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Old April 17th, 2014, 12:34 PM
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Default VERY Interesting Article on the Cruise Industry

This is a very interesting (albeit long) article covering many facets of the cruise industry. It talks about whether the cruise industry will continue to grow at a steady pace and attract more new cruisers, or whether that growth will now slow down as it becomes more saturated. It discusses all the various negative aspects of the cruise industry and puts them in perspective (i.e. norovirus, crime, etc.). Definitely worth reading;

Why Royal Caribbean?s Newest Ship Represents A Critical Test For The Cruise Industry

Pete
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Old April 17th, 2014, 01:59 PM
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And you can see into the future, how?

I found it interesting that the question they are raising is not whether they will continue to grow, but will that growth continue at the pace it has seen over the last few years or will that growth slow down and not be as robust as it has been.

As we know, all the negative press the last couple of years has had an impact on sales. Many first-timers are leery about cruising due to all the negative things they hear. They have huge misconceptions about norovirus, ships sinking, crime onboard, etc, etc.

So the question becomes will new innovations in cruising help create more interest and therefore stimulate sales, or will cruising simply become more of a 'niche' vacation and start to level out in popularity. Every industry has it's ups and downs, and cruising is certainly no different.

And of course while we all anticipate a slower growth, we hope for a steady and healthy future. But all it would take is one big disaster to destroy that positive growth, so anything is possible.

Pete
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Old April 17th, 2014, 03:02 PM
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I have sailed on Royal Caribbean only. I have been on their small ships as well as the largest ship. I have no interest in Quantum or Anthem. The eye in the sky and bumper cars are no big deal. The restaurant with the painted chairs does not appeal to me. I want to eat and get out. So I am going to try Norwegian and see what they can provide. Good article.
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Old April 17th, 2014, 06:57 PM
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I can't wait to try the Quantum of the Seas! Their new and many varied dining options sound very exciting!!

Pete
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Old April 18th, 2014, 08:29 AM
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One interesting part of the article was in the ticket price vs. on board revenues. The author described the "myth" that most of the revenues come from on board spending and not ticket prices. He stated the fact that ticket revenues are over twice that of on board spending revenues.

What was not disclosed was the margins in ticket revenue and on board spending. On board spending, while not being the highest revenue producer, has a far greater margin than ticket revenue. The percentage of every dollar in on board revenue that hits the bottom line is far greater than ticket revenue.

In the fourteen years that I've been cruising and paying attention to the cruise industry it is a very different animal than it was in 2000. For the large cruise lines the ships are the destinations and the ports are secondary. The cruise lines have evolved to accommodate the demographics and attract a younger cruiser. As the article pointed out, the average age is lower than it has ever been.

I remember ten years ago when I thought the wave of newbuilds that was occurring at that time would over saturate the industry. I was wrong and even more, and larger ships, are coming out. There is also the large growth in the river cruise market with Viking, Avalon, Uniworld and other lines adding river ships at a phenomenal rate.

The popularity of the niche markets are also evident. River cruising, small ship, destination oriented cruises, and the fuzzy area between ultra-luxury and mass market (Azamara, Oceania) are increasing in size and popularity. This market is becoming more popular with traditional cruisers and destination travelers who want comfort and convenience without the "theme park/resort" atmosphere of the newer and larger ships.

The times they are a changing.

Take care,
Mike
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Old May 3rd, 2014, 11:15 AM
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Quote:
Originally Posted by Mike M View Post
One interesting part of the article was in the ticket price vs. on board revenues. The author described the "myth" that most of the revenues come from on board spending and not ticket prices. He stated the fact that ticket revenues are over twice that of on board spending revenues.

What was not disclosed was the margins in ticket revenue and on board spending. On board spending, while not being the highest revenue producer, has a far greater margin than ticket revenue. The percentage of every dollar in on board revenue that hits the bottom line is far greater than ticket revenue.

In the fourteen years that I've been cruising and paying attention to the cruise industry it is a very different animal than it was in 2000. For the large cruise lines the ships are the destinations and the ports are secondary. The cruise lines have evolved to accommodate the demographics and attract a younger cruiser. As the article pointed out, the average age is lower than it has ever been.

I remember ten years ago when I thought the wave of newbuilds that was occurring at that time would over saturate the industry. I was wrong and even more, and larger ships, are coming out. There is also the large growth in the river cruise market with Viking, Avalon, Uniworld and other lines adding river ships at a phenomenal rate.

The popularity of the niche markets are also evident. River cruising, small ship, destination oriented cruises, and the fuzzy area between ultra-luxury and mass market (Azamara, Oceania) are increasing in size and popularity. This market is becoming more popular with traditional cruisers and destination travelers who want comfort and convenience without the "theme park/resort" atmosphere of the newer and larger ships.

The times they are a changing.

Take care,
Mike

I hope you are right about the cruisers who want comfort and convenience without the theme park/resort atmosphere.We have no desire to cruise on one of these mega ships.Altho it seems like a lot of the new ships being built are of the mega ship brand.Makes you wonder how many of these ships the market can handle?Where will it end? In the future will there be only a couple of handfulls of oversized mega ships for people to cruise on? The more people we can pack on one ship the better.Or will they start building smaller mid sized ships? I hope for the smaller ships.
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Old May 4th, 2014, 04:24 PM
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On a regular basis, I'm hearing my clients say they would prefer to pay a bit more and have the quality of what cruising was like many years ago. These new mega ships have so many people onboard, it's very difficult to feed them all in a short period of time and still maintain a high level of quality. While the mega ships are amazing adventures, personally I like the ambiance and intimacy of the smaller ships. But most classes of ships have their uniqueness and I would go on any of them, small or large, for their different experiences. Besides, a bad day on a cruise is better than a good day at the office!

Pete
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