Iceberg Ahead: Can the Cruise Industry Survive?

A Case For and Against the Future of Cruising

by Staff Written

January 27, 2015 at 9:26 am

The cruise industry is at a crossroads – err, cross waters.

If you’ve been online in the last few years, chances are you’ve come across some sort of news story about a cruise line disaster. Whether it’s a wreckage, onboard illness, mechanical failure or the forcing of passengers to disembark due to the age of their infant, the cruise industry continues to find itself in choppy waters.

Never before has the popular vacation choice of sailing the open seas seen so much negative press. The question is: can the cruise industry stay afloat or will it sink like the Titanic?

Despite all of the negative attention focused on cruises, forecasts still predict that this vacation choice will continue to grow in popularity amongst passengers. And the industry is banking on it. With plans to invest in expanded fleets over the next three years, top cruise lines such as Royal Caribbean and Holland America will be adding $3.6 billion in annual revenue according to Cruise Market Watch.

But, is it enough? Growth alone can’t save a sinking ship, but perhaps cutting-edge efforts will help to bring the industry back around and set sail for calmer seas. We forecast a few new trends that may reinvigorate cruise vacations in the minds of travelers, and a few potential pitfalls that scream, “SOS!”

Musical Festivals on Water
The music industry is jumping aboard the cruise industry. Popular music festivals, such as Coachella, have taken to the high seas in a growing industry trend in which bands set sail along with some of their biggest fans.

According to Travel Market Report, travel agents who sell these types of cruises report solid success and high repeat visitor rates, especially among the coveted millennial demographic. Given that cruise lines emphasize the importance of attracting first-time cruisers, this is a smart way to attract millennials who might not have considered a cruise until they saw the festival lineup. While the cruise industry might not be in crisis, this is certainly a trend to keep an eye on if sales ever start to fall, as these could soon become as omnipresent as the traditional camping festivals.

The wildly popular Bud Light Porport-paradiset Paradise cruise is another example. Bud Light has it pretty much figured out when it comes to experiential marketing and millennials. The Port Paradise promotion takes over two cruise ships and essentially throws a massive party for 5,000 fans, complete with A-list performers, beer and a private island in the middle of the Bahamas. It’s a pretty memorable – or unmemorable, depending on alcohol consumption – trip geared directly toward 20-somethings.

Customized Experiences
Research shows that millennials are largely motivated by experiences. Whether they are spending money, traveling or socializing, they are continuously looking for “identity shaping” experiences.

With this in mind, imagine a vacation that offers the benefits of cruising, sans the crowds, while giving passengers the option to select their cabin-mates and ports of call, creating an opportunity to completely customize the experience.

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The forward-thinking organizers of Yacht Week have done just that – and have seen large success. This version of cruising is slightly more luxurious than the Port Paradise getaway, but equally as party-charged as the music concerts on the open sea.

Basically, groups of friends can book a private yacht and hit the open waters abroad for a week. Croatia, Italy and Greece are just a handful of destinations that vacationers can choose from – taking the perks of a cruise and making it more personalized.

But, Rough Waters Could be Ahead

While floating concerts and non-stop parties sound appealing and are drawing fresh eyes, there remains several downsides that the industry needs to address to continue riding the wave of success.

Most cruises venture into international waters, which have contributed a host of problems over the years for cruise lines. If someone goes missing while onboard, families and law enforcement were rarely alerted prior to the end of the cruise.

A new law calls for more transparency, as cruise lines must come clean about crime onboard. In fact, reporting will be compiled quarterly and will be made available on a Department of Transportation website. You can now check out your cruise line’s record on crime, much in the same way you can in a given neighborhood. A step in the right direction, but there is still more progress to be made.

Another warning sign for the industry’s future? Cruise ships are a massive source of environmental pollution, and headlines surrounding this impact are increasing.

Cruise Pollution(1)

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According to OCEANA, cruise ships generate up to 168,000 gallons of sewage from onboard toilets, sinks and showers each day, and unfortunately state and federal laws only require a distance of three miles from the shores to dump untreated sewage. Additionally, the average cruise ship produces the same amount of air pollutants as approximately 12,000 automobiles each day.

Cruise officials have an opportunity to learn from the past and be proactive about potential problems. While the industry is still trying to reinvent itself, new promotions and events are only scratching the surface. It will take cruise lines pairing this reinvention with addressing serious underlying issues to truly chart a new course for the future. Only then will negative perceptions be reversed.

January 27, 2015 at 9:26 am

Staff Written