After posting an average annual growth rate of more than 8 percent a year for the past five years, the European passenger base has grown from 3.1 million in 2005 to 6.1 million in 2012. With more ships under construction by European cruise brands, and with the North American brands also sourcing in Europe, the popular forecast is for European passengers to exceed the 7.5 million mark by 2021.
That still means that the market penetration in Europe as a whole will be just above 1 percent starting the next decade, compared to 3.5 percent in North America. As industry executives, forecasters and analysts expect European markets to reach the same penetration level as North America that means another 18 million Europeans could eventually be cruising.
The economic turmoil in Europe, however, may be putting the most optimistic market growth forecast on a longer term trajectory.
Meanwhile, capacity will continue to increase, putting more pressure on pricing and deployment.
According to the 2013 Cruise Industry News Annual Report, capacity growth by European brands is continuing at a good clip for the next three years with 4.9 percent in 2013, following 11.9 percent in 2012; 2.5 percent in 2014 and 8.5 percent in 2015, before slowing down to 1.7 percent in 2016, 1.1 percent in 2017 and 0.5 percent in 2018.
In addition is the North American capacity being deployed and sourced in Europe. Although for 2014, most of the North American brands are reducing their capacity in Europe, including Carnival, Princess and Royal Caribbean. Norwegian Cruise Line stays relatively flat year-over-year.
The largest European market is the UK at 1.7 million passengers, but after years of growth the market stagnated in 2012 due to economic hardships. Germany, however, showed an 11 percent increase last year and will soon catch up with the UK market, based on the newbuildings to be introduced by AIDA and TUI.
Other markets also showed growth, but they are relatively small, including France, Scandinavia, Benelux, Switzerland and Austria.
However, Italy and Spain, two major markets, both experienced significant declines in 2012 – partially due to the Concordia incident in Italy – as well as economic uncertainties and the general severe downturn in Spain.
Overall, the European markets grew by 1 percent in 2012. While that maintains the positive trend, it was less than the new capacity introduced.
Pending a turnaround of the ongoing economic crisis in major European markets, growth may slow down or continue at depressed pricing, awaiting a turn-around.
Solutions range from developing new source markets, to offering new products, more winter cruises in Europe, or moving ships seasonally, even year-round, to other markets.
>> Also in this section: in-depth profiles on every European cruise line.