Archive for February, 2009

Cruise online search sees dramatic increase in January

Our monthly Cruise Search Index reflects change in cruise demand and online search market share. For the month of January 2009, U.S. online cruise search is estimated at 14.0 million monthly unique individuals. This represents an astounding increase of 47.8% versus last month and 15.0% versus the same month last year.  This seems an indication that the Internet has come of age for the cruise line industry, and the recent proliferation of cruise deals across the Internet and traditional media have prompted a lot of window shoppers.  This is good news for the cruise industry, as when the broader economy begins to stabilize the window shoppers will begin to convert to cruisers.

  % Change for January '09
  vs Last Year vs. Last Month
Total Internet Traffic 4.0% 0.6%
Total Cruise Search 15.0% 47.9%


Percentages in the charts below represent the approximate share of all online cruise traffic.

Chart 1 - % of traffic for top Cruise Lines from all cruise related traffic (click to enlarge)







Chart 2 - % of traffic for top booking sites from all cruise related traffic (click to enlarge)







Sources: Comscore, Google Analytics





Finding new passengers – keep the spa, toss the cruise.

Feb 8th I began blogging our “finding new passengers series,” focusing on the size of the spa market and its growth potential.  In this post I’d like to focus on the how.

First, let’s discuss the natural law of consumer attraction.  

  • cruise-spa-market-share-groIn order to bring the spa market to cruise, you must either create new first time spa users or take customers away from a different spa brand.  Either way, you need to be seen as a superior spa alternative.  As shown in the chart, if you demonstrate a “superior spa experience” for a competitive price you will draw away business from competition and gain market share.  This is the law of consumer attraction – over time consumer segments within a market niche will gravitate towards the superiorly branded and priced alternative.
  • How does the cruise industry create a “superior spa experience.”  I suggest we use the fact the ship is surrounded by water to our advantage.  About 60% of adult men’s bodies are water; babies are born at about 78%.  Therefore, the most holistic, natural and organic approach to healing should be surrounding oneself with the most abundant and natural element on earth.  We brand the fact we are placing the spa user in the best environment for the most true and honest spa experience.  
  • Here is the tough part to get over.  To a spa user, it’s not about the ship, it’s about the spa.  This may be a difficult concept for marketers inside the cruise industry to overcome – naturally we have been trained by repetition to focus on the ship.  It took billions to build; we put hearts and souls into it and rightly love it.  But think about it from a spa consumers view.  As an example, look at the luxury watch ads – is it about the watch (spa) or about the store that sells it (cruise line).  How about “To book an official AquaSpa experience today call 1-800-000-000.”  Is this approach different for a cruise line, yes.  Daring, definitely.  Effective?  Only if you want to create buzz and acquire customers from the spa segment.













  • I’d partner with a well-known spa “guru” to create a unique brand, branded treatment techniques and spa products related to the seawater, then launch it in media where spa goers thrive.  Furthermore tie in the ship menu, the shore side itineraries, the health club and on board activities (yoga instead of Vegas style show anyone?)

In summary:

1. Choose the target (destination spa users)

2. Brand the spa to be different and better (extraordinary, unique, new, trendy and the ultimate health experience due to natural healing of salt water treatments and peaceful, rejuvenating places).

3. Get the attention of the pod by taking your message to the alpha influencer

  • Get an already famous spa name to co-brand
  • Give spa writers and bloggers a free spa experience
  • Advertise the Spa (not the cruise) to the target (spa magazines, web sites, buy google spa related ad words). 
  • Price the spa in. Remember the target is buying a new type of destination spa package, not a cruise.

4. Finally, deliver on the promise (build it, do it, don’t fake it).  

Next week we will focus on some spa developments coming from the new cruise ships.

Cruise co-branded partnerships continue

August 20th, 2008 I blogged about the potential for cruise lines to co-brand and partner with land based destinations.  

cruise-lines-parntershipsThe concept isn’t new.  For example, Royal Caribbean joined with the Johnny Rockets restaurants chain on its cruise ships, including the Sovereign of the Seas.  It plans to have 12 by 2010.  

The latest deal to cross the wire is a partnership between Costa Cruises and Ryanair.   As a three-year deal, the Italian cruise line is exclusively featured on the Ryanair website with about 50 Ryanair routes that connect to Costa departure points. 

The partnership did raise the eyebrows of a number of UK travel agents, who have questioned the combination of Ryanair’s less than stellar consumer perception with Costa’s rather good one.

According to a Travelmole report, Costa UK managing director Marco Rosa stated its about increasing recognition for the cruise line to gain passengers.  “Our growth until 2012 is huge and everyone is growing capacity so the whole point is finding new passengers.”

Yes indeed.

Cruising toward retirement

Last week I heard an amazing story. Evelyn Thaw, a Delray Beach, Florida Cruises Inc. travel agent, shared with me one of her clients encountered and elderly lady onboard a recent cruise.  

That in of its self isn’t so amazing, what was striking was the lady was on her 87th cruise – in a row!  As it turns out, she continues booking 7 day cruises week after week because she finds it not only less expensive, but more socially engaging than moving into a retirement home.  She is living onboard!  At first, it was simply a story that illustrated cruises terrific value.  I was a bit slow to see it for what it really is - a marketing opportunity.  

alegria-cruise-shipWaterfront Lifestyles International wasn’t so slow.  Coming across my Cruise Industry Wire this morning was the story “Retire on a Cruise Ship? New Concept Creates Boutique Housing Idea for Florida's Seniors.”

The company has started taking reservations for retirement condos aboard the 300-foot Alegria.

The Alegria appears to be the 224 passenger Cape Cod Light from the old American Classic Voyages.  That ship, and her sister the Cape May Light, completed constructed by Jacksonville, Florida Atlantic Marine Inc. in 2001 for $38 million per vessel, the same year American Classic Voyages went bankrupt.   They were designed to resemble the classic coastal ships of the late 1800s.  The U.S. Maritime Administration sold both ships on June 18, 2008 for $9 million apiece to two Florida companies. Voyager Owner LLC bought the Cape May Light, and Discover Owner LLC bought the Cape Cod Light.  At least for a time, they appear to have been considered for use as coastal cruisers by American Coastal Voyages.  

Alegria has the amenities of the major cruise lines (minus perhaps pool and theatre) and you actually own 1/100 of the entire ship, not just a single condo unit. For less money than many senior independent-living facilities charge, retirees may now live on a cruise ship. Prices for individual condo cabins on range from $159,000 for a single room to a larger suite for $399,000.  In case you need a break from your neighbors, there is always subleasing.  No word on Freddie/Fannie financing.  

A monthly "Resident’s Care" fee is assessed each stateroom for the operation of the ship and all its expenses, including all meals port fees, the medical center, and housekeeping. Ownership also includes a golf and tennis membership at a nearby country club. Residents will only pay for cocktails, casino charges, spa fees, and purchases in the gift shop.

Alegria will make weekend cruises each month to regional attractions such as shuttle launches, shopping excursions to Palm Beach, and trips to the Bahamas, and once a year it will take a week long trip to Central America.

While the ship in Port Canaveral is the company's first vessel, it expects to locate additional retirement ships in Tampa, Jacksonville, Palm Beach, and Sarasota.

I think there is a viable niche market for this in the cruise business, particularly with the aging boomer population.  If the room sizes and business model of the Alegria specifically will appeal to enough retirees, we shall see.

Luxury Lapse

Recently gathered responses from over 300 randomly selected travel agents point to luxury cruise as the “least hot” of the cruise segments.

This is in contrast to previous speculation about economic recessions – the idea that “wealth would hold up.”  

In October, when the ugly face of the economic crisis was peaking out from around the corner, Cruise Market Watch predicted changes in consumer behavior, including “the new cool” among wealthy would be to “show restraint, not flaunt.”

Indeed "There's a sense of there being a gaucheness in spending in excess and coming home with a Louis Vuitton or Chanel bag," Lucyann Barry.

However, cruising on a luxury ship is hardly conspicuous, in fact the contrary.  It would seem the perfect place for wealthy to get-away and be able to enjoy a good pampering without worry about a reprimanding public (think auto executive jets to D.C. or bank CEO office remodeling).  

The luxury industry as a whole is predicting a difficult year.  Bain & Company estimates worldwide sales of luxury goods will decline from 3-7% from 2008.

Other luxury market reports include:

So what’s one to do?

Pricing: Upscale chains such as Saks Fifth Avenue and Neiman Marcus are stocking less merchandise to maintain some price integrity.  But luxury cruise lines don’t have the option to scale back inventory.  In fact, the segment is projected add ship capacity at a higher rate than the overall cruise industry.

So there are luxury cruise markdowns.  For example, Silversea offered 50% off a 7 day Mediterranean cruise departing Barcelona, Spain on May 14.  Seabourn offered 60% off it's 13 day Portugal Passage, leaving out of Fort Lauderdale to Lisbon March 18. 

Grow markets: Another strategy is to grow share in other geographic markets.  This may be part of the motivation behind Seabourn’s move  to operate year-round in Asia starting in 2010-2011.  By adding many new and exclusive ports of call, Seabourn will likely help attract unique port destination collectors. 

I have started a monthly series here about how to tap other non-geographic markets and believe those strategies are applicable.

Marketing Communications: Focus marketing on providing comfort, practical, grounded and authentic experiences.

Long-term luxury cruises are very secure.  Luxury – the seeking of the scare and extremely unique – is an innate a trait of human civilizations - from ancient Mesopotamia to central Mexico.  Those things aren’t likely to change.

Relax – Cruise lines can go after the spa business

In December, I posted Cruise Market Watch’s three New Year's resolutions.  One of which was to look at one specific market niche each month where cruise lines can increase penetration, grow market share and revenue.  This post is the first installment of that series.

Why look for opportunities to grow revenue from within the larger travel industry?

The cruise industry has only a 2% market share of the total vacation industry.  While ships are still going out full, the portion of repeat cruisers is up (i.e. former customers are taking advantage of the price discounts from what they paid last time).  But you can only increase past cruiser frequency so much.  That is not a sustainable model – there is a limit to the number of cruises one can take.

Nor is the best approach cannibalizing business from other cruise lines.  Or even worse, customers trading down within your own company brands from luxury to premium, or premium to contemporary.  And where will our industry be when fuel prices start to increase, severely limiting the ability to discount?

With more cruise ship capacity coming online, it is not why, but must.  Must prompt non-cruisers to try something different, of a greater perceived value than other related activities they are engaged in today.  Cruise lines have to change the game.

Ok, lets get to the meat.  Where and how?  The niche segment takeaway for the month is spa.  As the chart below illustrates, the more cruise lines can improve the perceived spa experience, the more they can enhance the price/value relationship relative to the competition, the more they will acquire share.

How much is out there?  The 18,100 spas in United States generate more annual revenue than ski resorts and nearly as much as movie box office receipts.  Of these, 77 percent are day spas, 8 percent are resort/hotel spas, 7 percent are club spas, 5 percent are destination spas, 3 percent are medical spas, 3 percent are mineral springs spas and just .3 percent are cruise ship spas.

  • The number of spa locations in the U.S. has grown at an annual average of 20% in the last eight years.

Spa Visits

  • There are more than 32 million active spa-goers
  • In 2007, there were 138 million spa visits
  • In 2006, there were 110 million spa visits


  • In 2007, $10.9 billion of revenue was generated by the U.S. spa industry
  • In 2006, $9.4 billion of revenue was generated by the U.S. spa industry

Got your attention?  My blog posts over the next several weeks will be about how to get the “spa pod” chirping. To wet your appetite: about 60% of adult men’s bodies are water; babies are born at about 78%. Its not a cruise’s spa, its a spa on a cruise and like our bodies it is in water 24/7 – seems like the most holistic, natural and organic approach to healing.

Source: International Spa Association


Cruise Market Watch revises downward cruise revenue estimates

The recently completed Cruise Pulse travel agent survey panel analyzed responses gathered January 24 - January 30, 2009 from 330 travel agents.  Findings provided insights into early wave season cruise booking trends.

Based on the analysis, Cruise Market Watch is revising 2009 worldwide revenue and passengers carried estimates.  Current projections are for worldwide revenue at $24.9 billion (down -9.5% vs. ’08) and total passengers carried at 16.0 million (+2.6% vs. ’08).

The economic impact of the recession is being felt in the cruise industry.  How did we get here? A least three former sources of travel and vacation spending have been impacted:

1) During the boom, as much as 10% of U.S. GDP was being generated from accessing home equity through refinancing.

2) Spending from an increasing number of employees who have lost their jobs is gone.

3) Among those with the ability to spend, heightened fear for their jobs and the feeling of significant wealth loss from dramatic declines in home values and stock portfolios have contributed to strong consumer fear and cutbacks in spending.

The new corporate motto is “stay alive until 2011 and you will be in heaven.”

Optimistically, due to the cruise value proposition relative to other vacation options, there is evidence of growing market share for cruise within the total travel market.  While revenues will be down, there will still be more passengers carried in 2009.  A large portion of this increase is by getting former cruisers to take another cruise at bargain prices.

The Cruise Pulse travel agent panel survey covers wave period booking trends, price discounting, cancellation levels, earnings impact and what cruise segments and destinations are heating up.

Both a full and sample versions of the Cruise Pulse survey panel are available on the website at