Itinerary Planning: Driving New Markets

With the globalization of the cruise industry, more ships are spanning the globe. While the cruise companies are tapping into new markets worldwide, their existing customer base is also looking for new experiences. In addition, passengers are willing to spend more for a cruise that is perceived to be more exotic. The combination is driving new deployments and itineraries.

 The big benefactor is the Mediterranean, where more ships are sailing a longer season – from April and May through November and into December – and some are staying through the winter as well.

More ships are also sailing seasonally in South America, sourcing both South American and North American passengers, and Down Under, in Australia and New Zealand, sourcing passengers locally and from international markets.

Western-owned ships are also experimenting with Asian passenger sourcing mixed with international passengers and Asian deployment.

“Heart and Soul”

Still, the Caribbean remains “the heart and soul” of the industry as one itinerary planner put it. The Caribbean benefits from being close to the single largest cruise market, North America; the European heritage of its island nations; and by being the only true year-round sailing region.

But because of industry trends, the Caribbean's share of the total worldwide cruise market has been declining in recent years, from more than 50 percent five years ago, to less than 40 percent in 2008. By comparison, the Mediterranean has grown from 15 percent to nearly 22 percent over the same five years.

The shift can partially be attributed to too many ships being introduced in short order in the Caribbean, putting a downward pressure on pricing, while pricing in Europe remained strong. Thus, the North American ships have followed the money, so to speak, and sailed to Europe where the European-based cruise lines have also been growing and putting more ships into service.

New hardware, however, promises to drive Caribbean growth and market share up again with the arrival of new, bigger classes of ships from the leading cruise operators. In addition, as the European fleet grows, more European ships will also be destined for winter service in the Caribbean.

Growth Markets

The third largest market, which is seeing strong growth year-over-year, is the Mexican Riviera, building traffic with more ships sailing from Los Angeles, San Diego and San Francisco, and more ports being developed on Mexico’s Pacific coast.

Alaska is also maintaining its share, despite the infamous $50 head tax, and capacity is up over last year.

New England and Canada will also be seeing growth, driven partially by the traditional fall foliage season, but also by more ships being deployed on the East Coast.

The trans-Atlantic trade is also up, with more ships going to Europe and from Europe to the Caribbean.

The big loser is Hawaii, where cruise capacity will be down almost 50 percent after NCL America’s two ships are pulled out, leaving only one ship year-round in the market.


Despite the headlines touting China and other exotic destinations, 75 percent of the cruise capacity will sail in the Caribbean, the Mediterranean, the Mexican Riviera and Alaska in 2008.

That is not to say that other regions are not important, and that they do not have potential.

With a growing base of experienced passengers wanting to see new destinations, and with new markets being developed in Europe, South America and elsewhere, more ships are expected to sail to new or previously underdeveloped destinations.

Carnival Cruise Lines and Royal Caribbean International, contemporary brands appealing to a mass market, are good examples.

Carnival, which has traditionally focused on the Caribbean, will have two ships in Europe this year and will also sail around South America.

Royal Caribbean will be the single largest North American brand in Europe and will also have four ships dedicated to foreign markets, sailing out of Southampton in the summer,  and from Santo Domingo and Colon and in Asia during the winter.

In addition, Costa Crociere will have two ships year-round in Asia and sails seasonally from Dubai and Mauritius.

And AIDA Cruises will sail from New York to New England and Canada this fall with German passengers.

Who could have foreseen this development only a few years ago? Tomorrow is full of possibilities.

Excerpted from the Cruise Industry News Quarterly Magazine: Spring 2008

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