Cruise Industry Market Is Strong while Capacity Soars with New Ships

Cruise ships are a unique business model within the hospitality industry, a hotel/guest cabin side, multiple dining venues and a tour operation in one platform. The crew skills required to operate a cruise ship safely and successfully are by far the most varied within any of the hospitality and travel sectors. Cruise ships must have large engineering staff, a navigation staff, housekeeping, cooking/dining/bar staff, entertainment, social directors and frequently, even casino staff. Frequently, only a small part of the crew consists of permanent employees of the cruise line, with the balance being contract workers provided by outside firms. The Cruise Lines International Association (CLIA) reports that the cruise industry’s total economic impact on the global economy (on a broad basis) was $138 billion for 2022. The global cruise industry is projected by CLIA to grow from 625,000 berths in 2022 to 746,000 in 2028, as many new ships are being launched.

Cruises can be particularly well-positioned for budget-conscious tourists, as consumers consider cruises to be fun vacation packages at reasonable prices. Parents cruising with children often bunk the entire family in one cabin, saving even more money. Baby Boomers find cruises a cost-effective way to fulfill their travel wishes as they get older, and Millennials and Generation Xers like the party atmosphere found on some cruises.

Cruise Lines International Association (CLIA) estimated that, on a global basis, 31.7 million passengers embarked on cruise ships in 2023 and an expected 35.7 million in 2024. Most cruise lines rely on heavy marketing and competitive prices to keep occupancy rates high. High occupancy, even if it’s necessary to reduce room prices to maintain that occupancy, is crucial, as cruise ships can earn a large portion of their revenue from incidentals such as on-board spa treatments, extra drinks, shore excursions and gift shop purchases. Gambling in shipboard casinos is also an important revenue generator.

To capture more revenues, cruise lines formed their own excursion tour operations, rather than leaving this business to third parties. While consumers could get better deals if they hired their own guides and drivers, cruise lines were hoping that the convenience of one-stop shopping would attract more customers to book through their tour groups. In most cases, passengers book their own excursions on the cruise lines’ web sites before they even set sail. Modern ships allow passengers to book excursions through channels on their in-room televisions as well as smartphone apps. Cruise lines are also offering a wider variety of excursions. In addition to the standard, guided day-long bus tours, different lines, depending on the locale of ports visited, are offering helicopter tours, dogsledding and “canopy adventures,” in which customers skate along cable lines in harnessed suits over treetops. Additionally, cruise lines are booking multi-day excursions and land extensions to their routes. Crystal Cruises offers trips through the rain forests of Borneo or four-night excursions to Jaipur, Agra and Delhi, India. Cruise lines are spending heavily on marketing and advertising to lure customers and the agents who book the majority of cruise trips.

Royal Caribbean Launches Giant Floating Palaces

Among the largest ships built to date are Royal Caribbean’s $1.35 billion, 236,857-ton, 7,000 passenger Wonder of the Seas which launched in 2022. This vessel joins four other mega-ships (each more than 1,100 feet in length), the Symphony of the Seas, Harmony of the Seas, Oasis of the Seas and Allure of the Seas. In addition, the biggest ship of all, Icon of the Seas, had her maiden voyage in January 2024. (At 7,600 passengers plus 2,350 crew, it is roughly five times the tonnage of the infamous Titanic, and about two and one-half times as big as the major cruise ships built in the 1990s.) These newest ships also far eclipse Royal Caribbean’s previous behemoths, its three Freedom class ships, launched in 2007 and 2008, that each weigh in at about 160,000 tons and carry about 4,300 passengers. All five ships offer a plethora of revenue-generating onboard activities including multi-story water slides, ice rinks, rock climbing, carousels and themed, open-air neighborhoods in the center of the ships with gardens, restaurants, galleries and shops. An important design feature of Carnival’s latest megaships is the central courtyard, with towers of rooms surrounding each side. While the courtyard gives passengers a place to stroll, shop or dine, it also enables designers to create premium interior cabins with balconies overlooking the courtyards. This is a highly desirable improvement over interior cabins on smaller, traditional ships, as such cabins sell for much lower fares since they have no views and no portholes or balconies.

New ships continued to be built, with 54 new ocean ships scheduled to make their maiden voyages between 2024 and 2028 from major shipbuilders. These shipyards are mostly in Europe. Major European shipyards include Fincantieri’s Monfalcone yard near Trieste, Italy, Meyer Werft in Germany and Meyer Turku in Finland. Fincanteiri delivered the much-anticipated Queen Anne in April 2024 to Cunard. She can carry 2,996 passengers, is 1,058 feet long and weighs 113,000 gross tons. Meyer Turku is scheduled to deliver the Mein Schiff 7 in mid-2024 for the German line TUI Cruises. This ship will carry 2,900 passengers, measure 1,033 feet in length and weigh 111,500 gross tons. Chantiers de l’Atlantique (formerly STX France) has delivered four massive ships in recent years for Celebrity Cruises, the Celebrity Edge, Celebrity Apex, Celebrity Beyond and Celebrity Ascent. The first two ships each weigh 130,818 gross tons and can carry about 2,900 passengers, while the latter two weigh more than 140,600 tons and carry up to 3,260 passengers. The Celebrity Xcel, expected to be delivered in 2025, will weigh 141,420 tons and will carry between 3,292 and 3,950 passengers.

Walt Disney Co. is doubling its cruise capacity with three new ships expected to launch by the end of 2025. This includes the 6,700 passenger Adventure, along with the Treasure and Destiny which will each carry 4,000 passengers.

Cruise lines are also working to increase sustainability. The CLIA reports that, as of 2023, there were 32 pilot programs and collaborative initiatives underway to test the use of biofuels, fuel cells and using dual or tri-fuel capable engines. 15% of the ships launching by 2028 are being built with battery storage and/or fuel cells. Other sustainable initiatives include advanced wastewater treatment systems, water conservation systems and practices, repurposing waste, exhaust gas cleaning systems (EGCS) to remove sulfur and particulate matter and systems to protect marine life. In fact, the entire global marine shipping industry is under significant regulatory pressure to reduce emissions and trash and operate in a more sustainable manner.

Some of the newer ships feature elite access to small “ship within a ship” areas featuring a concierge, 24-hour butler service and a private pool, sun deck and restaurant, in exchange for a higher fare. For example, six of Norwegian Cruise Line’s ships offer The Haven, a luxury venue open to only 275 of the ships’ capacities of 5,000 passengers each. Located at the tops of the vessels, the service offers the largest suites, a concierge and 24-hour butler, an exclusive sundeck, lounge and restaurant.

Another innovation on large ships is small, wearable medallions equipped with chips that enable passengers to order and pay for food, drinks, excursions or other items, unlock stateroom doors, find friends on board and link to social media. The devices also make embarkation and disembarkation faster and easier.

Internet Research Tip:

For extensive information about cruising and cruise lines, visit:

Cruise Lines International Association, www.cruising.org

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