Understanding the cruise process

Throughout November and December 2017, CiR embarked on five cruises on five different ships across the Americas and Asia Pacific in order to better understand the whole cruise process – from departure to debarkation –  in the two regions, one the largest cruise market globally, the other the fastest growing. 

Comprehensive study

As well as building a comprehensive suite of videos, photos and prices, auditors spoke to on board staff and fellow cruisers in order to gain a clear understanding of the mechanics of a cruise, from Duty Free category shares, store layouts, key brands and popular SKUs, shopping opportunities and possible barriers, as well as opinions on the main reasons for and appeal of cruising, the likelihood for cruisers in each market to shop duty free and on which part of the journey: before boarding, on the ship, in a port store, or even before the flight home.

An important channel for Duty Free brands

The cruise market is becoming an ever-increasingly important channel for Duty Free brands and operators, with Generation data showing robust growth for “Other Shops” (which includes Cruise along with Downtown, Border stores and other channels) in recent years. Even against a background of decreasing overall sales in 2015, Other Shops was the only channel to record growth, however slight (+0.3%), and in 2016 and Q1 2017 has continued a strong growth trajectory. 

Global Duty Free & Travel Retail Sales by Channel

*Included in ”Other Shops & Sales” are Downtown shops, Border shops & Free zones, Diplomatic & Military, Cruise ships and Low tax areas.

Total cruise PAX has surged in recent years

Increases in Duty Free sales have no doubt been buoyed by growth in total cruise PAX, which has recorded steady increases in recent years, up +23.4% versus 5 years ago. What’s more, PAX is estimated to rise a further +5.4% in 2018, an absolute growth of 1.4 million cruisers.

Global Ocean Cruise Passengers (m) & YoY Growth

Regional share

In terms of regional share, the Caribbean continues to dominate, driven by the popularity of the region with American cruisers, the largest cruising nationality. The Caribbean currently holds the lions-share of cruise ship deployment at over 35%. However, Asia is the fastest growing region, gaining over 5% market share since 2015, reaching a total of over 10% in 2017. The Med still holds the second largest share (16%), however this is down from 20% in 2015, with Alaska and South America also experiencing slight decreases.

Cruise Line Deployment by Region - % ALBD*
2015, 2016 & 2017 & % change in market share

*ALBD is the standard measure of PAX capacity within the Cruise industry. ALBD assumes that each cabin accommodates two passengers and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period

Key demographics

Growth of American cruisers has been relatively sluggish compared to some of the other key nationalities at +3% in 2016 versus 2014. That said, over 11.5 million Americans took to the seas in 2016, and as such they remain the key demographic by some margin. Robust double-digit growth was recorded by German, British and Australian cruisers, however the real growth driver is China, where the total number of cruisers in 2016 represented a rise of +200% versus 2014, a real increase of 1.4 million cruisers.

Cruise PAX by Key Nationality & Growth vs 2014
Growth (%) of Key Cruising Nationalities 2016 vs 2014
To discuss any of the information on this site, please contact Simon Best, CiR Commercial Director.
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