Europe is the new growth market for the cruise industry. Not only are the Europe-based cruise lines growing their capacity by introducing new ships, the U.S.-based cruise lines are also sourcing more passengers in Europe and dedicating ships to European markets.
Both Norwegian Cruise Line and Royal Caribbean International are deploying ships year-round in Europe.
The growth trend in Europe follows the American model whereby the bigger companies increasingly dominate the market with new ships forcing the smaller operators and their older ships to the sidelines.
More European homeports are also being introduced, along with ports of call, as the cruise lines tap more different markets and introduce new itineraries and sail longer seasons.
This year, the European fleet counts 116 ships, compared to 152 in North America.
In addition, among the 27 newbuildings on order at press time, 11 are being built for European operators.
The picture that is emerging is that of the largest cruise brands, Costa Crociere and MSC Crociere, catering to pan-European markets, and a second tier of brands dedicated to national markets, such as P&O Cruises and Cunard Line in the UK and AIDA Cruises in Germany. These are the dominant brands.
Then follows a third tier with other brands being built up by the major companies, dedicated to the Spanish, German and French markets.
In addition are other, smaller national brands in mainly the British and German markets, as well as a number of smaller operators in niche markets, offering luxury or exploration type cruises at higher per diems.
The exceptions to the rule are Thomson Cruises in the UK and Louis Cruises in the Mediterranean, both with large fleets, offering low cost cruises.
Thomson’s success can be attributed to its infrastructure whereby the company also owns travel agencies, airplanes and destination hotels, in addition to ships, which it charters, thus minimizing its financial exposure. Louis, meanwhile, may be last vestige of the traditional Mediterranean cruise lines with older, smaller ships (minimizing capital costs), but benefitting from a unique business model, being part of a large hotel and resort company in Cyprus, and also chartering ships to European and South American tour operators.
Nearly 5 million European passengers cruised in 2009, according to the industry sources.