The Cruise Industry Predicts 1.5 Million UK Cruise Passengers in 2008

In 2006, the introduction of new and refurbished ships from Fred Olsen Cruise Lines, Island Cruises, Louis Cruise Lines, Norwegian Cruise Line, Royal Caribbean International and Travelscope helped the UK cruise market to another record breaking year with more than 1.2 million passengers.

It was a 12% increase over the previous year and in the context of a continued flat market for outbound package holiday travel it represents substantial growth. Since 2003, the outbound travel market from the UK has more or less remained flat yet the demand for cruise holidays increased by a quarter.

Its continuing success underlines the growing importance of cruising to the UK travel industry with cruising representing nearly 6.5% of the outbound travel market by volume and a higher percentage in terms of revenue. The market was worth approximately GBP 1.55 billion in 2006 – an increase of 16%. As the cruise market has expanded, the range and variety of cruises has expanded to suit the tastes of a growing variety of travellers. From short budget cruises to long luxury cruises, cruising is appealing to the young, the old, the adventurous and the conservative while maintaining high repeat factors associated with a product with high satisfaction ratings. For similar reasons, the European cruise market is also growing healthily. In 2006, there were over 3.4 million European cruise passengers – an increase of 9% over 2005. Like the UK, the German, Benelux, Scandinavian, Swiss and Austrian markets all experienced double-digit growth rates. Nevertheless, the UK still maintained its dominant position in Europe with a 35% share of the market.

The industry predicts 1.5 million UK cruise passengers in 2008 based on additional capacity to be introduced this year and next. Royal Caribbean International, Princess Cruises, Mediterranean Shipping Cruises, Ocean Village and Thomson added capacity in 2007 and there will be four new ships aimed specifically at the UK market in 2008 – Balmoral (Fred Olsen), Independence of the Seas (RCI), Queen Victoria (Cunard Line) and Ventura (P&O Cruises) and NCL will base a ship in Southampton for the UK market. This should help push the European market over 4.0 million mark by 2008. The growth in the cruise market has a geared effect on the European economy with an estimated €19.1 billion in total output and €8.3 billion in direct spending by cruise lines and their passengers in 2005.

This digest provides some of the underlying trends that help explain why the UK and European markets are and will continue to grow at substantial pace and attract more cruise ships and cruise lines to be based in Europe.