Forbes Magazine by: Doug Gollan
March 8, 2020
Who cruises? Contrary to the old adage that vacations at sea mainly attract “the over fed and nearly dead,” that’s not the case.
The cruise industry has been working hard over the past two decades to change its demographics, attracting younger consumers. Research from Cruise Lines International Association (CLIA) shows as of last year only 13% of customers for the $150 billion industry are over 70 years old.
Cruising’s Economic Impact
That’s good news amidst the largely bad news for an industry that is responsible for over 1.18 million jobs and $50.2 billion in annual wages.
The bad news is U.S. government officials are actively telling older citizens to eschew cruise vacations as it seeks to contain the spread of the COVID-19 Coronavirus.
Speaking on Fox News Sunday earlier this morning, Dr. Anthony Fauci, director of NIAD, recommended, “elderly with underlying conditions, heart disease, chronic lung disease, diabetes…not wait, but right now, to sort of take look at things that are at high risk, crowded places, getting on airplanes, and absolutely don’t get on a cruise ship.”
CLIA data shows the 30 million annual passengers on its 55 member lines spend an average of $376 in the port of origin before boarding a cruise and $101 in each destination their ship visits. So ramifications go beyond just the lines. The industry accounts for 300,000 in South Florida.
Royal Caribbean purchases 9,700 pounds of chicken, 60,000 eggs, 15,000 pounds of beef, 700 pounds of ice cream, 2,100 lobster tails, 2,500 pounds of salmon, 5,300 pounds of bacon, 5,000 pounds of fries and more than 2,000 pounds of wings for Miami-based Symphony of the Seas for each one-week cruise. It has 24 other ships. Less passengers and canceled voyages mean hundreds vendors in its supply chain will take a hit as well.
The Good News
By the same token, the good news may be 35% of cruisers today are under age 40, and the average age across the industry is 46.7 years old (down from around 55 years old in the 1990s).
More than 66% of Generation X (born between 1965 and 1979) and 71% of Millennials (born from 1980 to 1994) have a more positive attitude about cruising compared to two years ago, according to CLIA’s “2020 State Of The Industry” report, another reason for optimism. If healthy, both groups have low risk of serious complications from COVID-19, according to Fauci and other experts.
Mary Jean Tully, CEO of Tully Luxury Travel, a major seller of cruise vacations, says, her agency has been getting “tons of cancelations.”
The result could be bargain basement prices that attract first-time cruise customers. Last year, 18 new ships were launched, and this year 19 more vessels are scheduled to debut.
Scarlet Lady, the initial offering from Richard Branson’s Virgin Voyages, arrived in Miami on Saturday to begin commercial service.
Tully says, “Of course, there will be deals as there will be ships that they have to fill in the coming months…The Caribbean and Med continue to draw in a younger demographic and definitely Expedition Cruising is attracting a younger crowd.”
The interest is there. Two vlogs posted over the past week by Millennial travel influencers Kara and Nate chronicling their cruise to Antartica drew more than 1.2 million views on Youtube.
Any rebound probably isn’t imminent, however.
Tully says, “People are not so much afraid of cruising as they are of being quarantined so right now they’re holding off.”
At the same time, business is still moving. “We’re still seeing new bookings, but farther out for. Caribbean, Alaska are still going strong,” she says.
Tully adds, a positive for the industry is Coronavirus concerns are leading more consumers to traditional travel advisors who account for the majority of cruise bookings. “I cannot tell you how many people who come to us who booked online and they felt abandoned,” she says.
Also helpful, she says, the lines are being responsive to client concerns, something she believes will build loyalty in the future. “Cruise lines are working very well with us and trying to accommodate everybody, really relaxing cancelation and doing credits and refunding.”
Seconding that thought, Ann Scully, president of McCabe World Travel, adds, “Our Virtuoso cruise partners have been incredibly supportive both to our clients and to us. This is not a local problem, but a truly global issue which is effecting the entire breath of the travel industry. We have many clients with cruise bookings later in the year and are anxious that they can enjoy their travel plans. Having been in this industry for so many years the one thing I have learned is this. With only one life to live and enjoy to the fullest, our clients will continue to cruise and to travel this amazing world.”
She adds, “So many cruise lines are letting their clients travel later and are earning the trust and support of both clients and advisors. Travel Advisors are making sure their clients are getting the most up to date information as things change daily. The travel advisor is working twice as many hours to be sure this happens. They are owed a great deal of thanks for their outstanding efforts.”
Last week, CLIA announced an industrywide response to COVID-19, taking effect immediately, with the following actions by lines:
CLIA said more actions are planned following a meeting with Vice President Mike Pence and industry executives yesterday in South Florida.
Not Your Father’s Cruise Vacation
First-time cruisers who take advantage of deals, which in addition to lower fares, include hundreds of dollars in shipboard credits, free drinks packages, upgrades and complimentary WiFi, may be surprised at what they find.
Gone are the days of early and late seatings in one or two main dining rooms. Instead, there are multiple outlets, dozens on larger ships.
While traditional buffets still exist, there are also a wide range of restaurants. Specialty outlets offer options from popular celebrity chefs like Guy Fieri (Carnival) to fine dining featuring Daniel Boulud (Celebrity Cruises) and Nobu Matsuhisa (Crystal), as well as big-city steakhouses (Royal Caribbean and Norwegian Cruise Line).
Entertainment is no longer just shows, ping pong and shuffleboard, but large-scale water parks, laser tag, climbing walls, zip lines, surf machines, bumper car race tracks, and full basketball courts. There are also visits to private islands, providing an array of activities, including snorkeling and sailing.
For the active minded, fitness centers stay open 24 hours and the equipment onboard rivals your favorite gym at home.
Most ships today offer extensive wellness options. Canyon Ranch spas can be found on ships from Regent Seven Sea Cruises, Cunard and Celebrity.
On vessels from Crystal, Ponant, and The Ritz-Carlton Yacht Club, one of the new entrants in 2020, you’ll find water sports platforms, including toys like mini-submarines and wave runners.
Unlike hotels, which can’t move, cruise lines have the flexibility of being able to alter itineraries without canceling the entire trip.
Scully says, “The cruise lines will continue to offer great value as they have always done in the past. It is still the best value in travel as you travel the world.”
The industry may also attract another type of bargain hunter. Since the middle of January, its three largest players – Royal Caribbean Cruises Ltd., Carnival Corp., and Norwegian Cruise Line Holdings Ltd. – have each seen their stock prices have drop by more than 50% .
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