When cruise lines went global

By Tom Stieghorst
*InsightIt is easy to forget that the cruise industry was not always the global, or even national business that it is today.

In the early period of modern cruising, the airlines were still regulated and selling cruises was mostly a drive-port business. I was reminded of that in talking with Carnival Corp. COO Alan Buckelew, who began his career in the 1970s at Sitmar.

Buckelew’s latest assignment takes him to China, where he will function as Carnival’s point person in that key emerging market. Buckelew said China in many ways reminds him of the cruise market in North America back in its infancy.

In the mid-1970s, Buckelew recalls, each part of the U.S. had its own cruise players.*TomStieghorst

“There were a couple of brands in Miami, one or two in New York, one in L.A., and they pretty much kept to their own neighborhoods — the Miami guys in the Caribbean, New York in the Caribbean as well, the L.A. guys in Alaska and Mexico.”

With the deregulation of airlines in 1979, flying became more affordable.

“As cruise lines began to create an air package program and began flying, more ships came into the business, and it became more of a national business rather than a regional business,” he said. “And now it’s a global business.”

As it played out, the regional cruise lines consolidated in Miami. Princess Cruises, which merged with Sitmar, and Holland America Line became part of Carnival Corp. As did Cunard Line. Another big player in the New York market, Celebrity Cruises, became part of Royal Caribbean Cruises Ltd.

Now the competitive arena has shifted to China, where, Buckelew says, “we’re back in the 1970s.”

“It’s still pretty regional, not that many guests flying to the ships,” he said. Hong Kong, Shanghai and Tianjin all draw passengers from their own geographic areas.

One big difference, however, is the scale. China’s population is four times that of the U.S. There are 24 million people in greater Shanghai alone. “When I go back home to L.A. or Miami, they seem like little villages in contrast to Shanghai,” Buckelew said.

CLIA: Capacity up in developing markets

By Tom Stieghorst
CLIA’s annual report on the economic contribution of the cruise industry highlights growth in less developed cruise territories, including Asia, the Australia/Pacific region and South America.

The report said these three areas recorded 20% capacity growth in 2013 and accounted for more than half the global increase in available bed days. Europe’s capacity growth slowed from 18% in 2011 to 3.5% last year.

CLIA said the number of passengers carried in 2013 by its member lines rose 3.9%, to 17.6 million (river cruises are not included in the tally).

Bed days increased 4.8% because the average cruise was longer and capacity was higher, CLIA said.

Passenger embarkations at U.S. ports fell 1.3%, to nearly 10 million, the first time in at least four years that happened. CLIA attributed the decline primarily to redeployments to markets more distant from the U.S.

Direct spending by cruise lines, passengers and crew in the U.S. crossed the $20 billion threshold, rising 2.4% to $20.1 billion in 2013. More than 80% of that was for wages, taxes, and goods and services. Passengers and crew accounted for $3.63 billion in spending.

CLIA member cruise lines in North America showed a net increase of one ship in 2013, to 178, with a combined capacity of 338,505 berths, the study said.

Australian cruisers increased 20% in 2013

By Tom Stieghorst
The number of Australians who cruised in 2013 rose 20%, outpacing every other sizable cruise market, CLIA Australasia said in a report.

Australia’s growth surpassed Germany (9%), France (9%), North America (3%) and the U.K./Ireland (1%), according to the report’s executive summary.

Last year, 833,348 Australians cruised, up from 694,062 in 2012.

More than 11.7 million passengers from the United States and Canada cruised last year, according to CLIA. But Australia’s growth means that 3.7% of its total population has been on a cruise, exceeding the 3.3% figure for North America.

CLIA Australasia projected it will reach the 1 million passenger threshold by 2016; a previous forecast targeted 2020.