Seabourn Odyssey Concept DrawingThe luxury and adventure markets are two separate niche markets. While luxury passengers may seek enrichment on their cruise, some may want to sip a martini in Monaco or have lunch in Portofino. But the true adventure passenger wants to experience enrichment whether that includes paddling up an African river or jumping ashore on the Polar ice cap.

While luxury cruises all command high per diems, the adventure lines offer a range of per diems, but at the top end, command pricing comparable to the luxury lines.

The luxury market has an annual passenger capacity of approximately 250,000 on a worldwide basis concentrated on a handful of brands, while the core adventure lines carry about half that or more, depending on the definition of an adventure cruise.

Both niches, however, are in a growth mode, with new and refurbished ships entering service over the next few years.

Luxury

The luxury brands have recovered nicely after being hit by a combination of 9/11 and the introduction of new capacity at the same time. Executives interviewed by Cruise Industry News (CIN) said that 2007 was a great year, and in one case producing the highest net rates in the company’s history.

This upswing has in turn led to new ship-orders from Seabourn Cruise Line, which first ordered two ships and then later added a third, and one by Silversea Cruises, plus an option. Regent Seven Seas Cruises has said that it will also order a new ship in 2008. The new ships, which are all larger than their companies’ present generations, will be entering service in 2009, 2010 and 2011. Crystal Cruises told CIN that it is discussing a new ship with its parent company, but an order did not seem imminent.

Regent Seven Seas is the largest brand in the luxury market based on passenger capacity and will remain so even after the introduction of newbuildings by Seabourn and Silversea, because its ships are larger. Crystal is the second largest brand in terms of capacity.

In addition to these four North American-based brands, Germany’s Hapag-Lloyd is also in the luxury market segment with one ship, the Europa.

Adventure

The adventure and expedition market covers a variety of companies, from tour operators to long-established shipowners and charterers such as Hapag-Lloyd, Lindblad and Travel Dynamics, and newcomers such as Orion Expedition Cruises and Pearl Seas Cruises, offering different levels of adventure.

 Hurtigruten has, since a few years ago, also entered into this market with cruises in Antarctica, Greenland and Spitsbergen.

In addition is a variety of smaller operators in the Galapagos, out of South America to Antarctica, and elsewhere.  So, adventure cruising is a bit comparable to an iceberg, as there is much more to it than meets the eye.

The products covered in this issue range from relatively basic to luxurious and hardcore adventure cruising. Prices range from around $150 a day to more than $800 a day.

The common denominator is learning: The passengers are well-educated, well-traveled, often affluent, and interested in learning. Most have cruised before.

This market can only grow. Hence, among the established operators, Grand Circle is introducing another new ship this March; Lindblad is introducing a new ship later this year, and Travel Dynamics is introducing two more ships in 2009.

Market Potential


As the baby-boomer generation grows older and more affluent and as the cruise industry generates more experienced passengers, the markets for luxury and adventure cruises are also expected to grow.

In 2008, the luxury market represents less than 2 percent of the total worldwide cruise capacity, and the adventure and expedition segment, 1 percent to 2 percent (depending on how broadly the market is defined).


Excerpted from the Cruise Industry News Quarterly Magazine: Spring 2008