Seatrade 2008
The State of the Cruise Industry
by Linda Coffman
Miami Beach, March 2008
—
In many ways, my
colleagues and I agree that Seatrade marks the beginning of the
cruise year.
It brings together cruise industry leaders, suppliers, and naturally
the press. If I were forced to
describe this year's 24th annual Seatrade Cruise Shipping Convention
in two words or less, they would be international and
ambitious.
International because the
cruise industry is not only sailing to far-flung regions of the
world, it is also expanding its marketing efforts for global growth.
Not only is Europe playing a strong
role as a destination, it is a
source of new passengers. The European market is growing in much the
same way as the North American market did in the 1980s and 1990s.
And the industry is ambitious because a new
cruise ship will be delivered every 32 days on average from now to
2010 and, if placed end-to-end,
the ships currently on order would stretch a whopping six miles. However, don't look for all those ships in North America. Even
with more berths available in the Caribbean, the largest increase is
in Europe.
Although the United States news
media is full of economic gloom-and-doom stories, Cruise Lines
International Association forecasts that 12.8 million passengers
will sail on CLIA-members' expanding fleets in 2008. Travel agents surveyed by CLIA are optimistic that 2008
will be an even better year than 2007. Ships are sailing at over
100% occupancy and now, more than ever, a cruise is the most
cost-effective way for Americans to visit Europe.
While industry executives still
consider the Caribbean a strong region and North Americans to be
their largest passenger base, there is concern over where the U.S.
economy is headed. During the State of the Industry Debate, Dan
Hanrahan, President & CEO of Celebrity Cruises and Azamara Cruises
pointed out that the cruise industry is historically "recession
resistant, not recession proof." With middle income consumers
already feeling the crunch of higher gas prices and lower home
values, ships can move to parts of the globe where economies are
stronger.
Jerry Cahill, President & CEO of
Carnival Cruise Lines stated that while most North American
consumers are feeling the effects of a poor economy, they won't give
up their vacation plans; they will simply scale back on expenses.
While a cruise is a discretionary expense, it is also a good value.
Cahill feels the cruise industry is "well positioned in uncertain
economic times" because of its greater resiliency to bounce back
faster than other travel segments.
After forty years of growth despite
obstacles, Rick Sasso, President & CEO of MSC Cruises (USA), says
that North America is the most penetrated region of the world, yet
is still under-penetrated in comparison to land-based resorts and
holds enormous potential. According to Sasso, "The sea is the limit
and unless the oceans of the world dry up, you'll see growth in the
cruise industry."
Colin Veitch, President & CEO of
Norwegian Cruise Line pointed out that the American population is
aging, most are employed, have disposable income, and want to go on
vacations. He stated that the "cruise industry's vote of confidence
in Europe is not a lack of confidence in the Caribbean." Of course,
that's good news for us in the United States and Canada.
What can avid cruisers expect to
see in the future? Adam Goldstein, CEO of Royal Caribbean
International coined a new term: "disegalitarianism"--meaning that
wherein all passengers were equal in the past, there's a change
afloat. Passengers who pay more are now expecting more; they expect
special treatment and a more exclusive experience. With the
increasing diversity of passengers' tastes, cruise lines are
responding with intriguing features to pique their interest. Cahill
describes that trend as not different "classes" aboard, but different
areas, or components, to appeal to different kinds of people. Veitch
pointed out that NCL's "ship within a ship" concept is working well;
there's clearly a market for passengers who want large ship
amenities, yet with an exclusivity that they are willing to pay for.
On the Seatrade convention floor
there was a noticeable difference from
just eight years ago. In size, the convention space has mirrored the
growth of ships. It's huge. However, in 2000, exhibits positioned in
prime spots near the main entrance were focused on US embarkation
ports and Caribbean ports of call; for 2008, international ports
were more prominent. Just to the right of the main entrance were
exhibitors representing Dubai and the UK; to the left were Sweden, a
variety of European ports, and areas devoted to China, Korea, Japan,
and Taiwan.
For the future, look for growth in all sectors of
the cruise industry and all regions of the world. And look to the
Far East as the next Big Thing in cruise travel.
Photo Courtesy of
Seatrade
