“Companies are using Big Data to source demographic and buying pattern information on passengers and then using it to dictate how they market their products to them.”
Report objectives and structure
This report provides an overview of current developments in the global cruise sector and identifies key trends that will influence its future. It covers both the established source markets where growth has started to stall and also the emerging markets where progress has not been as rapid as originally forecast. It also addresses the way the industry is using its own beneficial impact on the economies of the regions in – and to, which it operates to gain the fiscal support to develop the required infrastructure and also to deflect the rising tide of criticism from environmental and other lobby groups to the whole concept of cruise tourism. The report highlights the challenges facing cruise companies, with rising fuel and other operational costs and consumer markets unwilling to pay higher prices for cruise or any other holiday choices. There is also a detailed breakdown of the innovations being introduced by individual cruise brands seeking to differentiate themselves in an increasingly crowded but discerning marketplace.
Key findings
The key finding of this report is the way the sustained pressure on the sector’s profitability since 2008 has prompted a root-and-branch overhaul of the management structure of the major companies, and a redefining of what should be the most important decision-making drivers.
While the industry remains capacity-driven and still on target to grow from 21 million to 30 million annual global cruise passengers over the next ten years, this new, more analytics-based management approach has ushered in a more conservative ordering policy, which has already seen a decline in the number of new ships delivered, from an average of 12 to just eight a year. This should, in turn, help reduce the downward pressure on ticket prices.
On the cost side, the industry has scored what appears to be a major victory in persuading US authorities to allow alternative compliance to new emissions regulations. This will reduce what stood to be game-changing levels of higher fuel costs. It will also, though, create an even wider gap between the costs faced by brands operating older, smaller ships compared with those for the larger companies with newer, larger and more fuel-efficient ships.
The spectre of higher fuel costs has already impacted the sector, with a new product niche for brands operating so-called destination-immersive cruises with overnight (or longer) stays in ports and shorter, slower sailing in between them.
On-board revenue is becoming ever more important to the bottom line in an environment where consumers have been educated since 2008 to wait for last-minute discounting before booking their cruises. This is one factor behind Carnival Cruise Lines’ decision to introduce pay-extra in-concert entertainment – a concept now under serious consideration by rival brands.
This report also looks at the following areas:
How will cruise companies respond to shareholder demand for improved return on investment?
Exactly what impact will new emissions regulations now have on fuel costs and deployment decisions?
Will management restructuring make the major companies more profitable?
Is the newfound support for the travel trade just a temporary fix for cruise companies?
Has the cruise demand potential from China and the rest of Asia been overstated?
Will the power of social media prove to be positive or negative for the future of cruising?
