Comment: Cruise growth puts yields under pressure
A little over 12 months ago, I wrote an opinion piece for Travel Today questioning the future growth of cruising, suggesting the industry’s goal of one million Australian cruisers by 2020 would not be easy.
Under the headline: ‘Are the cruise boom years over?’, the piece argued that while growth will continue, it will plateau “quicker than expected” after a marked slowdown in 2012.
I was right on the money. It won’t be easy hitting that one million milestone. It will be an absolute stroll.
Yesterday, Cruise Lines International Association Australasia (CLIA) released its Source Market Report, the annual statistical analysis of the trends and size of the local market.
Far from further leveling of – as some commentators would have you believe – passenger numbers soared more than 20% to 833,000 while market penetration increased from 3% to 3.6%.
These figures make Australia the world leader in terms of annual growth and penetration, and make my prediction last year, well, let’s say a fraction wide of the mark and leave it at that.
One million passengers by 2020, a target regarded as highly ambitious when it was first set by Carnival Australia chief executive Ann Sherry, is now likely to be achieved by 2016, with suggestions that passenger numbers could rise to 1.5 million, and even as much as two million, by 2020.
Market penetration, meanwhile, could hit 30% by 2030, Sherry said, although that is surely a lofty and unachievable target.
But – isn’t there always a but ? – top line figures such as these, however good they are, do not necessarily translate into the one true measurement of success that matters to cruise line executives and shareholders; profitability.
There is no arguing that the continuing growth is nothing short of astounding, and if local and international cruise lines were losing their shirt in Australia they would not, you would think, continue to pile on capacity at the rate they have.
Demand is clearly being created, and the focus on cruising by travel agents, and the exposure given to cruising in the mainstream media, is putting the option of an ocean voyage in front of consumers.
Yet I wonder how much of that demand is being driven by price?
With so much existing capacity in the market, and with more arriving over the next two years, pressure will mount on matching that capacity with demand at a price that is sustainable. In short, yield pressure will grow as more cabins need filling.
International cruise lines in particular – Royal Caribbean, Holland America – will not hesitate to withdraw ships from Australia if they believe a better return on investment can be found by deploying their vessels elsewhere.
For the moment, the cruise industry is rightly basking in the success of the 2013 stats, and slapping itself on the back.
But a degree of caution may be needed over the next two or three years. Passenger growth is fantastic, and the industry should be congratulated, but it’s profitability that matters.
Latest News
The Intrepid Foundation launches appeal to support Northern Vietnamese communities following Typhoon Yagi
Intrepid Travel has launched an emergency appeal through its not-for-profit, The Intrepid Foundation, to support impacted communities in Northern Vietnam following Typhoon Yagi, which made landfall on 7 September, 2024. All funds raised through the appeal will go directly to grassroots organisation Blue Dragon Children’s Foundation, to provide immediate relief to thousands without shelter, food […]
GALLERY: Were you at the CAPA Airline Leader Summit Australia Pacific 2024?
Were you at the CAPA Airline Leader Summit Australia Pacific 2024, at The Star, Queens Wharf in Brisbane, Australia this week? See plenty of images here and the video highlights HERE.
Philippine Airlines and VietJet look to community connection near Western Sydney Airport
Both Philippine Airlines and VietJet will explore services from Western Sydney Airport with the airport’s proximity to the Filipino and Vietnamese diaspora in Sydney potentially beneficial to both carriers. Philippine Airlines VP revenue management and commercial planning Alex Featherstone, speaking at the CAPA Airline Leader Summit Australia Pacific, said the carrier would “explore” the potential […]
Virgin Australia to refit MAX-8 and acquire Rex aircraft following Boeing delays
Not the biggest announcement given everyone else is in the same boat - or plane - but what's old is new again.
Exclusive: Wendy Wu on her passion for travel continuing to run deep
Last year, she topped the Women in Travel Power List, but now she is digging deep for the next destination.
Australian Cycle Tours adds new cycle trip to the Murray to the Mountains Rail Trail
Australian Cycle Tours has added a new, extended cycle trip that includes all sections of the popular Murray to the Mountains Rail Trail. The new trip commences in Beechworth with the first two days cycling with a transfer back to Beechworth, before continuing to Myrtleford and Bright, with a cycle on the newest sections of […]
Camp in style with Reflections Holidays’ new glamping tents
It will feel like you're on safari but instead of lions or elephants it's the kids in the holiday park to look out for.
It’s all of the photos from TravelManagers 2024 conference day one!
We all have that one friend who zooms in on their own face whenever there is a group photo. If you don't, it's you.
Air New Zealand chief hints at quirky safety video in time for Christmas
We've managed to nab an Air New Zealand exclusive at an aviation summit, who would have thought?
Solis Travel announced as the latest member of Luxury Travel Collection
If Luxury Travel Collection was a high school student, it'd be telling people 'you can't sit with us', but not Solis!
OPINION: Travelport CMO Jen Catto on AI empowering travel retailers
AI will fix everything, said no one ever. But it can help.
Anangu Communities Foundation raises $75,000 at its third annual Sydney fundraiser
Generous supporters gathered at the Sofitel Sydney Darling Harbour for the third annual Anangu Communities Foundation Sydney fundraiser to help raise $75,000. Voyages Indigenous Tourism Australia administers the Foundation which so far has funded over $3 million in projects to support Anangu communities of Central Australia with a focus on building community capacity in healthcare, […]
‘Virtuoso on Tour’ photos: Virtuoso showcases its best to agent base
Virtuoso hosted its second annual Virtuoso On Tour, a destinations event at the ICC in Sydney showcasing tour operators, tourism boards and more to its agent family. The event is designed for travel agency members in Australia and New Zealand to network with Virtuoso partners across the globe. It housed six destination-themed pavilions (Australia & […]
Oceania Cruises showcases new culinary tours and itineraries in Alaska
Designed by foodies, for foodies. Well, they've sucked us in, when can we get on board?
Galapagos Shark Diving expands conservation efforts with new partnership
Got a fear of the deep blue? This is the way to overcome it... or have a panic attack.
The gloss of a garlicky brioche bun continues to shine long after leaving Amanoi
That calls time on our Chris Taylor series. We loved these so much we might have to send him on another trip.
Highlights of CAPA Airline Leader Summit Australia Pacific
What do you get when you put a bunch of aviation workers in a conference centre? Lot's of breaking news!
Air India to target Indian-Australians as part of its rebuild, says its CEO & MD
Of all the Indian cultures we love at TW, Bollywood takes the cake, and we're sure its on the entertainment menu.
Sydney Airport and Turkish Airlines announce Sydney-Istanbul flights
So much aviation news in the last few days. but this might take the cake! Years in the making.
Women In Travel: ‘It’s so important for us to create change’ Albatross Tours’ Shelley Poten
And it's a change she's making! We can't wait to celebrate with Shelley on our night of nights.
Perth a focus for Qantas says International & Freight boss
If you're not into aviation this talk may have sent you to the coffee line, but for others it was a dream come true.
Qantas unveils remuneration changes and details its journey to green in annual, sustainability reports
Qantas timed its reports for the same day as a major aviation conference in Brisbane, but it's only hiding good news.
TravelManagers 2024 kicks off in Cairns with record attendance
Want to find out the salary of a top-performing PTM? You'll have to read this story.
Research shows Brisbane international travel spike as airport prepares for major upgrade
The kind of news airport bosses in Brisbane would like to hear after spending $5 BILLION.
AmaWaterways announces fully integrated partnership with Mint Payments
Ama's financial news grabbed our attention this morning, even with a fridge full of mint slices.
Brisbane Airport boss opens CAPA Summit with $5b terminal rebuild plans
Nothing like using a hometown advantage to make a big announcement to the rest of the Aviation world.
IHG Hotels & Resorts to present ‘The Mind Lobby’ at SXSW Sydney as major partner
Got what it takes to step into the Mind Lobby? We're not sure what it entails but we're guessing escape room.
NCL returns to Greek Isles and Med in + new ports Northern Europe: 2025/26 season revealed
Even thinking about the Greek Island's has our mouths watering and mind set on Gyros!
Winter in QLD wins big as My Queensland sets all time high for sales in July 2024
If it was State of Origin season, this article wouldn't have got a start...
The NT tops list of hidden gem attractions out of Aussie states
As Australia steps into spring with temperatures set to rise above average, new research has revealed the states with the most must-see hidden gem attractions with the great outdoors proving a winner! The study, conducted by travel and luggage experts at Bounce, used Tripadvisor and search data to uncover Australia’s most treasured destinations. The Northern […]
Four lucky winners revealed for Tourism Solomons latest agent prize!
Winner winner chicken dinner! It's not the news you want if you are one of the remaining 150-odd, but you can try again!
Entire Travel Group offers $1000 for couples combining Fijian getaways with winters in Whistler
If you want to relax by the pool one week and ski the slopes the next, Entire is here for you!
Fusion Hotel Group celebrates World Wellness Weekend
Vietnam’s wellness-inspired Fusion Hotel Group is celebrating World Wellness Weekend from 20-22 September with yoga and other healthy living activities. Fusion Hotel Group has introduced a series of events and activities for guests at five of its luxury beachfront resorts in Vietnam to World Wellness Weekend. The exclusive offers include yoga, meditation, onsen baths, Zumba, […]
InterContinental Wellington unveils new Health Club and Classic Rooms makeover
InterContinental Wellington has announced the completion of its newly revamped Health Club and a stylish makeover of its Classic Rooms. Bringing a new level of luxury to its 79 Classic Rooms, including eight accessible rooms, the hotel has meticulously re-styled these spaces in collaboration with Y-6, an acclaimed Interior Architecture and Design studio based in […]
Scoot announces discount flights to Europe, Japan, Hong Kong & more
Your next holiday could be just a hop, skip and a jump away... But we'd rather take a Scoot!
Newcastle Airport signs MoU with Destination NSW to lure new domestic and international routes
Destination Newcastle! Did we ever think we would see the day?