Cruise industry continues to expand: growth projected to exceed 11% by 2030
The global cruise market was valued at USD 7.67 billion in 2022 and is expected to grow at an annual growth rate of 11.5% between 2023 and 2030. This can be attributed to the increasing popularity of cruise holidays due to the cost differential and the convenience offered by alternative holidays. Cruise holidays are more affordable compared to alternative land-based holidays, which include transport, meals, accommodation and entertainment. According to the Cruise Lines International Association, 58.0% of international holidaymakers are first-time cruisers and are likely to cruise in the coming years.
The COVID-19 pandemic has led to a decline in passenger numbers in the market. According to the International Cruise Lines International Association, global passenger numbers fell by 80.0% in 2020. The COVID-19 pandemic outbreak led to the suspension of most cruises in various locations, while other cruises were cancelled. However, the industry is expected to recover as operations will resume and restrictions will be eased. Following the pandemic, many holidaymakers are looking for a short break to relax.
A holiday trip of several days organized on board a cruise ship on large inland waters or at sea, visiting different tourist destinations following a fixed itinerary, is known as a cruise. The main focus of this type of cruise is on the on-board accommodation as well as on destinations attractive to tourists. The growing hospitality and tourism industry is fueling the growth of the market, thereby contributing to the growth of the global cruise market.
Ocean cruises dominate, but river cruises are also becoming popular
The market growth over the forecast period is driven by the increasing number of Gen Z leisure trips and travel, and the growing share of the population preferring luxury living. The rise in popularity of river cruises is likely to fuel the growth of the global cruise industry. River cruises offer attractive travel packages that travel not only within coastal areas but also within countries. River cruises of this kind are becoming increasingly popular in European countries.
Nowadays, ships offer innovations and many exciting, extra fun activities and themed cruises for travelers, such as yoga themes, kids themes, mystery themes and more. Such innovations are gaining great popularity among the target audience and attracting different demographic groups, thus contributing to the development of the cruise market. However, the small number of companies involved in the production of such cruises and the high cost of production are expected to restrain the growth of the market during the forecast period.
In the ocean cruise segment, its revenue share exceeded 80.0% in 2022. The majority of the market revenue share is accounted for by strong players offering services in the ocean cruise segment for intercontinental voyages in large numbers. In addition, a large customer base prefers ocean cruises to other cruises due to their exciting packages, amenities and entertainment. These activities can be carried out on large ocean cruise ships, which provide spacious areas compared to others.
The river cruise segment is expected to experience the fastest growth rate, registering a CAGR of 13.6% between 2023 and 2030. The increase in popularity of river cruises among holidaymakers is associated with the highest CAGR. Unlike ocean cruises, which are docked in the coastal region due to their very large size, river cruises travel along rivers, offering more inland destinations and attractions. River cruises are becoming popular in European countries, sailing across different countries. For example, the Danube river offers cruises through 10 European countries.
North America dominates, but Asia and Europe will also grow
North America accounted for around 50.0% of revenues and dominated the market in 2022. The region’s dominance in the global market is mainly due to the strong presence of key international players and the most developed industry. Higher disposable incomes, consumer spending and a developed tourism industry are the factors driving the higher market revenue share.
Asia and the Pacific is expected to be the fastest growing region over the forecast period. The region is likely to register a CAGR of 12.5% between 2023 and 2030. In recent years, the cruise industry has been moving from North America and Europe to the Asia-Pacific region. The cruise industry is booming in the Asia-Pacific region thanks to government initiatives to develop the tourism industry to increase economic output. For example, on 19 August 2020, the Government of India announced that it will reduce 70.0% of berth fees to promote cruise tourism.
Europe was the second largest in terms of revenue share, with a share of around 25% in 2022. It is expected to grow at a significant CAGR over the forecast period. The growth of the market is attributed to the increase in demand for sustainable tourism. This growing demand is making local communities more attractive to small and medium sized tour operators, thereby fueling market growth.
Author: Rolands Petersons, logistics expert