president of International Operations for Princess Cruises, counseled that a travel agent’s responsibility includes “understanding the uniqueness of each cruise product and imparting that knowledge to the consumers.”

Although much of the conversation sounded like Cruise Sales 101, not all of the issues facing a quickly-growing, rapidly evolving industry have a North American parallel. The vast majority of cruises in China are charters, with cabins sold by a handful of mega-agencies, some of them larger than the cruise lines themselves. They, in turn, rely on a network of sub-agencies to help them fill ships.

The sustainability of the charter model was called into question by most of the cruise executives present, though none called for abandoning it outright. The general consensus was that it has helped the market get to where it is today, but more diversity in sales options will be healthier for long-term growth.

Calling charters a “force-feeding” model, Zinan Liu, Royal Caribbean International’s president of China and North Asia Pacific region and chairman of CLIA North Asia, said the charter model was successful in the past six years when consumer awareness was low and the sales force of cruise lines small. He predicted it will likely continue to coexist with other distribution models.

Kaufman noted that it continues to be the foundation for China’s cruise market and at present enables travel agencies to maintain better control of the customer experience and pricing. But, he said, whether it continues to dominate might depend on individual company strategies.

That each of the four largest cruise lines was represented by a top corporate executive suggests that China’s potential is still very much front of mind:

• Carnival Corp. COO Alan Buckelew provided an overview of the company’s 10 brands and revealed that the most luxurious Princess ship yet built will sail Chinese waters.

• Goldstein wore two hats. As chairman of CLIA, he provided an overview of industry growth, with a focus on China, and as president and COO of RCCL, he promoted Royal Caribbean International ships.

• Norwegian Cruise Line Holding Ltd. CEO Frank Del Rio provided updated details about the Norwegian Joy, a ship being built specially for the Chinese market, whose inaugural cruise is slated for June 23.

• MSC Cruises CEO Gianni Onorato provided more details after having announced the day before that a second ship, the Splendida, would be heading to China to join the Lirica.

In addition to the international development and regional line executives quoted above, onstage were Buhdy Bok, president of Costa Group Asia; David Herrera, president of Norwegian Cruise Line Holdings China; Roger Chen, chairman of Carnival Corp. China; Harry Sommer, executive vice president for international development at Norwegian Cruise Line Holdings; Helen Huang, president of Greater China, MSC Cruises; and Fan Min, chairman and CEO of SkySea Cruise Line.