cruise


Sector rebounds strongly but emissions challenge looms


THE CRUISE industry recovered strongly in 2023, with cruise association Clia asserting the sector “continues to be one of the fastest-growing” in tourism. Ocean cruise passengers were


forecast to overtake 2019 levels. But with capacity growing, Clia noted the sector would need to attract four million new-to-cruise passengers by 2025. Cruise groups reported results in line


with the recovery. Carnival posted record fourth-quarter and full-year revenues GHVSLWH DQ DQQXDO ORVV RI


bPLOOLRQ and reduced its debt by $4.6 billion to FIGURE 68: CONSUMER INTEREST IN CRUISE


UK consumer interest in taking a cruise (all adults)


Don’t know


14% 13% +15pt 36%


net % would take a cruise


Would not Source: YouGov, November 2023 Base: 4,065 UK adults The Deloitte view


The cruise industry experienced a return to some level of normality in 2023. While occupancy levels did not quite reach the pre- pandemic levels of 2019, prices were strong, making it a successful year for the industry. The US market was particularly buoyant,


benefiting those operators for which it is a key market. However, the UK and Europe lagged the US. The Far East was the slowest to pick up due to the lengthier restrictions in place. Early signs for 2024 are positive, with


volumes expected to exceed the same period last year. Some cruise lines have forecast occupancy rates in the first half of 2024 will be higher despite the increased capacity. However, pricing seems to be more challenging and we may witness some price softening, driven by increased capacity and competition.


Against the backdrop of economic


uncertainty and continued cost-of-living crisis, consumers still face pressures on their ability to spend in discretionary categories. However, consumer surveys including the Deloitte Consumer Tracker indicate consumers tend to prioritise leisure travel over other forms of discretionary spending. Cruises remain a good value-for-money option compared to land-based holidays, especially given the recent increases in average daily rates across the hotel sector. Sub-sectors such as expedition, luxury


and river cruising remain popular as consumers strive for new experiences, and all-inclusive packages help control budgets. New ship deliveries continue to create capacity despite fleet retirements. In the


decade leading up to the pandemic, demand typically exceeded supply, limiting growth to how quickly new ships could be built. With supply now exceeding demand over the next couple of years, this may create a more competitive environment, but is also likely to prompt a renewed emphasis on attracting new cruise guests away from traditional land-based alternatives. A lot of new ships use cleaner energy,


including shore power and liquefied natural gas (LNG), which is a positive step towards reducing their environmental impact. The cruise sector still faces challenges in reducing its emissions, so industry leaders must focus


on this issue for the foreseeable future. Q Alistair J Pritchard, lead partner, Travel and Aviation


51% Would %


10 20 30 40 50 60


0 18-24 25-49 50-64 +34pt 58%


54% +23pt


Desire to take a cruise, by age


Net % would take a cruise (right axis)


48% +8pt +1pt 65+ 46%


10 15 20 25 30 35


0 5


Cruise lines reported consistently outperforming forecasts throughout last year


just over $30 billion. Chief executive Josh Weinstein noted: “We consistently outperformed in all four quarters.” Royal Caribbean Group reported a


$1.4 billion profit for the nine months to September and “accelerating demand for 2024”, with president and chief executive Jason Liberty earlier reporting “a step change in booking volumes and pricing”. Norwegian Cruise Line Holdings similarly reported record revenue and bookings. UK cruise demand proved equally


robust, although 2023 data was not available in time for this report. Demand in 2022 switched somewhat towards European sailings, rising from 67% of all passengers in 2019 to almost 79%. This came largely at the expense of the Caribbean, to which the proportion of UK passengers fell by one-third on 2019. The UK average duration remained


close to 10 days against a global average of seven, and the average passenger age fell slightly to just below 56 – 10 years above the global average. Clia noted member cruise lines’ fleets


would exceed 300 ships for the first time in 2024, with capacity set to grow 19% to more than 746,000 berths by 2028. That raises the pressure for emissions reduction at sea and in ports. Clia reported


52 Travel Weekly Insight Report 2024


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