Posted By Cruise Market Watch ~ 12th February 2009
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:
- Audi’s Chief Executive Officer Rupert Stadler, when asked about the size of Audi’s sales drop this year, stated in a Bloomberg Television interview “We don’t know yet if it’s 5 percent, 10 percent or 20 percent.”
- British automaker Bentley, reports North America sales are off 32%.
- A survey by the National Association of Home Builders found that sales of homes priced more than $1 million fell 70%.
- In Colorado, Vail lodging occupancy is down over previous years and average luxury restaurants tabs have fallen.
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.