New Statistics Show Cruising is Now the Fastest Growing Segment of the Global Travel Industry
The popularity of cruise ships continues to rise. In fact, according to a recent release from the United Nations World Travel Organization, cruising has become the fastest growing segment of the global vacation industry, outpacing land-based vacations by a whopping 23%.
Eye-grabbing statistic, huh? But what does it really mean for tourism numbers in the next few years, and more to the point for Baja California peninsula ports like Ensenada and Cabo San Lucas, what does it mean for tourist destinations that realize significant gains from cruise ship visits?
The answer to the first question is that cruise ship growth is not an anomaly. The UNWTO study touting cruising growth covered the 10-year period between 2004 and 2014. In the final year of the study, 2014, cruise ships worldwide generated over $37.1 billion U.S., with each passenger expending approximately $1,779 dollars on average.
Since then, the numbers have continued to rise. Over 25 million people worldwide are estimated to have taken a cruise ship vacation in 2016, and according to Mintel, a market research company, the revenue of the United States cruise market alone is expected to reach almost $50 billion dollars by 2018.
Expedia, one of the world’s largest online travel companies, announced a record setting year for cruise ship reservations in 2016, with over $560 million in gross bookings. Expedia added 33 new franchise locations and 1,300 new Vacation Consultants in 2016, and is expecting an even bigger year in 2017.
A recent J.D. Power survey found more than 90 percent of those who take a cruise plan to set sail again, with Gen Y/Millennials and Gen Xers particularly enthusiastic about repeating the cruise experience. About the same number of cruisers would recommend a cruise vacation to family and friends.
There are fewer measurements to explain why cruise ships are steadily gaining in popularity, and why they’re increasingly outpacing traditional land-based destinations.
One obvious contributing factor would be decreasing satisfaction with airline travel, from security hassles to baggage charges and delayed departures. But as a sweeping explanation that seems less than fair to the cruise ship companies, who have continued to refine the onboard experience, adding new and improved amenities and services without compromising affordability.
Carnival Corporation – whose brands include the Carnival, Princess and Holland America Cruise Lines – has recently taken a page out of the Disney handbook, introducing “Ocean Medallions” that are similar to the MagicBand smart bracelets used at Disney’s theme parks.
The coin-sized medallions are embedded with computer chips capable of upgrading services in a wide variety of ways. Yes, they open your cabin door. They also help guests navigate around the ship, and help them keep track of wandering husbands or children.
The real benefit of these small devices (they weigh less than two ounces), however, is in tracking the preferences of guests, from favorite foods and wines to preferred activities and entertainment options.
In tracking and thus being able to anticipate future guests needs, cruise ships are not only following the lead of Disney, but many luxury hotels around the world. This is important to note, because cruise ships were already offering many of the same services as all-inclusive hotels, putting together accommodations, food and drink, activities and entertainment in one tidy package.
If they can now upgrade that package by means of superior service – augmented by medallions that tell them where you are at all times and what you typically like at that time of day – then they have managed to outdo the best all-inclusives in service, and the best luxury hotels in price.
That’s a very tangible reason for the steady growth of cruise ships, without even considering the most obvious benefit of cruising: the ability to visit multiple destinations in the course of a single, often short, vacation.
Although the West Coast does not compare to the Caribbean in terms of cruise ship traffic, the region has seen robust growth in recent years, both in terms of increased interest in Alaska and the so-called Mexican Riviera, as fears of cartel violence have gradually abated.
Ensenada and Cabo San Lucas have traditionally been the beneficiaries of port calls in Baja, with longer cruises continuing on to destinations such as Mazatlan, Puerto Vallarta, and, after a recent renewal of interest by cruise lines, Acapulco.
Cabo San Lucas saw a 50% increase for January and February 2017, as compared to the same time frame a year ago. Overall, the gains this year are projected to be more modest, up around 11.5% from 2016. Ensenada, which due to its proximity to Southern California homeports like Los Angeles and San Diego, typically sees slightly more action than San Lucas, has a more stable outlook. Ensenada hosted 254 unique cruise ship visits in 2016, according to Cruise Port Insider, and is slated to receive 259 in 2017.
Despite the slight increases this year, growth potential for Baja ports is strong; a fact bolstered by the larger ships now being deployed to the West Coast. The Carnival Splendor, a massive ship with a capacity of over 3,000 people, is moving to Long Beach in January 2018, and will specialize in week-long voyages along the Mexican Riviera. Holland America has sent a larger Vista Class ship to San Diego. Disney and Princess are also investing heavily in Mexico for the 2017 season, with the former departing from San Diego, the latter from Los Angeles.
One of the things cruisers can expect in the future is more high-end amenities, particularly in regards food and entertainment. Cruises featuring celebrity chefs and rock stars have proved very popular. A little over three months ago, the Norwegian Sun hosted a Groove Cruise, sailing from San Diego to Cabo San Lucas with an EDM (Electronic Dance Music) soundtrack courtesy of some of the world’s best DJs.
Last month, Cabo Wabo founder Sammy Hagar was one of many big names performing on the 5th annual Rock Legends Cruise, joining REO Speedwagon, John Mayall, Pat Benatar, Thin Lizzy, Creedence Clearwater Revival Revisited and many more aboard Royal Caribbean’s Independence of the Seas.
Expect the names to get bigger and bigger as this trend continues.
Other trends to keep an eye out for are culture based amenities and longer, more geographically ambitious cruises. Holland America has brought on “Mexican Ambassadors” for many of its Mexican Riviera cruises, preparing guests for upcoming port stops with language and dance classes, and introductions to regional arts, crafts and folkloric dancing. Carnival, in an effort to maximize its transfer of the Splendor, is offering a 13-day Panama Canal cruise from Miami to Long Beach. The Splendor will be the first Carnival ship and the first ship of her class to transit the newly upgraded canal locks, with port calls scheduled at Cartagena, Colombia; Puntarenas, Costa Rica; Puerto Quetzal, Guatemala; and Cabo San Lucas, Mexico.
In order to accommodate the Splendor, Carnival signed an agreement with the City of Long Beach to massively increase its dockage and facility capacity from 66,000 to 142,000 square feet. Hopefully, this upgrade serves as a blueprint for other Southern California ports looking to attract top-of-the-line cruise ships.
The Panama Canal cruise, if successful, could also point the way to connecting the best of Caribbean and West Coast destinations in longer, more wide-ranging voyages. The “sweet spot” for cruise lines, however, has always been cruises approximately one week in duration, which is why some industry insiders are also suggesting that the ideal Baja based jaunts should include another peninsular port.
Stay tuned! Prediction models suggesting continued growth and improvements in the cruise ship world promise big changes for the travel industry at large, and for Baja based ports of call.
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