Released on = April 16, 2007, 8:55 pm

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = In the early 2000s, the number of cruise passengers
worldwide grew by between 8% and 9% a year. Growth in 2005 is expected to be lower
due to a shortage of capacity and the beginnings of a squeeze on personal incomes,
especially in the UK and Germany.

Press Release Body =
The Cruise Market - Market Assessment 2005

In the early 2000s, the number of cruise passengers worldwide grew by between 8% and
9% a year. Growth in 2005 is expected to be lower due to a shortage of capacity and
the beginnings of a squeeze on personal incomes, especially in the UK and Germany.
In the longer term, South East Asia has enormous potential for the development of
cruise holidays. Cruise trends in the UK include a rise in the popularity of
mass-market cruise holidays lasting a week or more, a fall in demand for
premium-cost cruises and an increase in budget cruising.

Cruises account for around 6% of UK households\' spending on package holidays.
Generally, only households in the highest income decile can afford a cruise costing
more than around £1,500 per person from their income.

The cruise sector should benefit from the ageing population in the UK, provided that
sufficient pensioners have high enough incomes to afford cruise holidays. This
should be the case in the short and medium terms, but the long-term prospects for
pensioners\' incomes are not so rosy.

The international cruise liner fleet numbers around 340 in 2005. The cruise industry
is controlled from the US, primarily the state of Florida. The leading operators are
Carnival Corporation and Royal Caribbean, with Star Cruises of Malaysia a somewhat
distant third. The major lines are going for economies of scale and building super
liners, some of which carry more than 3,000 passengers. Huge liners have a limited
choice of destinations because of their size and are primarily floating resorts, but
lines with large ships can cope much better than lines running small ships with the
discounting needed to fill unsold berths before departure. Scope for new entrants to
cruising is limited, except in specialist niches, such as golf or garden cruises.

Pollution from large cruise ships is a growing problem. Most cruise ships are
registered under flags of convenience, enabling operators to reduce their costs by
bypassing the strict regulation applying to UK-registered shipping, for example.
More than 40% of liners carrying 1,000 or more passengers are registered in the
Bahamas and another 17% are registered in Panama.

Cruise lines are beginning to consider how to reduce the environmental impact of
their ships. Gas and steam turbines to replace diesel engines are a promising step.

Rising oil prices will put pressure on margins, especially in Europe, where there is
little scope to put up ticket prices. Mass-market lines will not be able to raise
ticket prices appreciably, although at the top end, the charter and small-ship
cruises catering for wealthy travellers should prosper, particularly if they can cut
promotion costs by relying on repeat custom. Commodification of the cruise
experience is a potential problem for the lines reliant on very large ships.

The South East Asian market should grow massively in the long term but, in the years
to 2010, the US market will become even more dominant than it is in 2005.
Constraints on future growth include capacity rising by less than 5% a year, weather
problems, security threats and oil prices


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