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CLIA: Luxury, River Cruises Show Strong Growth

August 10, 2010 By: George Dooley

Two different segments of cruising turn out to have much in common, and both are on a strong growth curve, according to the results of extensive surveys of travel agent and cruise line members of Cruise Lines International Association (CLIA). CLIA member cruise lines specializing in luxury and river cruises say they plan to expand offerings in order to meet rising demand, and attract more customers by focusing on what they want most: new experiences and exotic destinations around the world.

The growth is partially aided by changing demographics of passengers. While the primary market for luxury and river cruises is, and will continue to be, the experienced traveler, the lines report increased numbers of younger guests— in one case a drop in the median passenger age from 60 to 45 in the last 10 years. Among the reasons, according to CLIA members, are the increasing popularity of multi-generational and family cruises and marketing aimed at more active, "participative" travelers by both luxury and river cruise lines.

The ongoing introduction of new ships will continue to heighten interest and excitement in luxury and river cruising. Between 2010 and 2011, 11 new vessels will enter these fleets, with likely more on order in the years to come. But CLIA member lines say that destination reigns almost supreme as the key to filling ships in these market segments. Outstanding service and amenity levels are major motivators in the luxury category, but what really excites buyers in both categories is the destination— itineraries featuring new places to discover.

Currently the hottest destination in both categories is Europe and the Mediterranean, followed by new itineraries in the Baltic, Russia and Central Europe, South America, the Middle East and Holy Land, and, in particular, Asia. New exotic, off-the-beaten-path ports in the Caribbean, Europe and such countries as Indonesia, Cambodia, Japan, and India are also fueling interest.

The Agent Surveys

In July, CLIA surveyed its travel agent members to determine consumer attitudes and trends in the luxury and river cruise markets. The findings not only confirmed the observations of cruise lines operating in these segments but offered some additional information of interest to cruise customers, the lines and the agents themselves.

Among the highlights:

*    Travel agents agree that demand for luxury and river cruises is growing. Of those responding to the surveys, 36.5 percent report increasing demand for river cruises (34 percent say the demand is unchanged) while 64 percent indicate increased awareness for river cruising among their clients. Almost a quarter of agents, 22.2 percent, report a move toward luxury, with more contemporary/premium clients moving up.
Travel agents agree that destination is a top motivator: 86.9 percent rank destination and itinerary at the top of the list for river cruisers, followed by authentic experiences in small towns and destinations; incorporated land programs and sightseeing; shipboard service and lifestyle, the all-inclusivity of the product and perceived value. For luxury cruisers, shipboard service and lifestyle and destination (78.3 percent and 58.3 percent respectively) are the prime motivators.
*    Among popular destinations, agents agree that Europe currently stands alone. Of those responding, 97.8 percent of river cruise sellers rank Europe at the top, followed by China, Russia. Europe and the Mediterranean. World cruises, Europe, the South Pacific and Asia rank highest in interest among a long list of choices for luxury cruisers.
*    Agents identify couples and affinity or social groups as growing markets for both river and luxury cruising (with the "retired/senior" maintaining the number one position).
*    Why do clients choose to cruise over other types of vacations? In order of importance, according to agents surveyed, river cruise customers choose: authentic experiences in smaller towns and villages, smaller ships and intimate ambience, travel to multiple destinations, convenience, product inclusivity, shore excursions and value. Luxury cruisers cite quality of service, cuisine, smaller ships, value, destinations, and inclusivity.
*    In the survey, luxury cruises stacked up positively against the best restaurants in the world (75 percent similar to much better); the best hospitality service standards (94 percent); the most luxurious accommodations (75 percent); the most upscale spas (86 percent); and the most exciting cultural/enrichment/entertainment activities available (86 percent).

Trends in Luxury and River Cruising

These are some of the trends observed by CLIA's member travel agents:

*    New ships for the river market are more upscale, with larger accommodations • River cruisers are seeking new experiences, demanding greater value, have higher expectations of quality at an affordable price.
*    Agents see more promotions and greater competition among river cruise lines, with more emphasis on pricing and providing additional value.
*    Pre- and post-cruise programs are especially popular with the majority of river cruisers, with over 70 percent most likely to add a land stay on to their river voyage.
*    The most popular length of luxury and river cruises is eight to 14 days, followed by seven-day cruises.
*    Luxury cruisers also are demanding greater value and are more price sensitive, with higher expectations for quality of service.
*    Consumer incentives and promotions have made luxury cruising more affordable.
*    Whatever their affluence status, both luxury cruisers and river cruise enthusiasts respond to "deals": 85.7 percent of agents say river cruise clients are somewhat or much more apt to make a purchase with a special offer; 79.6 percent say luxury clients are similarly motivated.

It should be noted also that one of the major trends in the cruise industry has been the introduction of luxury on contemporary and upmarket brands in the form of exclusive suite accommodations, luxury spas, "yacht clubs" and more. The result is far greater choice in cruise ships, itineraries and shipboard experiences for those travelers seeking true luxury.

For Agents Only

The CLIA agent survey also revealed some findings of particular relevance to the agent community. There are significant opportunities for agents to sell river and luxury cruises, given the strong consumer interest and demand:

*    Currently, only 17.5 percent of agents sell river cruises with regularity (64.4 percent have done so occasionally). Typically agents report river cruise sales account for 10 percent or less of total cruise sales.
*    Only 15 percent of agents say luxury cruises are their primary sales and 30 percent have yet to make a luxury cruise sale (71.2 percent have sold at least one). Luxury accounts for 10 percent of sales or less for 72.6 percent of agents.
*    Agents would be well-advised to look for river cruise clients among the broader community of cruise enthusiasts; 68.6 percent of agents say their river cruise customers have and continue to take cruises on larger ships as well.
*    Booking patterns for both luxury and river cruises are lengthening: 48.9 percent of agents report river cruise customers booking farther out (an average of 7.68 months); 41.3 percent say more clients are booking luxury cruises farther out (average 6.84 months)
*    What marketing techniques sell luxury and river cruising? For river cruises: word of mouth, personal relationships, networking and direct mail; for luxury cruises: personal relationships, word of mouth and networking.


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