Cruise Industry Overview – Executive Summary

The cruise industry is the most exciting growth category in the entire leisure market. Since 1990, the industry has had an average annual passenger growth rate of 7.2% per annum.

The cruise industry is young. From 1980 - 2009, over 176 million passengers have taken a deep-water cruise (2+ days). Of this number, 68% of the total passengers have been generated in the past 10 years. Forty percent of total passengers have been generated in the past five years alone.

The cruise market potential is strong. Over the next three years, over 50 million North Americans indicate intent to cruise. To date, approximately 20% of the U.S. population has ever cruised. By maintaining historical occupancy levels, the cruise industry will welcome 14.43 million guests in 2010.

The cruise product is incredibly diversified with literally a cruise vacation for everyone. Over the past 10 years, the industry has responded to extensive market and consumer research that has guided the addition of new destinations, new ship design concepts, new on-board/on-shore activities, new themes and new cruise lengths to reflect the changing vacation patterns of today’s market.

The cruise industry’s product delivers unparalleled customer satisfaction. Whether a frequent or first-time cruiser, the cruise experience consistently exceeds expectations on a wide range of important vacation attributes. On a comparative basis versus other vacation categories, cruising consistently receives top marks. The on-going challenge for our industry is to convert cruise prospects into new cruisers.

Cruising is an important vehicle for sampling destination areas to which passengers may return. 80% of cruise passengers agree that a cruise vacation is good way to sample destinations that they may wish to visit again on a land-based vacation. Nearly 40% of cruise vacationers state that they returned to vacation at a destination first visited by cruise.. Cruisers are not exclusively cruisers; rather they are frequent vacationers who cruise as part of their vacation mix.

The North American cruise market is strong across all 50 states and Canada. Today’s arrays of airlift options and
streamlined port processing have opened up cruising as a vacation alternative to more and more individuals. The addition of new North American embarkation ports provides cruise vacationers more options and opportunities to drive versus fly. In fact, 72% of Americans indicate that the convenience of over 30 “Close to Home” North American embarkation ports increases their likelihood to cruise within the next three years.

CLIA Member Lines capacity utilization/deployment. From a capacity standpoint, utilization is consistently over 100%. In
2009 the CLIA industry occupancy rate was 103.9%. For 2010 the Caribbean and Bahamas represents the number one destination with 41.3% of capacity deployment. The Mediterranean, Europe, Alaska, and Mexico follow the Caribbean in popularity.

CLIA has become one of the largest and most influential travel industry associations. Today, it has 25 member lines and nearly 16,000 travel agency and individual agent members. It’s the largest association in terms of North American travel agency member representation.

The cruise industry has a very close working relationship with the travel agency community. A vast majority of cruise
passengers use the services of a travel agent to book their cruise vacations. Cruises are profitable to sell and generate a high repeat rate. The most successful and productive agencies are those that place a premium on selling cruises and training their personnel. CLIA provides a wide portfolio of travel agency training programs considered among the best in the travel industry including live classroom seminars, seminars at industry conferences and events, online training, DVD training and textbooks. The “Gold Standard” of CLIA training is the Certified Cruise Counsellor program where agents can earn the designation of Accredited (ACC), Master (MCC), Elite (ECC) and Elite Scholar (ECCS) designations. Travel agents earn these CLIA Certification designations via a structured program of mandatory and elective training, ship inspections, actual cruise experience and required cabin sales targets. A CLIA Certified Cruise Counsellor is the travelers’ best resource for cruise vacation planning. Two-thirds of all travelers consider professional designation/accreditation as a cruise expert to be extremely/very important – but, as expected, iseven more important to cruisers (75%) than non-cruiser/vacationers (56%) – particularly luxury (81%) cruisers.