The luxury cruise market should be well positioned coming out of the pandemic based on pent-up demand from affluent consumers combined with the best space-to-guest ratios in the particular cruise industry, according to the 2022 Luxury Market Report by Cruise Industry News.
Add in a modern fleet, global deployment, a variety of brands and a differentiated product mix, the luxury market fleet is well poised for a quick recovery and bounce back.
Absorbing Capacity
The marketplace has rocketed upwards in growth, along with 51 ships sailing within 2019, to an expected 69 this year and 89 – and most likely more that have yet in order to be ordered – by 2027.
Helping absorb this capacity will be an affluent and aging American consumer, combined with emerging source markets in Europe, Asia and Australia.
The expedition players that offer a combined luxury/adventure experience possess kept guests in the same brand, while offering new deployment options to regions such as Antarctica or the Arctic. Ponant has led the particular way, as has Silversea, with small-ship five-star luxury expedition programs.
Barriers to Entry
There will be no shortage of investment eyes and other hotel groups watching the start up of The Ritz-Carlton Yacht Collection carefully this season. Despite the multi-year delay for Ritz-Carlton, the fear of missing out may drive more hotel chains and investors into the business within hopes associated with keeping land-based guests that want to cruise in the particular brand, so to speak.
Potential brand new players will be met by shipyards looking with regard to business plus willing to cut appealing shipbuilding deals backed up simply by export financing agreements.
A rushed start up could take place in as little as three years, but still will require a new player to come up along with tens of millions of dollars, an operating coming regarding sales and marketing, plus much even more.
A secondhand acquisition of ships is even less likely. Luxury cruise lines is going to be careful to help any competitors get off the ground – hoping to hang onto hardware instead. The pandemic saw only a handful of moves as the Silver Origin took the place of the 100-guest Silver Galapagos and Genting sold the Crystal Esprit to Lindblad.
The particular Recovery
Where do we go from here? Pent up demand will fill luxury boats in the staggered restart that started in 2020, continued into 2021 plus looks set to see all ships sailing sometime this particular spring.
The biggest challenges will come from a smaller world – with certain countries still closed there are less places in order to deploy ships – thus concentrating supply which could in-turn impact pricing. That should hopefully be a short and temporary problem because the globe opens back up.
Crew recruitment and finding qualified and competent officers will continue to become a challenge intended for the cruise industry as a whole, as may finding new-to-cruise guests appearing out of the pandemic.