YEAR BY 2000, ANALYSTS SAY
Photo: P&O/Princess Cruises' Star Princess off the coast of St. Croix.
In an effort to offset more cau-
tious or reduced spending, some
cruise lines are augmenting their
discount practices by creating new
cabin classes at reduced rates.
In addition, cruise lines have
stepped up their marketing cam-
paigns by boosting their ad spend-
ing 20 percent in 1990 to $300 mil-
lion. The major target of the cruise
industry is first-time customers.
Cruising accounts for only 5 percent
of the nation's $100-billion-per-year
leisure business. Cruise lines are
hoping new programs and itinerar-
ies will not only attract new passen-
gers but also bring repeat business
by offering previous customers a
new experience.
According to Jim Godsman,
president of CLIA, at the Holiday at
Sea Convention in London, the
number of first-time cruisers was a
very encouraging sign for the indus-
try in 1989. A study in 1986 showed
that they accounted for 38 percent
of all business. In 1988, this figure
grew to 44 percent, and last year the
figure rose to 50 percent.
At a recent marine conference in
Vancouver, B.C., Canada, Richard
Skinner of Seattle-based Holland
America-Westours, stated that the
international cruise industry has
grown from a mere 500,000 passen-
gers two decades ago to 3.7 million
in 1989. Mr. Skinner also believes
that the industry will continue to
grow by nearly 10 percent per year
over the next five years.
The Pacific Northwest has been a
particular area of growth in the
North American market. Since
1986, Alaska has become the fourth
largest cruise destination, with
about an 8 percent market share,
surpassing the 100,000 passenger
mark for the first time.
In addition, passenger growth
through Vancouver has grown to
from 267,000 five years ago to
388,000 last year. Holland America
Westours plans to add new capacity
this year.
Furthermore, Holland America
also plans to enter the eastern Cana-
da market with the 1,200-passenger
Rotterdam. She will make autumn
cruises from New York to Quebec
City and Montreal.
"As fleets continue to grow, cruise
lines will be looking for destinations
which can help them fill their
ships," said Mr. Skinner.
"There is a huge population pool
in the New York, Boston, Philadel-
phia area which we can tap into,
that we think would love to cruise to
Canada," he added.
Rumors are circulating that Crys-
tal Cruises Ltd. also plans to enter
the eastern Canadian cruise market
with the new 960-passenger luxury
liner Crystal Harmony. Like the
Rotterdam, she would also sail out
of New York.
Although the North American
market represents 84 percent of the
world total, other areas are growing
in importance.
One international cruise opera-
tion that is hoping to consolidate
regional market share is Mitsui
O.S.K. Lines, which recently added
it fourth luxury vessel, the 22,000-
grt Nippon Maru.
According to Michael White, a
spokesman for Mitsui O.S.K. Lines,
his company is focusing on the
Asian cruise market, which has been
growing rapidly.
Compared with 4 million passen-
gers a year in North America, Japa-
nese passenger bookings rose to
142,000 last year from only 120,000
in 1988. Mitsui O.S.K. Lines' focus
on the Asian market led the compa-
ny to form a joint venture with a
Chinese entity to operate a ferry
between Kobe, Japan, and Tianjin,
China.
In addition, the Japanese compa-
ny is also involved in the new cruise
company Diamond Cruises Ltd.,
along with Finnish and U.S. inter-
ests. Diamond Cruises Ltd. plans to
enter the Caribbean and Mediterra-
nean markets in 1992 with the revo-
lutionary new SSC Radisson Dia-
mond, an 18,400-gross ton cruise
ship based on semisubmersible
technology.
Besides Asia, Europe is a growth
area for the cruise industry as well.
The U.K. market, for example, has
grown from about 90,000 passengers
four years ago to 180,000 passen-
gers. Analysts predict that this
market could reach 300,000 by
1996.
Without a doubt the cruise indus-
try will continue to grow worldwide,
but just how much will depend on
factors outside of its control.
January, 1991 25
Digital Wave Publishing