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State of the Cruise Industry (VIDEO)January 17, 2014 By: Ruthanne Terrero
CLIA (Cruise Lines International Association) executives were in New York for their annual media showcase, where their member cruise lines tout their offerings to the press. Prior to one-on-one meetings that took place with member cruise lines, Christine Duffy, president and CEO of CLIA, gave journalists an update on the state of the cruise industry. Here’s what she told us.
It’s been a full year since the cruise association opened its doors to grow its cruise line membership base from one that is solely North American based to one that is an international entity, membership has been growing. Under the new global CLIA, member cruise lines have gone from 26 to 63, representing 95 percent of the global cruise capacity.
“We’re pretty excited to now have a much broader variety of cruise lines that participate in CLIA associations around the world,” said Duffy, adding that a CLIA Italy chapter office would soon be opening.
CLIA’s global travel agency community has been expanding as well; it’s now comprised of 13,500 travel agency members who reach over 50,000 travel agents around the world.
“Part of our strategy in 2014 is to grow that channel of travel agents and agency members, particularly in markets outside of the U.S.,” said Duffy. The number of executive partners has grown to 250; those are the port authorities, destinations and maritime and industry suppliers, that are part of the supply chain for cruise lines.
CLIA and Travel Agents
Travel agents remain the most important distribution channel for CLIA and the cruise industry, said Duffy. “As we continue to see the cruise industry grow, with more ships, more destinations and unique itineraries, it is more important than ever that we encourage consumers to use a CLIA-certified travel counselor who really has invested in lots of training and education to know how to find the right cruise for what that consumer is looking for in their vacation experience.”
CLIA has redesigned much of its training and certification process and will more heavily promote CLIA-certified certification to consumers. At its annual Cruise3Sixty conference April 2-6, CLIA will have 10 brand new courses and 25 ship inspections, she said.
What’s Ahead for New Vessels
In 2014, 16 new ships will be introduced by CLIA cruise line members, adding 20,000 beds of capacity; eight of those vessels are river cruise ships, considered to be the fastest growing segment of the cruise industry.
“If you look at the new ships introduced between 2013 and 2014, that brings us to 29 new ships with more than 34,000 beds in fleet, and you can see for 2014 that means 410 total ships in the CLIA fleet, representing 95 percent of the global cruise capacity. If we project out, at least for what's on the books today, over the next three years we'll see another 20 new ships added, which will bring more than 52,000 new beds into capacity for the industry,” said Duffy.
Duffy and Jim Berra, chair of CLIA's marketing committee, talk how cruise lines are tackling safety in 2014.
CLIA’s forecast indicates that 21.7 million people will take a cruise this year, up an estimated 400,000 from 2013. North America represents just a little over 55 percent of that number, significant, but not as large as it once was. Europe as a source market is now just over 30 percent, and rest of the world is nearly 15 percent.
“In Europe, the U.K. and Ireland are still holding at the number-two spot, but Germany is really projected in the future to take over as the second-largest source market for the cruise industry in the future, which is part of why we created a CLIA Germany chapter in 2013,” said Duffy.
The Australasia source market is up more than 130 percent over the past five years. “While it's still a small percentage in terms of the total number of passengers, it has seen rapid growth,” she said.
Brazil is a growing cruise market and those customers will gladly even fly up to Miami to sail. “We'll continue to encourage them to do that. This, I think, shows really the global nature of the industry and the potential for future growth, not only in North America, but around the world,” said Duffy.
All told, the global cruise industry has a $100 billion dollar economic impact on the world stage, contributing $33 billion in global wages and 775,000 jobs, reported Duffy. In the United States alone, 356,000 jobs come from the cruise industry.
In 2014, the Caribbean sailings will pick up a bit from where they were in 2013 and continues to lead in terms of deployment and capacity at 37.3 percent of all sailings. The amount of ships sailing from the Mediterranean is down a bit, which Duffy said is likely “due to the economics in the region and also the opportunity in some of these newer markets, particularly in Asia where we're seeing some new ships being deployed and even home-ported for parted of the year,” she noted. “Europe without the Med is actually a little bit stronger than what it was in 2013.”
Some ships have been taken out of South America, so deployments are a bit down there as well for this year.
Duffy pointed to several cruise lines that are providing unique land opportunities to clients. Azamara is continuing with its “Aza-mazing Evenings,” which keeps its ships in port overnight so guests can experience local nightlife through shore excursions.
Costa Cruises has longer stop-overs in each of its ports, also often staying overnight and into the next day to give people more time in the destination. Costa will kick-off its 62-day Grand African Tour that will sail from Dubai in February, said Duffy.
Crystal Cruises has a five-night trip in Uganda that tracks rare mountain gorillas through the forests. Guests sailing on the March 10 itinerary from Singapore to Cape Town will visit Siam Reap and Bangkok, and take a three-day trip to Angkor Wat. Two of Crystal’s April Asia cruises that visit Beijing will include a five-night land itinerary to Tibet. Guests will also get the opportunity to cuddle baby pandas at a Giant Panda research center.
Holland America has a 14-day Indonesian Discovery voyage on the Rotterdam or on the Volendam that goes to Komodo Island, overnights in Bali, visits Jakarta, Semarang and Lembar.
MSC Divina has decided to home-port in Miami, and will be visiting Cartagena, Colombia; Cristobal, Panama; Puerto Limon, Costa Rica and Costa Maya, Mexico.
Windstar has expands its fleet this year and will be going to new destinations in Southeast Asia and Arabia; that’s in addition to the 50 countries that they already sail to.
“These are not your typical itineraries,” said Duffy. “The industry has a lot to offer repeat cruisers and first-time cruisers looking for adventure a great way to visit exotic destinations. The message to consumers is there really is a cruise itinerary out there for everyone, just as there is a cruise ship and experience for everyone no matter what the demographic.”
Targeting the Corporate Event and Incentive Market
The cruise industry can grow by attracting the corporate events and incentive market, which is a new focus for CLIA but not for Duffy, who spent years as CEO at Maritz Travel.
“When I stepped into this [CLIA] role I saw there are clearly many meeting planners and meeting professionals who have no idea what the cruise industry represents today. We are making a more concerted effort to let educate them,” Duffy said.
A group of cruise lines are engaged with CLIA on its “Corporate Event and Incentive Task Force” and the association also had several cruise line representatives at PCMA (Professional Convention Management Association) this week in Boston to present to a group of high-level planners representing Fortune-100 corporations who indicated they are interested in learning more about the cruise industry and what the cruise industry can offer to them for their corporate event and incentive programs.
“One of the benefits, clearly, for the cruise lines are full-ship charters,” said Duffy.
Research shows that many who attend a meeting at sea are first-time cruisers, which is also one of CLIA’s goals, to get people on ships who have never sailed before.
“Corporate events and incentives is a great way to do it, because somebody else is paying the bill, and they get to experience a cruise for the first time. “We know that many, many of those people then will book a cruise for their personal and family vacations,” she added. “This is something else that CLIA will continue to invest in and work on as we move into 2014.”
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