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Ubiquitous Travelers, Germans Taking Cruise Ships in Record Numbers

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TUI Cruises' "Mein Schiff" at night on the Baltic Sea.
  • Why it matters

    Why it matters

    More and more Germans are choosing to go on holiday on cruises although these holidays are still more popular among U.S. and U.K. tourists.

  • Facts

    Facts

    • A record 20 million passengers went on a cruise in 2012 and the industry is growing faster than ever.
    • As the size of cruise ships grows, only four dockyards worldwide can build ships big enough to carry 2,500 passengers or more.
    • The average age of cruise ship travelers is falling as younger people are attracted to cruise holidays due to the entertainment available and new pricing models.
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    Audio

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Cruise ship holidays are enjoying a newfound popularity as more and younger travelers discover the pleasures of seaborne breaks.

For the first time, more Germans took an ocean trip this year, with 1.9 million travelers, displacing the British at the top of the list of cruise fans for the first time.

“The cruise industry is casting off its conservative image,” said Michael Ungerer, managing director of Aida, a cruise operator.

Across Europe, more and more people are choosing to go on cruises: in the last eight years, the number of cruise ship tourists in Europe doubled from 3.2 to 6.4 million.

Proportionally, the number of Germans who regularly take cruise trips is small with only 2.4 percent of the population going on a floating holiday every year, in comparison to 3.4 percent in the United States and 2.8 percent from the United Kingdom.

Globally, revenues are rising: this year, record revenues of $37.1 billion are expected, according to Cruise Lines International Association, an industry trade association.

U.S. travelers still dominate the market, with 11.7 million Americans going on a cruise in 2013, 5.3 million more than in Europe and 8.3 million more than the rest of the world.

But more Europeans are going on sea voyages and this trend will continue, said Gianni Onorato, managing director of MSC, a cruise provider based in Switzerland. In the past, people thought such holidays were boring, or for old people, or they feared seasickness. “Now, Europeans are becoming less prejudiced against cruise holidays,” he said.

For Mr. Onorato, that spells growth. More people live in Western Europe than in North America, but only half as many go on cruise holidays. “Plus, Europeans have 35 percent more holidays than Americans.” The market could double if Europeans changed the way they go on holiday, he said.

Cruise ship operators are benefitting from an aging society. At the same time, the average age of ship tourists is falling as providers attract younger people by focusing on entertainment and offering new pricing models.

“These days, ships are really floating hotels and they’re attracting a new kind of traveler, especially people between the ages of 35 and 55,” Mr. Onorato said.

Plus, cruises are becoming more affordable. “Operating costs are falling as the ships get larger,” Mr. Onorato said. Also, a broader range of price options.

As floating holidays become more popular, docks struggle to keep up with the rising demand for new vessels. “We had a hard time finding a shipyard for our new passenger ships,” said Fritz Joussen, chief executive of travel firm TUI.

The German cruise ship market is expected to grow by 42 percent more beds between 2013 and 2016, according to Bernd Stolzenberg, industry expert at CTC Cruise and Tourism Consulting. This is on top of a 49 percent increase over the last three years.

The growth of the market for ships is powered by a lucrative financing business. Operators seeking to buy a ship for €500 million only have to put down a fifth of the price initially and can finance the rest with loans, Mr. Joussen said.

Plus, operators accumulate cash as people buying cruise holidays tend to pay for their tickets long before the trip. According to industry sources, travelers book 180 to 200 days before departure and pay a fifth of the price of the ticket at that time.

“Even before construction of the ship “Mein Schiff 3” was finished, 70 percent of the cabins were booked,” said a spokesperson from TUI Cruises.  In the United States, the provider Viking requires passengers to pay 50 percent of their tickets in advance, a larger proportion than is allowed in Germany.

 

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One of TUI Cruises’ boats at Hamburg harbor in Germany. Source: DPA

 

The booming market for ships means that the dockyards building them are reaching capacity. The size of the new ships means that there are only four dockyards worldwide which can build ships large enough to host 2,500 travelers and more.

The growing number of travelers and ever larger ships is also causing difficulties at cities that are popular stopping places. “We’re seeing congestion in ports in North America, in the Mediterranean and the Caribbean,” said Mr. Ungerer.

There have been protests in Venice and Dubrovnik, where tourists are seen as a plague descending on the cities. Mr. Ungerer also leads the German section of Cruise Lines International Association and is looking at ways to address this problem.

“We should be able to avoid this by talking about our routes,” a TUI spokesperson said. “But so far, we haven’t done this enough.”

“The cruise industry is casting off its conservative image.”

Michael Ungerer, Managing Director, Aida

“But cruise tourists bring money to towns by going on excursions, staying in hotels and buying souvenirs,” Mr. Onorato said. “We shouldn’t forget that.”

MSC expects the number of passengers this year to rise to 1.7 million, up from 1.6 million last year.  “The industry is pretty crisis-resistant,” Mr. Onorato said.

The cruise business is expected to keep growing. Of the seven new ships MSC is planning to build, most will sail around Europe.

“But we want to use some of our new ships to strengthen our position in South America,” said Mr. Onorato. “And I can also imagine moving into the Chinese market.”

It seems the age of maritime exploration continues with the prospect of plenty more discoveries.

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