CONTENTS EXECUTIVE SUMMARY 2013 UK CRUISE MARKET

Transcription

1 THE CRUISE REVIEW PUBLISHED MARCH 2014

2 CONTENTS EXECUTIVE SUMMARY 2013 UK CRUISE MARKET EXECUTIVE SUMMARY 3 MORE GROWTH FOR UK MARKET 4 BRITS CHANGE THEIR CRUISE HABITS 6 MILLION CRUISE FROM UK PORTS IN CRUISE CONTINUES TO PROVIDE GREAT VALUE 10 CRUISE DEVOTEES REMAIN LOYAL 12 PASSENGERS LEAVE IT LATE 13 DESTINATIONS AND VALUE STILL THE GREAT CRUISE PERSUADERS 14 CRUISING POPULARITY GOES SOUTH 15 BUMPER YEAR FOR EUROPEAN RIVERS 16 UK cruise market still growing and retains its position as No.1 in Europe The Mediterranean remains the go-to destination although Northern Europe looks set to become the top choice for cruising Brits European river cruising reinvents itself as passenger numbers soar 22 Cruises from UK ports set to overtake fly-cruises Overseas cruise passengers flock to UK in record numbers Air Passenger Duty continues to dampen Caribbean fly-cruise holidays but this may change following the reform of APD Destinations and value still the keys to higher cruise sales 2 3

3 MORE GROWTH FOR UK MARKET The UK cruise market is on the march again. After a decade of growth came to a virtual standstill in 2012, there was a significant increase of 25,000 passengers in This ensured that the UK held off the challenge of Germany to remain the largest cruise market in Europe and the second largest in the world (after North America). This was achieved despite another tough trading year with consumer confidence and discretionary spending still not back to pre-recession levels. As a result, little extra cruise capacity was put on sale in the UK. This is a situation that continues into 2014 but 2015 will be a completely different story with the arrival of the new P&O Cruises ship, Britannia, and Royal Caribbean International s new Anthem of the Seas, both sailing out of Southampton. Britannia launches in March and Anthem of the Seas, one of the company s new Quantum-class ships, will arrive in May for the summer and autumn. Princess Cruises Royal Princess also makes a return to Southampton after its naming ceremony there last year, offering cruises in the spring and summer. These deployments are a reflection of the industry s renewed confidence in the UK and should ensure the sector increases its share of the UK holiday market. This appeared to have dropped in 2013 as although passenger numbers grew 1.5, early estimates were for a 4 increase in foreign holidays and 6 in package holidays. However, cruising has still trebled its share of the package holiday sector and more than doubled that of the whole foreign holidays market since UK Ocean Cruise Market Year Passengers change , , , , , , , , , , Ocean Cruising s Share of Foreign Holidays Market From The UK Year Foreign Holidays Foreign Inclusive Holidays/tours Ocean Cruise Holidays** Ocean Cruises share of inclusive foreign holidays ,670 20, ,492 14,507 1, ,442 14,257 1, ,819 14,740 1, ,173 14,470 1, ,607* 15,331* 1, * 4.6* * Estimated ** Includes Republic of Ireland Source: IRN Research; International Passenger Survey Crown Copyright 2014 Ocean cruises share of all foreign holidays 4 5

4 BRITS CHANGE THEIR CRUISE HABITS As the UK cruise market has continued to grow, there have also been some major changes not just in where the British choose to cruise but also in how they cruise. Just 13 years ago in 2001, fewer than one in eight UK passengers were cruising within Northern Europe. That meant less than 100,000 people, a number that increased more than fivefold by 2013 when nearly one in every three passengers was cruising to Norway, the Baltic, around Britain or along the North and Western coasts of Continental Europe. For Norway alone, the number of cruise passengers joining their ship at a UK port has increased from 37,000 to 218,000 in ten years. And this means it has overtaken the Mediterranean for the first time as the favourite destination for those passengers beginning their cruise from a British port. There was a 20 increase in cruise passengers to Northern Europe in 2013 while numbers for the Mediterranean fell 8. A similar result in 2014 would see Northern Europe overtake the Mediterranean as the top cruise destination for UK passengers for the first time since the Brits invented cruising two centuries ago. And that is despite the number of passengers to the Mediterranean doubling since The Caribbean has not fared quite so well with a 3 decline in 2013 meaning that passenger numbers, having peaked in the late 2000s, have now only grown 25 since 2001 despite the corresponding 123 increase in the UK market. While the Northern European boom can be attributed, in part, to the cruise lines need to reduce sailing distances and speeds to conserve fuel and minimise costs, the tailing off in Caribbean cruise numbers is down to a big shift towards cruising from UK ports at the expense of fly-cruise sales. Only a third of UK passengers began their cruise holiday at a British port in 2007, by 2013 it was just short of half and either this year or in 2015, they are expected to be in the majority. This has been driven by the deployment of more ships to existing and emerging cruise homeports around the UK coastline. From the cruise consumer point of view, there is no doubt that the Air Passenger Duty (APD) and the impact of higher fuel costs on the rest of the flight fare has put Caribbean fly-cruise prices out of the reach of some. There were nearly 100,000 fewer Caribbean fly-cruises taken in 2013 compared with However, the Government announcement that APD is being reformed may change this, as from April 2015 all long haul flights will carry the same APD cost. This means that passengers flying to the Caribbean will pay the same APD as if they were flying to the US. 3 Destinations Booked by UK Passengers 4 UK Port Cruises Vs Fly Cruises Destination change 13/12 Mediterranean (8) Northern Europe Caribbean (3) Atlantic Islands Other Areas Total 776 1,533 1,622 1,700 1,701 1,726 1 UK Port Passengers Fly Cruise Passengers Year Passengers growth share share ,335, , , ,477, , , ,533, , , ,622, , , ,700, , , ,701, , , ,726, , ,

5 MILLION CRUISE FROM UK PORTS IN 2013 The fast-growing popularity of cruising close to the UK has not been confined to British passengers. In 2013, a bumper 41 increase in overseas passengers flying in to embark on cruises from the UK meant that their number had almost doubled in six years. It also meant that - for the first time in a single year more than a million passengers (UK and overseas) embarked on cruises from UK ports. Also, passengers calling at UK ports during a cruise grew 20 in 2013 so that their number had more than doubled over the same six-year period. This total is also on course to reach a million within a couple of years. The number of different British ports benefiting from cruise calls also topped 50 for the second year running. 5 Embarkations at UK Ports Year Total Embarkations Increase UK Passengers Overseas passengers share of overseas Port of Call Passengers at UK Ports Year Passengers 365 (4) change Ports Visited 8 9

6 CRUISING CONTINUES TO PROVIDE GREAT VALUE With average cruise durations varying year-onyear, the most accurate price comparison for cruise holidays are the daily rates and these show that cruises cost an average 134 per day in 2013, 6 more than in However, in 2013 the average price paid for a cruise dropped by 12 and that for a summer cruise by 26 to 1,287 with an increase in shorter cruises contributing to the fall in prices. Even better news for consumers was that one in every two cruises sold in 2013 cost less than 1,000. There was strong demand for longer winter cruises and the ultra-luxury cruise companies had another good year attracting more than 27,000 guests. 7 Price ( ) Trends In UK Cruise Market 501-1,000 1,001-1,500 1,501-2,500 2,501-5,000 Year , Average Revenue ( ) per UK Passenger Year Summer Winter Year UK Market Cruise Per Diems Year Ultra-Luxury Cruise Passengers Year Summer Winter Total of all cruises Included Crystal, Compagnie du Ponant, Hapag-Lloyd, Hebridean, Regent, Seabourn, Seadream, Silversea 10 11

7 CRUISE DEVOTEES REMAIN LOYAL PASSENGERS LEAVE IT LATE Cruising has maintained one of the highest satisfaction levels in leisure travel and this continues to drive an equally high level of repeat business and not just from year to year. In 2013, for the second consecutive year, more passengers took multiple cruises than took just the one cruise. The ratio of first-timers fell by four percentage points and as they are generally younger than the average repeat cruise passenger, this also contributed to the increase in the average age. This trend in repeat customers means that the majority of passengers at sea at any one time have cruised before and this has been reflected in the average age of passengers being 57 years in The percentage of first-time cruisers has been volatile in the recent recessionary years as cruise companies have marketed even more strongly to their pastpassengers. The percentage of 2013 cruises booked within three months of departure was the highest for 10 years but this reflected, to some extent, the market situation in 2012 when economic indicators had not yet started to improve. This affected the early booking market for 2013 cruises to the extent that the ratio of cruises booked more than nine months in advance (23) was the lowest for 10 years. This led to more late sales in 2013 despite the slow economic improvement in the UK economy as the year progressed. 11 UK Cruise Market Age Analysis passengers Year Up to Average Age First Time Cruisers as of UK Market 13 UK Passengers Booking Multiple Cruises Annually Year Cruises taken in last year () Year UK Cruise Market - Trends in Booking Lead Times of bookings (no. of months) Year

8 DESTINATIONS AND VALUE STILL THE GREAT CRUISE PERSUADERS CRUISING POPULARITY GOES SOUTH Destination remains the number one reason given when choosing a cruise holiday. Price and perceived value for money follow as the reasons most choose when deciding on their last cruise holiday. In times of economic stress, it is no surprise to see that the biggest changes over the last three years are the way that more all-inclusive pricing and other special offers have taken on even greater importance. The other significant development mirrors that sea-change in favour of cruising from a British port and away from fly-cruises in that flight availability from local airports is considered increasingly less important. South East England has become the clear leading region for the sourcing of cruise passengers but if London is included its 27 share is actually the same as its 27 cut of the UK population, leaving the South West as the real stand-out performer with a passenger ratio significantly ahead of its population share. 15 UK Passengers - Reasons* For Choosing To Take A Cruise Holiday Reasons Itinerary/Destinations Cruised with this line before Departure Date Duration Flights from local airport No flight To try another cruise line To try another ship Personal recommendation Travel agent recommendation Recommendation on web review/blog * Asked to select three principal reasons. Source: UK Cruise Survey 2013 (IRN Research) 16 UK Passengers - Reasons* For Choosing Their Last Cruise 17 Cruise Passengers as by Region of Residence Region UK pop South East North West South West Scotland Yorkshire & Humberside West Midlands East Midlands East of England North East London Wales Northern Ireland Reasons Price/value for money Special Offer Service on-board On-board atmosphere/service Dining Facilities on board Special Occasion Loyalty membership benefits All-inclusive nature of package Entertainment Cabins and public rooms All-inclusive drinks package Cruise themes Pre-post land stays Maiden Voyage * Asked to select three principal reasons Source: UK Cruise Survey 2013 (IRN Research)

9 BUMPER YEAR FOR EUROPEAN RIVERS The continued investment in new river cruise ships has led to a 22 increase in the number of UK passengers taking a European river holiday in 2013, a rise of nearly 50 since European river cruising is in the process of a major product re-invention and this is reflected by UK travel agents reporting a surge in demand for river cruises. In just the last two years ( ), 27 new ships have been introduced on Europe s rivers and 24 more are due during The previous generation of river cruise ships were small with few if any cabins with balconies. Dining was limited to one venue and fixed times while entertainment options were limited. This has changed radically with the new generation of ships. A third of European river cruise ships have been built within the last ten years - a quarter within the last five. These are larger than their predecessors with some having a new-style twin-deck design. They also offer the kind of multiple dining venues, spa facilities and range of cabins with balconies which have already combined to transform the ocean cruising. Another key change is that most river cruise brands have now moved towards a more comprehensive and easier-to-understand all-inclusive pricing model. The overall size of the UK river cruising market is still being masked by Egypt s ongoing political problems which have had a devastating impact on the country s tourism and Nile river holidays. This has resulted in the number of UK passengers taking Nile cruises dropping 50 in 2013 and by 80 since UK River Cruise Market European Destinations change 2012/13 Rhine/Moselle/tributaries Danube Rhine/Danube Rhone/Seine Russian Italian (Po) Elbe Douro Other European Total European Non European Destinations change Nile (57) Far East/China (38) Other non-european Total non-european (45) 16 17

10 Cruise Lines International Association (CLIA) is the world s largest cruise industry trade association with representation in North and South America, Europe, Asia and Australasia. CLIA represents the interests of cruise lines, travel agents, port authorities and destinations, and various industry business partners before regulatory and legislatory policy makers. CLIA UK & Ireland First Floor 41/42 Eastcastle Street London W1W 8DU Telephone: