The Cruise Industry’s Bright Future
Why now is the time to invest in this fast growing segment of travel
If the mention of cruising brings to mind images of Gavin MacLeod and “The Love Boat”, it might be time to rethink your definition of a cruise vacation. Cruising as an industry has come a long way since the 1970’s and as innovation continued to drive change, the prospect of taking a cruise vacation started to appeal to a wider and wider market. Today, cruising is a multi-billion dollar industry offering options for every age, interest and budget. In 2015, the global economic output of the cruise industry totaled $117 billion according to Cruise Lines International Association (CLIA). And that number is on the rise as more destinations, ships and categories of cruisers continue to fuel the industry’s impressive growth.
Here are a few of the most commonly asked questions we get from prospective franchisees considering investing in a business in the cruise industry.
Is the Cruise Industry Growing?
There’s nothing that shows confidence in the industry more than the world’s leading cruise lines investing in increased capacity. Their faith in the future of vacations at sea is so strong that new ships are being built at an unprecedented rate. Between now and 2026, CLIA reports that more than 100 new cruise ships will enter the market, which is why every shipyard in the world is currently in use bringing these new vessels to life. To give you a sense of the scale of these investments, new ships coming out in 2017 alone represent a $6.8 billion spend from the cruise lines. What’s driving this growth? Unprecedented demand. People love to cruise and in the last 10 years, demand for cruise vacations has increased an astounding 62%, and in 2017, it’s estimated that 25.3 million guests will set sail on a vacation at sea (CLIA).
How Have Cruise Ships Evolved?
Zip lines, surf simulators, world-class performances, celebrity chefs; today’s cruise ships have evolved beyond our wildest dreams. When modern cruising was first introduced in the 1960’s, there were a handful of lines offering a similar product. Today, there are a plethora of cruise lines offering a myriad of experiences to meet every desire – from the non-stop excitement of a contemporary megaship, to the peaceful intimacy of a small luxury line. River cruising (a category still in its infancy) has exploded in recent years and now boasts 184 ships with more on the way!
And that’s just the ship! As more and more destinations become accessible by cruise ship each year, itineraries are becoming increasingly diverse and travelers can find the perfect mix of beaches, culture or days at sea to meet their vacation expectations. With so many options to choose from, it’s no wonder cruising now appeals to such a broad range of travelers. It truly offers something for everyone.
Who Is Today’s Cruiser?
An evolving product leads to an evolving consumer and typical cruisers today are much different than the grey-haired, shuffleboard playing stereotype than many have in their minds. With today’s ships offering amenities targeted at younger travelers, cruisers continue to get younger and younger with CLIA reporting their average age now at 49 years old. Part of the reason for this trend is growing demand from Millennials and multi-generational cruisers. Children who grew up cruising with their parents are now taking to the sea themselves, often with their own young children (and the grandparents!) as their preferred method of travel.
Cruising enjoys the highest satisfaction and repeat rates of any type of vacation with nearly 90% of cruisers saying they were highly satisfied with their trip (CLIA). However, non-cruisers also pose a significant untapped market. According to CLIA, when asked what kind of vacations might be of interest in the next three years 48% of non-cruisers also expressed interest in taking an ocean cruise.
Americans make up the vast majority of all cruisers with 11.5% of the world’s cruise guests coming from the United States (CLIA). Why do Americans love to cruise? A recent study from CLIA reported that 74% of respondents liked the convenience of being able to drive to a cruise, a fact that’s driving cruise lines to offer more itineraries originating in US home ports. Eliminating the need for flights is making cruising more affordable an enticing for Americans than ever before.
Where Do Cruisers Book Their Trips?
You might assume that the rise of online travel agencies has lead to all types of travel being booked online, however, cruising continues to be an anomaly. While many travelers turn to travel websites for simple purchases like flights and hotels, the majority of cruisers still choose to book more complex and expensive travel (like cruises) through a traditional travel agent. According to Cruise Lines International Association , 82% of cruise vacations tend to be booked through a travel agent.
So why do cruisers use travel agents? Unlike tours or other packaged vacations, there are a lot of decisions to make when booking a cruise. Which itinerary do I want? Which cruise line is best suited to me? Which ship has the amenities I’m looking for? Which stateroom category and location are best? Add shore excursions, transfers and onboard dining and you’ll be calling your agent for help before you can say “anchors aweigh”.
Even the most seasoned cruisers choose to book with cruise specialists like Expedia CruiseShipCenters year after year because they have a relationship with their Vacation Consultant who knows their travel preferences and can help them find the perfect experience they’re looking for. Best of all, it doesn’t cost any more to use a travel agent to book a cruise! Travel agent commissions come out of the cruise line’s pocket, not the customer’s, so that added expertise comes free of charge. Cruise lines invest millions of dollars each year in advertising and partnerships that support travel agents because they know this distribution channel is so essential to filling their ships.
The Future is Bright
Increasing interest from travelers; unprecedented capacity investments from cruise lines; broadening customer demographics; growing demand for agent expertise — all of this adds up to incredible potential for cruise-focused travel agencies like Expedia CruiseShipCenters. Brands with established cruise line relationships and a recognizable consumer names are well-positioned to take advantage of the cruise industry’s bright future, especially in the US market.
There has never been a better time to invest in an Expedia CruiseShipCenters franchise. To learn more about starting a business in the growing cruise industry, get access to our Free Franchise Report by filling out the form below or read the essentials about our retail travel agency franchise opportunity here.