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Tourism Economics, 2002, 9 (3 ), 337–350

DATABANK

Cruise tourism

J OHN G .C . K ESTER
Market Intelligence and Promotion Section, World Tourism Organization (WTO ), Capitán
Haya 42, 28020 Madrid, Spain. Tel: +34 91 56 78 100. Fax: +34 91 56 78 217;
+34 91 57 13 733. E-mail: jkester@world-tourism.org. Website: www.world-tourism.org

Cruise lines welcomed almost 10 million passengers in 2000. Even


though its relative significance in the tourism sector is still rather
modest, cruise tourism has been one of the fastest growing tourism
sub-sectors over the past few decades. The number of berths on offer
has increased from a mere 45,000 in 1980 to 212,000 in January
2002, with more than a doubling of capacity in both the 1980s and
1990s. Demand and supply are still relatively concentrated in North
America, with the Caribbean as the most important destination. In
recent years, however, Europe, and to a lesser extent Asia and the
Pacific, have been rapidly gaining in importance. For destinations
visited, in particular for many islands, cruises constitute a valuable
additional source of tourism receipts through the port services sup-
plied, paid for by the cruise operators and the on-land tourism
consumption generated by passengers and crew.

Keywords: cruise tourism; cruise operators; cruise passengers; statistics;


trends; WTO-OMT; Caribbean; Alaska; Europe; Asia and the Pacific

Unlike traditional transatlantic travel on ocean liners, modern cruise tourism


is above all characterized by the transformation of the vessel from a mere means
of transport to a destination in itself. The cruise ship serves as a floating hotel,
offering an attractive, convenient and hassle-free way to visit various destina-
tions without having to change accommodation. This kind of leisure tourism
can be traced back to the early 1970s, when the first modern cruises began to
operate in the Caribbean with North American tourists. In the 1990s, the cruise
phenomenon reached the UK and then the rest of Europe and Asia and the
Pacific. Passengers are generally provided with full-board style accommodation
and can enjoy a broad range of on-board facilities such as restaurants,

The author wishes to thank Raymond R. Bar-On and Manuel Butler for their useful comments.
338 TOURISM ECONOMICS

bars, meeting rooms, disco, casino, swimming pools, sauna, Jacuzzi, gym and
other sports facilities, beauty services, cinema, theatre, library, children’s activi-
ties and duty-free shops. The trend towards ever-larger vessels with more and
more facilities has meant that cruise ships have in fact evolved from floating
hotels into floating resorts. Thus a cruise operator considers its main competi-
tors to be the land resorts rather than the other cruise lines.
This ‘Databank’ article focuses on data concerning sea cruises (as opposed to
river and coastal cruises ) and is based mainly on a selection of information taken
from an in-depth report on worldwide cruise ship activity recently published
by the World Tourism Organization (WTO, 2003 ). For this report consultant
Manuel Butler carried out a comprehensive analysis of the data available in the
field of cruise tourism from a large number of sources. Divided into eight
chapters, the study analyses the current demand for cruises, the supply and
cruise line business structure, the specialities of the cruise product, the financial
aspects, the sustainability of the marine environment, safety aspects and me-
dium-term trends. The report also includes a bibliography, as well as a list of
addresses and Websites of interest. 1
In addition, in the last section of this article data will be presented on cruise
arrivals in destination countries taken from the WTO database.

Overview (Table 1 )
In 2000, worldwide cruise demand reached 9.6 million passengers. With an
average of 6.9 nights per cruise trip, the total number of nights amounted to
67 million. In both cases the share of the cruise sector is calculated to be about
1.5% of worldwide demand. At the same time cruise operators had some
200,000 berths on offer, corresponding to 0.6% of the total supply of beds in
hotels and similar accommodation. Revenue for cruise operators amounted to
US$13 billion. As the average revenue per cruise trip is almost twice as high
as the average receipts per tourist arrival (US$1,341 compared to US$685 2 ),

Table 1. Cruise sector in comparison to international tourism worldwide, 2000,


basic data.

aIn the case of international tourism receipts, averages are overestimated as they also include receipts from
same-day visits.
Source: own compilation from WTO and data from G.P. Wild (International) Limited used in WTO (2003).
Databank 339

the share of cruise tourism in worldwide international tourism receipts (excluding


international fare receipts ) rises to 2.7%. Although the cruise sector in relative
terms still accounts for only a modest share of worldwide tourism, it is noteworthy
that, when considered as a destination in itself, cruise tourism already matches
up to established destination countries. Viewed in this way, it would rank
twentieth in the world’s top tourism destinations by number of international
tourist arrivals, achieving similar results to countries such as Switzerland, the
Netherlands, Malaysia, Turkey or Thailand. In ranking by receipts, the cruise
sector would take eighth position, below China and above Canada.

Demand and supply by region (Table 2 and Figure 1 )


North America is still by far the most important market for cruise products.
Demand from the USA (with its three major sources of New York, the South
Atlantic and the Pacific) and Canada more than doubled between 1980 and
1990 and almost doubled again in the 1990s to reach 6.9 million passengers

Table 2. Worldwide cruise demand.

Source: own compilation from WTO (2003), originally based on CLIA for the USA and Canada, PSA for Europe
and G.P. Wild (International) Limited for the rest of the world.

terranean
8%

Figure 1. Capacities offered by season, 2002.


Source: complied for WTO by Manuel Butler from GP Wild (International ) Limited.
340 TOURISM ECONOMICS

in 2000. However, in 1990–2000 demand outside the region grew almost twice
as quickly, but of course from much lower base volumes. As a result, the share
of the North American market declined from more than 80% in 1990 to less
than 75% in 2000. Demand from Europe increased from 600,000 passengers
in 1990 to 1.9 million in 2000, raising its market share from 14% to 20%.
The main European market is the UK, with 740,000 passengers in 2000,
followed by Germany, Italy, France and Spain, while Scandinavia, the Nether-
lands, Belgium and Switzerland are considered as secondary markets. The
remaining 8% of demand, corresponding to 800,000 passengers, originate
mainly from Asia, with Japan, the Republic of Korea and Taiwan as the
principal sources.
The cruise itineraries offered largely reflect the current structure of demand,
as operators prefer to choose base ports relatively close to major source markets.
This trend has been reinforced as a response to people’s reluctance to fly after 11
September 2001, to the benefit of ports such as New York. The Caribbean
(including the east coast of Mexico and Central America ), mainly served from base
ports in Florida, is still by some distance the busiest cruise region, in particular
during the winter months of the predominantly northern-hemisphere source
markets. A substantial relocation of fleets from one region to another from season
to season can be observed. One of the advantages of cruise operators over their
land-based competition is the flexibility to adapt itineraries to demand. Seasonality
is thus hardly a problem for the cruise industry. In summer cruise lines include
northern destinations such as Alaska and Atlantic Europe, while in winter they
can be found in (sub )tropical zones or in the southern hemisphere. In summer,
the Caribbean is only the second most popular destination region after the
Mediterranean (Figure 1 ). The third most popular summer region is Atlantic
Europe (including the Baltic sea ), bringing the combined market share for
European destinations in the summer season close to half of the total supply.
Another 16% of itineraries are based on Alaska, an attractive destination to visit
by cruise given the limited possibilities for travel by other means, and exclusively
on offer in the summer season. The European share decreases substantially in
winter to the benefit not only of the Caribbean but also of Western Mexico and
Asia and the Pacific. And Southern America and the Indian Ocean are also added
to the supply on offer as specific winter destinations.

Structure and capacity of the sector (Figure 2 & 3, Table 3a and b )


In January 2002 cruise lines operated a fleet of 183 vessels with a combined
gross tonnage of 7.8 million and a total of 213,000 berths. The average cruise
ship measures 43,000 gross tons, accommodates 1,163 berths and is in opera-
tion for almost 15 years.
At the time the WTO study was carried out, four main groups, commonly
referred to as the Big Four, dominated the supply of the cruise market: the
Carnival Corporation (CCL ), Royal Caribbean Cruises (RCC ), the P&O Princess
Group (POC ) and the Star Cruises Group. Together these companies accounted
for 76% of the world supply of berths in 2002. Fleets consist of comparatively
young ships with high capacity (average age is around 10 years and average
number of berths is 1,500 ). Royal Caribbean operates the youngest fleet, with
Databank 341

S hare o f Be rths S hare o f Be rths


January 2002 Orde r bo o k

Ave rag e ag e o f Fle e t Ave rag e numbe r o f be rths


January 2002

Figure 2. Characteristics of cruise supply.


Source: own compilation based on Manuel Butler’s work for WTO.

Figure 3. Market share of supply on offer, by destination regions.


Source: Manuel Butler for WTO based on Christiania Bank og Kreditkasse ASA.
342 TOURISM ECONOMICS

Table 3a. Overview of cruise operators, fleet and capacity,


total fleet (January 2002).

Source: own compilation based on Manuel Butler’s work for WTO.


Databank 343

Table 3b. Overview of cruise operators, fleet and capacity,


order book.

Source: own compilation based on Manuel Butler’s work for WTO.


344 TOURISM ECONOMICS

an average age of 5.6 years and over 2,000 berths per vessel. Each of these
groups is the result of a process of horizontal concentration over the last decade
and markets a variety of cruise brands. (In April 2003 the number of big groups
was reduced even further when Carnival Corporation and P&O Princess merged,
forming a giant player that exceeds the combined share of the two other large
groups. )
The remaining 24% of the berths on offer are operated by various smaller
cruise lines. With the exception of Louis Cruises/Royal Olympic Cruises, with
a share if 5.6%, none of the smaller companies exceeds 2%. In the US and
Canadian source markets several independent cruise lines concentrate on spe-
ciality products (Disney, for instance, combines its theme parks with cruises
based in Orlando ). These predominantly target the luxury end of the market
and represent around 5% of the world supply of berths. The European market
is still rather fragmented, with many smaller companies active only within their
own national borders. Most operate just one or a few ships, in general consid-
erably older and of lower capacity than their competitors in the big groups.
Their combined share of the supply of worldwide berths is 16%. Independent
cruise lines in the Asia and the Pacific region, operating from Japan, the
Republic of Korea, India and Australia, account for slightly over 3% of the
supply of berths.
By destination region, it can be observed that Europe is still largely a playing
field for independent operators (Figure 3 ). Carnival is the market leader in both
the Caribbean and Alaska and is the only one of the Big Four that has a
substantial share in Europe. P&O has a modest presence in all regions, but its
speciality is Alaska, where its share almost equals that of Carnival. With about
a quarter of the berths on offer, Royal Caribbean is the second largest operator
in the Caribbean and the third in Alaska. Star Cruises has a clear hegemony
in the Far East, but only minor shares in the other regions. Except for their
large share in Europe, smaller independent operators account for a little more
than one-fifth in both the Caribbean and the Far East, while in Alaska they
represent only 3%.
Cruise capacity has risen substantially over time and there are not as yet signs
of an end to the expansion. The number of berths on offer increased from 45,000
in 1980 to 93,000 in 1990 and to 213,000 in 2002, corresponding to an
average annual growth rate of 7.5% between 1980 and 1990 and 7.1% between
1990 and 2002. This rate is expected to continue for at least the coming years
as the order book already contains 37 new cruise ships with almost 80,000
additional berths for the period to 2006. The actual growth rate can of course
vary, as older vessels can be withdrawn and orders can be delayed or cancelled
depending on market circumstances. Nevertheless, the potential for growth is
considered to be substantial, with demand sometimes currently exceeding
supply. Cruise operators, in particular the big groups, in general enjoy very high
occupancy rates – typically of 90–100%. The tourist cruise product is not yet
considered to have entered its maturity phase, not even in the more developed
US source market. Hence additional capacity is expected to be easily absorbed
by the market. As the big groups are expanding more rapidly than their
independent competitors, concentration in the sector will continue to increase
even without further mergers and acquisitions.
Databank 345

Destinations visited (Table 4 )


In most cruise trips passengers travel to a base port to embark on a vessel that
sails to a number of destinations calling at ports where they can disembark to
visit land-based sites. The number of ports visited during a trip depends on
the itinerary. In many itineraries ships call at a different port every day, while
in others they sail on the sea without calling at a port or stay in a port for
several days. Cruise trips can start and finish in the same base port, but may
also have two different base ports.

Table 4. Arrivals of cruise passengers (for countries and territories reporting this
type of data).

continued
346 TOURISM ECONOMICS

Table 4. continued.

Data as collected by WTO August 2003.


Source: World Tourism Organization (WTO) ©

For destinations visited, cruises constitute a relevant primary or additional


source of tourism receipts. On one hand there is the revenue from the port
services supplied, generally depending on ship tonnage and number of pas-
sengers and paid for by the cruise operators. Depending on the size and type
Databank 347

of port, services and supplies such as provisions, fuel, maintenance and repairs
also add to the benefits to a greater or lesser extent. On the other hand,
destinations receive revenue from the on-land tourism consumption generated
by passengers and crew, related to activities such as sightseeing tours, shop-
ping, eating and drinking, etc. According to data on the on-land activities
of US and Canadian cruise passengers, over 80% participate in panoramic
visits, shopping and sightseeing; 50–80% participate in excursions, cultural
visits, beach activities and gastronomy; and about 10% engage in tennis and
golf. Although most cruise packages are based on full-board, it is surprising
to note that over half of cruise passengers nevertheless visit restaurants at the
destination. Average on-land expenditure in various Caribbean destinations
ranged from US$15 to US$270 per passenger in 2001 (CTO, 2003, p 100 ),
with shopping constituting an important variable. Compared to overnight
tourism, receipts from cruise tourism will be generally lower, but the
investment needed is also more modest. An adequate port infrastructure is
of course an absolute prerequisite, but it is not necessary to invest as heavily
in, for instance, (air ) transport infrastructure or accommodation. For base ports
the situation is different, as a comparatively sophisticated infrastructure is
needed to accommodate air arrivals and overnight stays in hotels before or
after the cruise. Furthermore, the majority of the ship services will generally
take place at the base port. Accordingly, the economic impact will also be
greater.
According to the UN/WTO Recommendations on Tourism Statistics for the
destinations visited, cruise passengers (who arrive in a country on board ship
and return to the ship each night to sleep on board, even if the ship remains
in port for several days ) are considered as a specific category of international
same-day visitors. As they do not strictly spend the night in a collective or
private accommodation in the country visited, from the statistical point of view
they are not included in the category of tourists (overnight visitors ). For base
ports, the situation is generally more complicated, because cruise participants
may stay overnight in a hotel before or after the trip and should thus be counted
as tourists. Also, in most cases, some passengers will not be international
visitors, but will originate from the domestic market.
Table 4 provides an overview of the number of international cruise passengers
as reported by the various destination countries. This data series is regularly
included in the WTO Compendium of Tourism Statistics as well as in the country
profile tables in the regional volumes of the WTO Tourism Market Trends series
(since the 2002 edition ). In analysing this information, notice should be taken
of the fact that it reflects only data for countries providing this series. Coverage
is currently rather limited, with many major cruise destinations not reporting
(including among others the USA, the UK, Italy, Spain, France, Egypt, the
Republic of Korea and Japan ). Furthermore, data may partly relate to river
cruises and some countries include yacht passengers and/or leisure visits of
foreign navies. Visits to two ports in a destination country are often recorded
as one arrival (for example, in the Bahamas ).
As may be expected, many of the destinations in the Americas, in particular
in the Caribbean, record substantial numbers of cruise passengers. 3 Five des-
tinations reported over a million arrivals each in 2001: Mexico with 3.8 million
(both to the Caribbean coast, with Cozumel as the most important port, and
348 TOURISM ECONOMICS

to the Mexican west coast ), the Bahamas with 2.6 million, the US Virgin Islands
with 1.9 million, Puerto Rico with 1.4 million (with the port of San Juan not
only serving as destination port but also as a major base port for itineraries in
the southern part of the Caribbean ), and the Cayman Islands with 1.2 million.
The ratio of cruise passengers to tourists staying overnight ranges up to 3.6
times as many cruise passengers. Cruise passengers exceed the number of
tourists by two to one in the Cayman Islands, Dominica, Haiti, Saint Lucia,
Saint Kitts and Nevis, Saint Maarten, Saint Vincent and the Grenadines and
the US Virgin Islands. Many destinations recorded double-digit growth rates
between 1990 and 2001, tripling or quadrupling passenger numbers. The
strongest growers, receiving over 100,000 passengers a year, have been: Domi-
nica (36% a year between 1990 and 2001 to 208,000 from a low base ), Saint
Kitts and Nevis (20% a year to 255,000 ), Saint Lucia (15% a year to 490,000 ),
Haiti (15% a year to 357,000 ), Mexico (14% a year ), the Dominican Republic
(14% a year to 211,000 ), Aruba (13% a year to 487,000 ), Costa Rica (12%
a year to 189,000 ) and the Cayman Islands (12% a year ).
Cruise data on the USA is unfortunately scarce and far from homogeneous.
According to the Survey of International Air Travelers (IFS ) some 6–7% of
overseas travellers to the USA indicated cruise as an activity in 2000–01,
corresponding to roughly 1.5 million travellers.4 Furthermore, it can be expected
that the majority of the 6.9 million cruise passengers from North America in
2000 (Table 2 ), of which some 300,000 were from Canada, visited one or more
American ports during their trip. Florida is home to the four main cruise ports
serving as a base for the Caribbean: Miami is the world’s most important cruise
base port (3.4 million passengers in 2000 ), Port Everglades (2.7 million pas-
sengers in 2000 ), Port Canaveral and Tampa. Galveston (Texas ) and New
Orleans (Louisiana ) are also used as base ports for the Caribbean, while Key
West is included as destination port in a number of itineraries. On the East
Coast more Northern ports such as New York are gaining in importance. The
West Coast ports of Los Angeles, Long Beach, San Diego, Seattle, Anchorage
and Seward (Alaska ) serve as base ports (starting and/or ending ) for trips that
include the pacific coast of Mexico (with Ensenada, Cabo San Lucas, Puerto
Vallarta and Mazatlan as the most important ports ), Canada and Alaska (with
Juneau, Ketchikan, Skagway, Glacier Bay, Sitka, Hubbard Glacier and College
Fjord as the most important ports ). However, the major base port for Alaska
is the Canadian port of Vancouver. Canada (both Atlantic and Pacific coasts )
reported 636,000 cruise passengers in 2000. The major base port on Hawaii
is Honolulu, used either for round trips or as the start or finish port for trips
to or from ports on the American Pacific coast including Ensenada and Van-
couver.
For destinations outside the Americas it is even more difficult to get a proper
picture of the number of cruise passengers. The various Mediterranean countries
that reported data for 2001 generally showed substantially lower numbers than
the Caribbean destinations: Greece, 621,000; Malta, 259,000 (an average growth
of 17% a year between 1990 and 2001 ); Morocco, 207,000; Tunisia, 276,000
(17% a year between 1990 and 2001 ); Portugal, 169,000 (mainly to the
Atlantic ports of Lisbon and Madeira ); Cyprus, 106,000; and Israel, 23,000 (but
255,000 in 2000 ). Spain, Italy and France did not report, but port data for 2001
from the Association of Mediterranean Cruise Ports, Medcruise, show the
Databank 349

following numbers of cruise passenger movements for Spain: Barcelona 655,000,


Palma de Mallorca 531,000, Malaga 128,000; for Italy: Venice 526,000, Genoa
471,000, Naples 470,000, Civitavecchia 392,000 (2000 ), Livorno 264,000,
Palermo 181,000, Messina 126,000 (2000 ), Savona 120,000 (2000 ); and for
France: Nice-Villefranche 251,000, Marseille 165,000 (2000 ), Ajaccio 117,000
(2000 ), Cannes 99,000. Port data for Egypt indicate for Port Said 438,000
cruise passengers and for Alexandria 93,000. Outside the Mediterranean it is
worth noting the 840,000 cruise passengers attracted by the fjords of Norway.
Asian destinations that provide data show rather low figures, as none of the
major cruise countries is included (Singapore, Japan, Republic of Korea, China,
Thailand, Malaysia, Australia, etc ). Vietnam reported 285,000 cruise arrivals
but it does not make a distinction between cruise passengers and tourist arrivals
by sea.

Endnotes
1. For the index and further information, see: www.world-tourism.org/cgi-bin/infoshop.storefront/
EN/product/1296-1. WTO also gives information on cruise tourism in the World Overview &
Tourism Topics volume of Tourism Market Trends, Edition 2001 (WTO, 2001a), as well as in the
regional volumes of Tourism Market Trends, Eidtion 2002 (WT ), 2002). See furthermore section
4.8 of WTO’s long-term forecast Tourism 2020 Vision – Global Forecast and Profiles of Market
Segments, Volume 7, WTO (2001b).
2. With regard to these figures, it should be taken into account that the average receipt per tourist
arrival is only a rough approximation obtained by the simple division of the total international
tourism receipts by the number of international tourist arrivals. The average obtained in this
way will always be overestimated, as international tourism receipts, except for receipts related
to overnight tourism, also include receipts related to same-day tourism. Cruise revenue, on the
other hand, is expected to be underestimated as it takes into account only the part earned by
the cruise operator, and does not include additional tourists’ expenses, for example for on-land
activities and shopping, which are not controlled by the cruise operator.
3. See the Caribbean Tourism Organization (CTO, www.onecaribbean.org) for additional informa-
tion on cruise tourism in the Caribbean (CTO, 2003). For a previous review of data on cruise
arrivals in the Americas, see Bar-On, 2001.
4. See the Website of the US Department of Commerce, International Trade Administration (ITA ),
Office of Travel and Tourism Industries (OTTI ) at www.tinet.ita.doc.gov/view/f-2001-07-001/
index.html and www.tinet.ita.doc.gov/view/f-2000-07-001/index.html.

References
Information on the various WTO publications listed can be found in the Infoshop on the WTO Website at
www.world-tourism.org\infoshop.

Bar-On, R.R. (2001), ‘Databank – The Americas: Part 1’, Tourism Economics, Vol 7, No 4, pp 413–
428.
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(annual publication – 2003 edition used here).
WTO (2001a), Tourism Market Trends, 2001 Edition, World Tourism Organization, Madrid, (see
WTO (2002) for structure of the series).
WTO (2001b), Tourism 2020 Vision – Global Forecast and Profiles of Market Segments, World Tourism
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350 TOURISM ECONOMICS
Market Trends, 2002 Edition, Africa (also in French); Tourism Market Trends, 2002 Edition, Americas
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