by Dori Saltzman and Maria Lenhart – travelmarketreport
January 09, 2012
This is Part One in a three-part series examining the opportunities and challenges for the cruise industry – and cruise sellers – in the year ahead.
An obvious value proposition for consumers; gradual price increases, and healthy and expanding markets of first-time cruisers and retiring boomers – these are among the top opportunities that the cruise industry, and cruise sellers, can look forward to in 2012.
Travel Market Report asked senior playmakers in the cruise industry for their views on the coming year’s opportunities. Here’s their good news:
Value that’s hard to match
“As we keep our prices quite attractive, it helps us open up new markets, like first-time cruisers, because the value proposition is even stronger now than it was three or five years ago. I think that message comes out quite clearly when the economy is a little bit soft. People are looking for more attractive holidays with a budget, and cruising starts to pop up a little bit more obviously in their choice. – Rick Sasso, president, MSC Cruises N.A.
“The value for money that cruise represents is a message we need to keep reinforcing, particularly when you look at the quality, innovation and service that the industry delivers. In tough economic times, when people are looking for more value, the cruise industry has continued to invest in the product and deliver wonderful entertainment, food, and variety of onboard experience. That’s a message we need to keep getting across – that a land-based vacation just doesn’t come close to the value for money you get onboard a cruise.” – Peter Shanks, president and managing director, Cunard
Right time for price increases
“If we stay disciplined as a whole industry on the pricing side, that helps travel agents and provides better commissions to them. It also helps each of our businesses in moving towards recovering the lost pricing we had in 2009, which we’re all on a journey to overcome in short order; we’re getting close. We think there’s an opportunity for the industry to experience some significant pricing increases.” – Kevin Sheehan, CEO, Norwegian Cruise Line
“There’s not a huge amount of growth in inventory next year, so it should be a good time for the industry to work on rate and occupancy. There are people who have gotten their financial house in order and have a fair amount of discretionary income to spend. A lot depends on the stock market. When the market is good, as it has been lately, people feel good about going on a cruise.”– Mark Conroy, president, Regent Seven Seas
Innovation that boosts market share
“The cruise industry must continue to capitalize on increasing its share of the overall leisure travel market. Only 20% of North Americans have ever taken a cruise. Carnival and other cruise operators are not only building truly innovative ships but are renovating existing ships with unique and spectacular features. It is these types of one-of-a-kind experiences that will continue to broaden the industry’s reach to consumers.” – Gerry Cahill, president, Carnival Cruise Lines
Genuine experiences for wealthy clientele
“Where you go still matters. Destination is still key in helping to distinguish a true luxury cruise experience. Adventure cruising is extremely hot right now and will continue into the future. Today’s wealthy consumers no longer want products, they want experiences. They have acquired everything they need materially, and now they’re collecting unique and exclusive experiences. Guests want to have real, genuine, non-manufactured travel experiences, which expedition cruising provides.” – Tracy McSorley, director of national accounts, Silversea
Messaging that reaches boomers
“One key opportunity is that every day in this country 10,000 people turn 65, and this will continue every day for the next 18 years. These people are entering a phase in their lives when many will have more time, money and inclination to travel. Cruise product delivery and the design of cruise lines’ and travel agencies’ marketing messages and communications need to take into consideration this rapidly growing market in order to capitalize fully on it. Of course, the companies that are most adept at attracting these people as customers will reap the greatest benefits.” – Michael Hirsch, senior vice president of sales, Oceania Cruises
Next time: The challenges facing cruise lines in 2012.