Royal Caribbean boss moves to dispel UK cruise concerns

Independence of the Seas in Southampton photo by Dave Jones.

Royal Caribbean Cruises’ boss has moved to dispel concerns that the UK cruise industry faces a bleak future amid ongoing Brexit uncertainty.

Royal Caribbean International last week cancelled Independence of the Seas’ 2020 UK season and announced the ship would operate out of Florida instead to meet the demand for Perfect Day in CocoCay, the line’s new private island in the Bahamas.

The decision left some agents to question whether a soft UK market due to Brexit had prompted the decision – rather than a soaring interest in the $250 million private island which will be served by 11 Royal ships this year.

Speaking on Celebrity Edge’s maiden ex-UK sailing from Southampton on Monday, Richard Fain, Royal Caribbean Cruises’ chairman and chief executive, said: “We are here for the long term, we are not here for the current climate.

“There is no doubt that the UK market will do very well in the long-term and it continues to be our second largest market. We have been here when it has gone through cycles. The cruise industry is not fickle – it is solid and consistent.”

Fain admitted there was “a modicum of uncertainty” in the UK market as confusion continued over when Britain would leave the EU.

But he added that Royal Caribbean International had to move more capacity to North America due to “an extraordinary surge in interest” in Perfect Day, which launched just over a week ago.

“This is a wonderful problem to have,” he said, adding: “That we don’t have enough ships to satisfy the [customer] demand.”

Plans to expand the existing Perfect Day site were being looked at, said Fain. Only a third of the island is currently being used by Royal Caribbean to accommodate passengers.

Fain also added: “We look at the UK market as more than just ships sailing out of the UK. One of the reasons why the UK market has been so attractive to us is Brits are amazing travellers.”

Sailings in the eastern Mediterranean represented “a great opportunity” for Britons looking for fly-cruise options away from the UK, Fain said.

Advertisements

UK Market Moves Toward All-Inclusive Cruises

Marella’s fleet will be all-inclusive come 2019.

The UK’s cruise market is going from strength-to-strength with bargain-hungry Brits boosting the all-inclusive package concept.

Phil Evans, the founder and owner of Cruise Nation, said there is also a trend in the overall marketplace for long-haul products, which are “massively up over last year”. 

Evans told Cruise Industry News: “Consumers want great value for money, and while free drinks packages represent the best value in most cases, customers who do not drink are often left at a disadvantage, therefore it is important to give customers choices.”

Online agency Iglu’s commercial product director, Dave Mills, is upbeat about the fortunes for the UK  market and explained that the market has moved away from a purely price-driven sector with cruise lines now increasingly offering a more all-inclusive product and having a lot more to do onboard which is, more often than not, included in the price.

All-Inclusive

“These all-inclusive packages are so popular right now. The more you have included and the more time you have to explain the experiences, the more interest we see,” Mills said. “Outside the cruising market, all-inclusive holidays are very popular and the cruise market looks like it’s joining this sector in some way.”

He added that the cruise lines have committed to offering ever better value in recent years and packages are effectively close to the final holiday costs outside the sector with guests not having to spend much once they are onboard.

The UK market is looking strong for the future, led by Carnival Corporation’s P&O Cruises UK. The new P&O Iona will be based in Southampton starting in spring 2020.

All-inclusive packages can include shore excursions and, even if they are not included, Mills said that cruise lines are working hard to offer immersive, once-in-a-lifetime experiences, which can still be very good value for money.

Like Cruise Nation, Iglu is also seeing distinct trends appearing in the UK’s cruise market.

“There are some broader trends and we are seeing huge growth in the area of expedition cruises, where people are generally going on smaller ships but heading off the beaten track to destinations such as the Galapagos and Antarctica,” Mills said. “Perhaps this is down to people seeing programs such as Blue Planet on TV and then want to see the locations for themselves.

Booking Window

Another trend appearing for travel agencies is for Brits to book their cruise holidays further ahead than in recent years.

Evans noted: “There has been a significant shift so far this year to winter 2018-2019 and summer 2019. This is mainly down to the many early booking offers available; in some cases, it is cheaper to book a 2019 cruise over a 2018 cruise.

“We have also seen our customers book further ahead than they were this time last year; our average booking window is now nine months in advance.

“Overall cruise prices are increasing. Cruise lines are rewarding customers for booking early with the best prices and incentives. Whereas two years ago, customers were waiting until the last minute knowing that prices would be reduced and they would get a better deal.”

Clia figures confirm global growth but UK decline

A previously-announced slump in UK cruise passengers last year has been re-confirmed in newly-published figures for the global industry.

The statistics for 2014 released by Clia show global demand for cruise holidays growing by 3.4% year-on-year to reach 22.04 million ocean cruise passengers.

But UK numbers dropped to 1.6 million from 1.7 million a year earlier, largely due to reduced cruise ship capacity away from UK ports and other popular destinations such as the Mediterranean

The cruise industry trade association was quick to point out that the UK will have returned to growth in a “landmark year” in 2015 thanks to the introduction of ships including P&O Cruises’ Britannia, Royal Caribbean International’s Anthem of the Seas, Princess Cruises’ Royal Princess and Cruise & Maritime Voyages’ Magellan.

“Longer-term trends demonstrate that the UK and Ireland market remains resilient; the annual average increase in passenger numbers since the start of the economic downturn in 2008 has been 3.3% and, over the past quarter century, there has been ten-fold growth,” a Clia spokesman said.

“The UK and Ireland continues to have one of Europe’s highest rates of market penetration for cruise holidays.”

The UK and Germany accounted for 15% of global cruise passengers or 3.38 million in 2014.

The Clia global figures issued from the US reveal total contributions from the cruise industry rose from $117 billion in 2013 to $119.9 billion last year.

This includes supporting 939,232 full-time equivalent employees earning $39.3 billion in income. Direct expenditures generated by cruise lines, passengers and crew totalled $55.8 billion.

North America remains the largest source market, accounting for 55% or 12.2 million cruise passengers in 2014, followed by Europe which claimed 29% or 6.4 million passengers.

Other regions of the world, including Australia, China, Singapore, Japan and South America, accounted for the remaining 16% or 3.5 million passengers.

Cruise tourism in Asia is growing at double-digit rates, both in capacity and as a passenger source market, according to the study.

The number of ships deployed in the region between 2013 and 2015 grew at a 10% compound annual growth rate, and the volume of cruises and voyages within and through Asia increased 11%. Passenger capacity in Asia increased 20%, with Chinas being the main driver of growth.

Clia acting chief executive, Cindy D’Aoust, said: “The cruise industry is truly a global and dynamic one.

“We’ve enjoyed progressive growth over the last 30 years, driven initially by demand from North America, which expanded to Europe, Australia and now Asia. As a result, the cruise industry impacts the global economy generating jobs, income and business growth in all regions of the world.

“The potential for new cruise passenger growth is huge,” she added.

“Apart from North America and Europe, other regions of the world account for nearly 85% of the world’s population, yet represent only 16% of cruisers. That reflects a tremendous opportunity for the cruise industry.

“Asia is a prime example of the cruise industry’s growth opportunity. Our industry is bringing more cruise ship visits to Asia and the volume of cruise passengers sourced from Asia for cruise tourism worldwide nearly doubled since 2012.”