June 10, 2023

Are you afraid of cruising? Not at all, say fans causing ‘bookings explosion’

Epidemics, port denials, passengers stuck on board.

Cruise ships dominated the news in early 2020 for all the wrong reasons. Some people predicted that the industry would never recover.

But cruise fans say: That’s ancient history.

“If we had to choose, we’d live on a cruise ship for the rest of our lives,” said Singaporean Peter Lim.

These 2020 issues are “no worries,” he said. “We are all vaccinated [and] take and follow personal health instructions.”

Lim said he has “lost count” of how many cruises he and his wife have been on and has already planned three cruises by 2023.

He likes “waking up in a different country the next day” and the excellent customer service and loyalty benefits that cruises offer.

Lim said he was not affected by reports last week of a Covid-19 outbreak on the Coral Princess cruise ship circumnavigating Australia.

According to the government’s website, four out of 12 cruise ships monitored by Australia in New South Wales last week had cases of Covid-19. Coral Princess was classified as “Tier 3” – the highest level of risk – indicating that more than 10% of passengers are positive or that the ship is unable to maintain critical services.

According to Australian regulations, passengers who test positive on cruise ships must self-isolate for at least five days. But it is far from being “trapped” on board as some media outlets suggested, Lim said.

“The local health authorities allowed those who were not infected to enjoy the schedules and programs,” he said.

No more worries about Covid

According to a survey of 4,200 customers by the travel insurance company Squaremouth, almost two out of three passengers say they are no longer worried about Covid-19 on cruises.

The company said this is a “complete change” from earlier this year, when 63% of its customers said Covid-19 was their biggest cruise-related concern. According to a survey published in October, respondents say they are more worried about the weather and airline disruptions.

Popular ports like the Bahamas are waiving Covid requirements such as vaccinating cruise passengers to disembark.

Daniel Piraino / Eyeem | Eyem | Getty Images

The “2022 Member Survey” released by Cruiseline.com and booking app Shipmate found that 91% of respondents planned to take a cruise by 2023.

According to Arrivia’s new report, regular leisure travelers are also open to cruises again. The travel loyalty provider, which runs programs for American Express, Bank of America and USAA, said 75% of members said they planned to take a cruise in the next two years.

The pandemic didn’t scare off new recruits either. Neel Banerjee, an Indian citizen, said he has no doubt that he will be taking a cruise with his family this month on Royal Caribbean’s Spectrum of the Seas – his first cruise ever.

She said she felt safe and that her family wore masks in crowded areas.

He may be cruising again as early as next year, he said.

“explosion of bookings”

When cruise lines began dropping vaccination and testing requirements in August, the industry saw “an explosion in bookings,” according to Patrick Scholes, director of lodging and leisure at Truist Securities.

He told CNBC’s Power Lunch in September that this is especially true for luxury cruises.

Norwegian Cruise Line “has by far the largest exposure to luxury and high-end luxury … that the consumer spending portion of travel is blowing away the mass market spending,” he said.

Grenada’s tourism authority said 202 cruises are scheduled to visit the island this coming season, up 11% from the year before the pandemic.

Michaela Urban / Eyeem | Eyem | Getty Images

When bookings opened for Norwegian Prima, Norwegian Cruise Line’s new ship class, it resulted in “one of the best days and weeks of bookings in our company’s 55-year history,” Braydon Holland, Norwegian’s senior vice president, told CNBC.

Stefanie Schmudde, director of product and operations at luxury travel operator Abercrombie & Kent, said the rise in popularity of camping cruises has surprised travel advisors.

Luxury cruise operator Abercrombie & Kent said it is on track for a “record year” for expedition cruises.

Source: Abercrombie & Kent

“Expedition cruising” is a subset of cruises that includes smaller ships, remote destinations and talks with onboard experts such as marine biologists and astronauts, Schmudde said.

“Expedition cruises represent a higher percentage of our bookings than at any time in A&K’s 60-year history,” he said. “Demand not only exceeds pre-pandemic levels, but in many cases average consumption as well.”

Recovery by 2027

According to market research company Euromonitor International, the global cruise industry will not return to its pre-pandemic level until 2027, despite this year’s strong outlook.

In 2019, the global cruise industry generated approximately $67.9 billion according to Euromonitor. This year, it’s expected to bring in just over half that amount — about $38 billion — rising 7 percent annually and reaching $67.9 billion in retail sales again in five years.

The global recovery is being held back by two regions – Eastern Europe and the Asia-Pacific region, Euromonitor senior analyst Prudence Lai said.

Without elaborating, Lai referred to “geopolitical tensions” that are slowing growth in Europe.

In Asia, the problem is “mainly China’s slow recovery … due to strict zero-tolerance policies on Covid,” he said.

China’s share of the cruise market in the Asia-Pacific region has historically been about 80 percent, Lai said. But “right now we’re only seeing about 55% of pre-Covid levels [the] in the domestic sector, especially in the regions [near the] South China Sea and the Yangtze,” he said.

Cruise revenue in the Asia-Pacific region is expected to remain flat this year and 2023, reaching around 75% of pre-pandemic levels by 2027, according to Euromonitor’s market research database Passport.

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