CRUISE SHIPS MARKET

KEY FINDINGS

• Using resilient supply chain, changing business models and changing patterns to seek revenue as the challenge for the cruise after the pandemic is to seek revenue for a year then march for profit margins over the next coming years to normalise
• Due to the virus outbreaks, most affected sectors connected to ship cruises are tourism, manufacturing, utilities and retail
• The revenue and capital growth for global cruise is expected to normalise post 2023

INTRODUCTION TO CRUISE SHIPS MARKET

The ship cruise is used for a sojourn or for a temporary stay which comes with certain stay packages where passengers go shore without a destination for tours.

The ships follow a certain route with various packages and amazing facilities following like islands and many attractions in the ocean. The ship cruise also helps to handle supply chain logistics holding products and materials despatching it to various shores and other parts of countries from point A to point B.

The companies which despatch steel and other materials offshores have shown severe decrement affecting the manufacturers (durable and non-durable goods) and construction projects in the multiple countries as the government is currently interested only emphasizing driving fast economies and safety of the people.

The retail sector have still settled to maintain and keep pace with the customers during the ongoing pandemic also.

FACTORS AFFECTING THE SHIP CRUISE

• Ship passenger capacity
• Average duration of cruise
• Average price per person per day
• Ticket
• Onboarding spending
• Fuel
• Agent commission + related fees
• Marketing campaigns
• Operation costs
• Payroll
• Food
• Fuel
• Onboard costs
• Depreciation/ Amortization

CRUISE SHIPS MARKETMARKET SEGMENTATION

For demand centric growth, there are multiple segments to list out for the global cruise segment:

CRUISE SHIPSMARKET SIZE & ANALYSIS

The growth of the market kept pace since this decade as per the statistics but as compared to the previous year there was a significant decrease and a net loss of $19 Billion USD as the current revenue for cruise in-scope (multi-day cruises, ocean cruises and river cruises) beholds $7.8 Billion USD for the year 2020.

Most users from working class segment accessed the cruise services from age of 25 - 44 consolidated a wholesome 51.6% as compares to the other age groups as per the market research survey.

The penetration rate of the cruise segment has significantly decreased significantly for this year and the number of users is estimated to pace up and normalise after three years probably. The cruise users segment decreased by 20,947 from the previous year and expected to increase 8967 users from the current subscriber base of 8055.

CRUISE SHIPS MARKETCOMPETITIVE LANDSCAPE

The largest ship operators in the world as per the market share are: Carnival Corporation, Royal Caribbean Cruises and Norwegian Cruise Ltd consolidating almost 75% of the gross total of $45.6 billion where all are headquartered at Miami, Florida, USA.

These companies use offshore to avoid an exorbitant pay of $90 billions on the taxes. The cruise lines are only expected to pay around ($4 - $15) ranging when reaching at the port. As per the statistical comparison and data provided by New York Stock Exchange, in the span of two months from January 2020 to March 2020,the stock prices of Carnival Corporation and Royal Caribbean Cruises fell by -63% and -80% respectively.

In USA, an average passenger choosing a stay of 7 days costs approximately around $1,700 where cruise earns earn a profit of around $250 with expenses including depreciation, agent costs, marketing, lodging over, payroll, food, ongoing costs, fuel etc. 

COVID-19 IMPACT ON CRUISE SHIPS MARKET

It was expected in the cruise industry, the supply chain system will pace up as the supply of the tourist or passengers would surmount the demand in the coming years.

Due to the ongoing Covid-19 pandemic outbreak, the cruise industry has been badly affected due to the two most prime factors: low media coverage, lesser involvement of government (as the government is currently working on emphasizing the focus on safety parameters of the people due to the ongoing virus outbreak) and the global cruise market comes under travel and tourism industry have faced a severe decline in global sales with lesser supply and demand as compared to the statistics of the previous years.

Since April 2020, Y-O-Y change the US sales are decreased by -83% in the cruise industry due to the coronavirus epidemic turned pandemic. After growing this business from past decade and putting a hefty $42 billion under the cruise belt, the outbreak has evaporated the net capital in no time damaging the image of this sector.

The optimum challenge is to make a resilient supply chain to increase the operations (vessels and containers), selling old ships and applying new tactics to seek revenue. The major challenge is about the workforce management (People management) of the cruise facility during this pandemic.

During the rise of the pandemic, The Star cruises in Hong Kong signed a contract to have made a temporary housing engagement of foreign workers and moved to go digital by giving customers a soothing experience by just sitting at home and enjoying the cruise on a digital mode. But the real cruise experience hits different.

The future prospect for the next year is people are starting to rebook and the supply chain (despatch of vessels and containers have already started). The growth in future is expected to be less but would gain the confidence of the customers.

CRUISE SHIPS MARKETNEW PRODUCT LAUNCH

A new environmentally friendly cruise ship was launched by MSC Cruises. The MSC Eurybia will be the second ship in the queue to run on LNG, which is expected to reduce CO emissions by up to 25% in comparison to conventional fuels.

Additionally, it is reported to nearly eliminate other air emissions. The cruise operator claims that when bio and synthetic fuels are made accessible, emissions from the new environmentally friendly cruise ship will be significantly decreased. 

The ship will also be fitted with contemporary environmental technologies, including the 'Baltic Standard' advanced on-board wastewater treatment system and waste management handling.

A technique for managing underwater radiated noise will be used to reduce the impact of vibrations on marine life. The eco-friendly cruise ship will also have five pools, a water park with a coral motif, ten dining options, 21 bars and lounges, a 954-seat theatre, and other amenities.

In order to facilitate zero emissions, it will also include shore power connectivity and energy efficiency measures.

The largest cruise ship ever built by Princess Cruises is being launched. The ship will have 21 decks, a weight of 175,500 tonnes, and a capacity for 4,300 passengers. For comparison, Royal Caribbean's Wonder of the Seas, which weighs 236,857 tonnes, is the largest cruise ship in service today.

The Sun Princess is undoubtedly enormous, but it is not among the largest ships in the world. The new ship will also have more entertainment options and relaxation areas, as well as Princess Cruises' biggest casino ever.

A five-day Caribbean Getaway, two distinct seven-day Eastern Caribbean cruises, and a seven-day Western Caribbean cruise are available as itineraries.

The world's longest river cruise was launched by India, marking a significant historical milestone that is likely to change the tourism landscape of many of the cities and states that it will pass through as well as the ecosystem of the inland waterways nationwide, creating more formal and long-term employment for thousands of people.

The tourism industry is overjoyed and certain that the introduction of this ultra-luxury river cruise would significantly strengthen the country's luxury tourism industry by bringing in a large number of foreign visitors.

The Covid-19 pandemic forced a postponement of the beginning of this voyage, which had been scheduled for a very long period. But now that it has debuted, they are really optimistic that this will alter how river cruises are perceived in India.

They are also looking into other river systems in the southern portion of the country for trips comparable to these, which will be another significant advancement for inland waterways.

CRUISE SHIPS MARKETCOMPANY PROFILES

• Carnival Corporation
• Royal Caribbean Cruises
• Norwegian Cruise Ltd