Topical research into the post-COVID cruise market

As part of its investigations taken on behalf of a consortia of advisors to the Tobago House if Assembly (we reported in Nov 22), HPC carried out the market analysis to assist in assessing passenger shipping regeneration at the Port of Scarborough on the island of Tobago. It is hoped that attracting additional cruise passenger visits to a level in excess of those pre-pandemic, will play a fundamental role in the economic development of the capital city Scarborough, and in that of the island as a whole.

In this respect one encouraging result of the research carried out late in 2022 showed that the Caribbean/Bahamas/Bermuda region remains firmly the number one cruising destination globally. The others making up the top three cruising destinations, together representing 66% of the market are Asia/China and the western Mediterranean. 

Perhaps less predictable are the research’s findings on the age demographic of ‘cruisers’ of which there are nearly 30 million each year.  The findings show that the age bracket of 20 to 59 accounted for 52% of all passengers with an average age of 47.  This somewhat belies the popular belief that retirees make up the majority; the actual proportion of over 60’s is actually 33%. 

As regards the region or origin for these passengers, HPC’s investigations found that in the three years 2016-2019 around 88% of the source market was made up of a combination of North America, Western Europe and Asia, with North America (comprising USA, Canada and Mexico) contributing over half the market. The dynamics of how these source markets fluctuate in their demand for cruises are clearly impacted by the economic prospects in each region, or in some instances sub-regions.

Based on these source markets’ economic Variations cruise operators typically develop itineraries for their vessels based on the convenience of departure ports, the attractiveness of way-ports or stop-over destinations and again, the connectivity of the final port of call. The operators’ costs and profitability are, of course significant considerations, which are weighed against the price options offered in the various source market regions and the standards of accommodation offered.

Chief among the criteria for operators in designing their itineraries the research found were:

  • Island/destination visitor appeal: availability of shore excursion options
  • Port Infrastructure and efficiencies in vessel handling, berthing and passenger transfers
  • Home port flight connectivity to/from source markets
  • Operator itinerary profitability: overall operating costs

The COVID-19 pandemic of course had devastating effects on the cruise industry and the estimated economic activity losses amounted to some US$77 billion globally (CLIA international –2022*). However, the industry has strenuously implemented protocols to address and mitigate any on-going effects of Covid and 2023/4 is forecast to meet and in some regions exceed pre-pandemic passenger levels.

For the future, HPC underlines that the industry must also continue to collaborate with local communities to balance the needs of destinations, mitigate over-tourism, maintain the visitor experience and operate in pursuit of Net Carbon Neutral Cruising by 2050.

HPC has the expertise to support cruise industry stakeholders ranging from port and state tourism authorities, cruise line operators and those seeking guidance in expanding and developing their strategic cruise ambitions.

Sources: *Cruise Lines International Association (CLIA), 2021 & 2022 State of the Cruise Industry Outlook
Interviews with various Cruise operators