The cruise industry will reach 315 ships this year, generating an estimated $35.5 billion in ticket and onboard revenue worldwide, up from $33.2 billion last year according to the 2016-2017 Cruise Industry News Annual Report.
The North American market will represent approximately 56 percent of the global industry in terms of passenger sourcing and revenue; Europe 27 percent, and the Asia/Pacific region 17 percent.
Year-over-year, the market shares for North America and Europe have contracted from 59 and 29 percent respectively in 2015, while the Asia/Pacific region has grown from 12 to 17 percent.
The global passenger capacity is estimated at 23.6 million this year, up from 22 million last year.
About the Annual Report:
The Cruise Industry News Annual Report is the only book of its kind, presenting the worldwide cruise industry through 2025 in 350+ pages. Statistics are independently researched. Learn more by clicking here.
The report covers everything from new ships on order to supply-and-demand scenarios from 1987 through 2021+. Plus there is a future outlook, complete growth projections for each cruise line, regional market reports, and detailed ship deployment by region and market, covering all the cruise lines. New for 2016-2017 based on customer feedback are detailed Chinese market statistics and projections.
Viking Ocean Cruises is a little more than two months away from accepting its second ship, the Viking Sea, an event that will multiply the fledgling line’s ability to offer varied itineraries.
Already Viking has said that its first ship, the Viking Star, will reposition to North America starting in September.
After a transition cruise that follows the route of the Viking explorers from Norway to the New World, the Viking Star will offer some fall cruises in Canada and a trip down the eastern seaboard before making its home for the winter of 2016-17 in Puerto Rico.
Richard Marnell, senior vice president of marketing for Viking River Cruises, said the company intends to hold the line on pricing.
“It is our intent to maintain the value at what it is today and essentially to fill the ships as quickly as we can build them,” he said.
Marnell said the company, which is new to the ocean side of cruising, had some kinks to work out in its first few months, but its debut received positive feedback from media and customers.
He said a rating of 5 from the editors of the Cruise Critic website and a “Loved It” endorsement from 86% of the site’s readers were especially exciting. Internally, the line’s surveys are “very, very good and encouraging,” Marnell said.
“What people are applauding is the understated elegance, the residential feel, the great bathrooms, king-size beds, the housekeeping,” he said. “Food is a surprise, and people are quite pleased with our food.”
One of the kinks had to do with an electrical transformer problem that led to the early termination of a cruise in Estonia. Another involved sudden breakage of glass shower partitions in the bathrooms.
Marnell said both problems have been fixed, and Viking might be making a design modification on future ships to ensure that the glass breakage doesn’t reoccur but added that “from a safety perspective and a utility perspective it’s fine.”
There was also an IT problem that torpedoed the television system on early cruises; that, too, has been resolved.
In addition, he said, Viking has learned from experience that some things aren’t working as expected. A singular reception area on the Star has been split into separate shore excursion and guest services desks. The gangways have been modified because the ship is too small for most air bridges, which are designed for bigger vessels, Marnell said.
By bringing the Viking Star to North America, Viking hopes to give more people a chance to see the ship. On its transition cruise from Canada to Puerto Rico, it will be making stops in Boston, New York and Florida.
Those stops, Marnell said, “will give the opportunity for those who weren’t able to attend other functions — and this is particularly important to agents — to be able to see the vessel and experience it.”
For the winter months, the Viking Star will do a series of nine 11-night roundtrips from San Juan, visiting Tortola, British Virgin Islands; Antigua; St. Lucia; Barbados; St. Kitts; Guadeloupe; St. Maarten; and St. Thomas.
Marnell said that homeporting in San Juan saves time that would otherwise be taken up sailing from South Florida for more port time in the Caribbean, a key brand promise.
Also, Viking’s overall value continues to get high marks in customer surveys, according to Marnell, and that remains a key point of differentiation.
“So we feel like we’re in a very good position, and it’s our intention to maintain that moving forward,” he said.
Cruising in the coastal waters of North America is starting to gain attention as more companies enter the market and introduce new ships to the long overlooked niche.
Small, domestic ships are plying the bays, sounds and islands in New England, Chesapeake Bay, Puget Sound and the Canadian Maritimes and docking in fresh, less-visited ports of call.
Coastal ships appeal to an older, well-traveled group of passengers seeking a small-ship experience that doesn’t require distant travel and affords easy access to places they haven’t yet seen.
New entrants, such as Haimark Line and Pearl Seas Cruises, are bringing different and larger vessels to the market. And new destinations are cropping up, particularly Cuba, which coastal cruise firms say is ideally suited to their scale and style of cruising.
“It’s definitely growing,” said Debbi Robertson, a AAA agent in Lake Oswego, Ore. “The appeal, obviously, is the fact that it’s a smaller ship, it’s a small footprint with a few passengers, and you can get into nooks and crannies that you can’t otherwise. It’s a much more relaxed and easy way to go.”
Coastal cruising is similar to river cruising, except it’s done in saltwater rather than fresh. The ships top out at a little more than 200 passengers, cabins are intimate, getting on and off the ships is a breeze and destination is key.
Price-wise, coastal cruises are also closer to many river ships, charging in the $3,000 to $5,000 range for a seven- to 10-night cruise.
Each coastal company has a slightly different product lineup, with some mixing river, ocean and lake cruising depending on the time of year.
And an important distinction for most coastal cruisers is that their ships are predominantly U.S. flagged, which allows for itineraries that go between U.S. ports without a foreign stop.
“That’s part of our whole strategy, our boats being U.S.-owned,” said Tim Jacox, president of Seattle-based Un-Cruise Adventures. “In Hawaii with [the ship] Safari Explorer we’re able to operate island to island to island. In Alaska, the fact that we’re able to operate right in the heart of the Inside Passage, Juneau to Ketchikan, there’s no wasted time whatsoever.”
In a sense, coastal cruising is an offshoot of the U.S. shipbuilding industry. The two oldest players, American Cruise Lines and Blount Small Ship Adventures, both own shipyards: Maryland-based Chesapeake Shipbuilding and Rhode Island-based Blount Boats, respectively. That stands in contrast to much of the ocean cruise fleet, which is built overseas, mainly in Europe.
The ships are different, too. Rather than stress luxury, coastal ships tend to have simpler, more functional decor. Several are built as modern replicas of vintage coastal steamers.
The coastal ships tend to have a lounge, a bar and a restaurant that can accommodate a single seating, along with open space on a top deck for sightseeing. Most cabins range from 150 to 200 square feet.
“They’re not large cabins,” said Thomas Markwell, managing partner of sales and marketing at Haimark Line. “They’re comfortable, but they’re not suites.”
On some ships, access to cabins is from an open deck rather than an interior corridor.
Typically, coastal ships have a shallow draft, which enables ships to access close-in harbors and dock rather than tender in most ports.
Blount Small Ship Adventures has engineered two further advantages: a bow ramp that permits a ship to practically dock on the beach in the Caribbean and a retractable pilot house to pass under low bridges.
Because of that feature, Blount can sail the Erie Canal, along which some bridge clearances are under 22 feet. Nancy Blount, company president, said it is the only overnight cruise ship on the canal.
People who gravitate toward coastal cruising are a distinct breed, according to cruise line executives.
“These people are intrepid travelers,” Markwell said. “They have been everywhere, but at the same time they have been no place close; they have no exposure or limited exposure to destinations of interest in North America.”
Most of them are between the ages of 55 and 75, with some in their 80s, he said. Most don’t want to be on a motor coach tour.
“They’ve taken their love of cruising and looked for an application of that concept in North America,” Markwell said. “They say, ‘We cannot physically do long coach rides anymore,’ and beyond that, especially for this aged demographic, the concept of packing and unpacking is not appealing at all anymore.”
Many have exhausted their “bucket list” destinations in exotic places that they waited their whole lives to see. Now, Markwell said, they’re on a second bucket list.
“Their interest doesn’t die,” he said. “It doesn’t wane as they get older. With that in mind, they sort of develop a new list. And that new list seems to be closer to home.”
Where they’re going on coastal voyages are places like the tiny towns on Maryland’s eastern shore; the historical districts of Quebec City or Beaufort, S.C.; or the peaks and evergreens surrounding the San Juan Islands in Washington state’s Puget Sound.
A classic coastal itinerary is a 15-day voyage offered by American Cruise Lines that sails from Baltimore down through the Chesapeake Bay and along the Intracoastal Waterway to Jacksonville, Fla.
Along the way, passengers visit Kitty Hawk, N.C., site of the Wright brothers’ first flight; Charleston, S.C., with its side-yard colonial houses; and the turn-of-the-century robber baron retreat of Jekyll Island, Ga.
Fares for the cruise, offered in late spring and fall, start at $7,725 and range up to $13,290 for the owner’s suite on one of three American ships: the American Glory, American Star or Independence. All the ships have three decks of accommodations and carry fewer than 100 passengers.
“The small nature of it, it becomes a family on board,” said Judy Roman, vice president of marketing for American and its affiliate, Pearl Seas. “It’s quite an intimate experience, as opposed to typical cruising.”
Passengers form a naturally close bond on such small ships, both with each other and with the crew, coastal cruise executives said. And the crew on U.S.-flagged ships is predominantly American, so there are no language barriers, they said.
Small coastal lines do face competition from bigger, foreign-flagged ships that offer coastal itineraries of their own.
Holland America Line has summer cruises on the Veendam along the St. Lawrence River, the Canadian Maritimes and in New England, while multiple cruise lines have coastal Pacific trips, including Princess Cruises, Norwegian Cruise Line, Celebrity Cruises and Royal Caribbean International.
The West Coast itineraries include California ports of call such as Santa Barbara, Monterey, Catalina Island and San Diego. Because the ships are foreign-flagged, they all include a stop either in Canada or Mexico in order to comply with cabotage laws.
With a draft of 25 feet, a larger ship such as the Veendam is more stable on the open ocean but less nimble in reaching small ports than coastal ships that need only six or seven feet of water.
“What we’re trying to emphasize is the navigability of the vessel, because she can get to where larger ships cannot operate,” Markwell said. As an example, he pointed to the Great Lakes, where the Welland Canal between lakes Erie and Ontario limits the size of vessels to 740 feet.
Jacox, of Un-Cruise Adventures, said some of the value in a coastal cruise comes from hugging the coast.
“I think you have part of the population that wants both the security of coastal cruising — they know they’re not going to be out on the open oceans — and also that they’ll have a great vantage point. They’re going to see scenery pretty much all the time.”
At Un-Cruise, many of the shoreline excursions also have an outdoorsy adventure component, including wildlife watching, hiking, kayaking and paddle boarding, which can be done best on small ships, Jacox said.
Coastal lines tend to put a lot of thought into shore excursions to take advantage of their small-group dynamics.
“You bring 5,000 people into Quebec City, and you feel that. You bring 200 people in, and it just feels comfortable. It’s really easy to deliver unique experiences,” Markwell said.
One example is a visit to a “sugar shack” in Quebec, where maple sap is turned into syrup and candies in a small barn out in the countryside.
Most coastal cruises offer at least one complimentary excursion in each port, plus several optional ones.
Enrichment is another pillar of coastal cruising, and ships typically have a lecturer onboard who is an expert in the history, natural environment or other aspects of the destinations that the cruise visits.
Each line includes alcohol in some fashion. American Cruise Lines offers wine and beer with dinner, plus a cocktail hour. At Un-Cruise, six of nine ships include premium spirits, fine wine and microbrews in the fare.
On a Blount cruise, wine and beer are served with lunch and dinner, plus guests can bring and store their own liquor at the ship’s bar, an opportunity that “our passengers love,” Blount said.
In keeping with its relaxed nature, coastal cruising’s fleet is expanding at a casual pace. The newest entrant, Haimark Line, started sailing in April using the former Cape May Light, a 210-passenger ship built in 2001 for the now-defunct American Classic Voyages.
The only recent newbuild is the Pearl Mist, the sole ship sailing for Pearl Seas Cruises. It features relatively large cabins with individual balconies, a stabilizer, four decks of cabins rather than three and six lounges.
Pearl Seas is the latest line to announce cruises from South Florida to Cuba, which it plans to begin in April.
Cuba solves one of the challenges for coastal U.S. cruisers: where to go in the winter when most of the U.S. is too cold to be an attractive cruise destination. Several lines had focused on cruises in Central America, especially Costa Rica and Panama, where they faced little competition. But with the recent diplomatic opening in Cuba, they’re re-evaluating.
Markwell said an attractive program in the winter is a key to profits.
“It’s important that the ships sail full all year round,” he said. “We cannot make money in the summertime in the Great Lakes to lose it in the winter.”
Haimark also plans cruises from Miami to Cuba starting in February, in cooperation with United Caribbean Lines, which already has Treasury Department approval for ferry service between Florida and Cuba.
Blount, too, has Cuba in its sights, though probably not until 2017. Nancy Blount said that as a U.S.-flagged vessel, there are additional complications to getting Commerce Department approvals.
Jacox said that Un-Cruise Adventures will continue to operate on the West Coast of North and Central America, where it sails one ship in Mexico’s Sea of Cortez from November to March and another in Costa Rica and Panama.
While it shares some similarities with river cruising, U.S. coastal cruising is small even by river cruise standards. The segment in its entirety is only a couple of thousand berths.
“Because there’s very limited capacity, every time we see an opportunity, we grab it,” said Joann Bell, vice president of programming for Road Scholar, a tour operator with an educational focus.
Road Scholar has chartered Haimark’s St. Laurent for two of its four cruises in August in the Great Lakes.
“They have similar philosophies, so they have their own educational content onboard, which just enhances what our product type is,” Bell said.
Road Scholar already sends groups to Cuba on people-to-people trips, so there is synergy in that market, as well. Other operators with a similar focus, such as Smithsonian Journeys, have also placed groups on Haimark and American Cruise Lines.
Because of their small size, coastal cruise ships attract an active charter clientele. Markwell said a third of Haimark’s 15 cruises on the St. Laurent for the balance of the year are charters.
Haimark, which also has river cruises in Europe and Asia, cross-sells U.S. coastal cruises to groups taking those trips.
Markwell said Japan, Australia and France are among the countries that have provided passenger groups for Haimark.
“Because we have grown so quickly and we need that volume, it is important for us to get into those other markets,” he said.