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Cruises - UK - October 2013

“In a broader holiday market dominated by comparison websites and dictated by value for money, cruising is an industry where first impressions really do count. Mintel’s finding that roughly a third of sea cruisers are not interested in taking another suggests that the industry has a long way to go in leaving a positive impression on passengers and encouraging repeat business.”

– Harry Segal, Research Analyst

Some questions answered in this report include:

  • What is the chief barrier to growth in the sea cruise market?
  • What are the long-term impacts of the Costa Concordia sinking?
  • How important is branding in the cruise market?
  • How have increasing air fares affected the sea cruise market?

The UK sea cruise market has performed well throughout the recession, and has enjoyed year-on-year growth in passenger numbers since 2004. However, volume growth has slowed from 11% in 2008 to just 0.1% in 2012 and penetration remains low.

Some 62% of UK adults have never taken a sea cruise and have no interest in doing so. The challenges for cruise lines and agents lie in shifting negative perceptions such as bad value for money and high costs, and making the wider population aware of increasingly accessible products such as mini-cruises.
This report examines sea and river cruises taken by UK residents and forecasts how the sea cruise market will perform over the next five years. It explores the challenges and opportunities that operators will face in 2013/14 and investigates the core drivers behind changes in the market. The report also examines consumer attitudes towards cruises and highlights key innovations in the market. 

Definition

This report examines the market for sea and river cruise holidays taken by UK residents. A holiday must include a stay of at least one night, where the purpose of travel is primarily for leisure, as opposed to business or visiting friends or relatives.

A cruise is defined as any sea-based or river-based tour taken by fare payers on board a vessel whose main purpose is the accommodation of guests (this definition may be expanded to include Arctic and Antarctic exploration cruises where the vessel plays a multipurpose role – eg research vessel and cruise ship).

An adult, for the purposes of Mintel’s research, is anyone aged 16 or over.

The standard travel and tourism definitions used in the terminology of this report are as follows:

Tourism is any travel, which involves an overnight stay away from home.

A holiday is a subjectively defined form of tourism, as defined by the tourist in response to surveys such as the IPS. A holiday can be distinguished from other leisure travel such as visits to friends and relatives (VFR) or shopping trips.

Short-haul refers to air holidays within Europe, dominated by flights to Mediterranean resorts. The following destinations are considered to be short-haul: Austria, Belgium, Bulgaria, Croatia, Cyprus EU, Cyprus Non-EU, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Irish Republic, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and Other Europe.
The Canaries are included as a part of the Spanish market, and Madeira and the Azores are included as part of the Portuguese market.

An inclusive tour, or package holiday, is defined as the simultaneous sale of at least two elements of a holiday to the traveller: fares on public transport (eg flights) and commercial accommodation (eg hotel or self-catering apartment). Other elements, such as meals or excursions, are not essential to the definition of an inclusive tour.The term ‘all-inclusive’ is used to describe a special type of resort holiday in which food, drink, excursions and other services are provided as part of the total holiday cost.

An independent holiday is one in which the traveller organises and books transport and accommodation from separate sources (eg a Channel ferry crossing and a caravan site in France).

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Growth has slowed, but passenger numbers are up 19% against 2008
                • The market is set to surpass the two million passenger mark in 2018
                  • Figure 1: UK sea cruise market volume, 2008-18
                • Sea cruise market value will increase 19% to £2.8 billion in 2018
                  • Figure 2: UK sea cruise market value, 2008-18
                • Market factors
                  • 2013 bonus commissions follow the base rate reductions of 2011/12
                    • Costa Concordia salvage places the disaster back in the spotlight
                      • Companies look to LNG to meet rising fuel costs and emissions regulations
                        • New ships to add 20,000 passenger capacity in 2014
                          • Floods, strikes and civil strife disrupt the river cruise market
                            • Market share
                              • Royal Caribbean International and Carnival dominate the market
                                • Figure 3: Global market share of top 10 operators, by passenger capacity, March 2013
                              • The consumer
                                • A third of those who have cruised are not interested in taking another
                                  • Figure 4: Sea and river cruises taken, July 2013
                                • Cruise line’s websites are the first port of call for researching a trip
                                  • Figure 5: Research methods, July 2013
                                • Perceptions of value vastly differ between cruise takers and non-cruisers
                                  • Figure 6: Attitudes towards sea and river cruises, July 2013
                                • Just 6% of potential sea cruise takers are interested in transatlantic cruises
                                  • Figure 7: Future sea cruise destinations, July 2013
                                • Half of prospective sea cruisers cite money as a barrier to entry
                                  • Figure 8: Reasons for not having taken a sea cruise, July 2013
                                • Perceptions of high cost, claustrophobia and seasickness dampen demand
                                  • Figure 9: Reasons for no interest in sea cruises, July 2013
                                • What we think
                                • Issues in the Market

                                    • What is the chief barrier to growth in the sea cruise market?
                                      • What are the long-term impacts of the Costa Concordia sinking?
                                        • How important is branding in the cruise market?
                                          • How have increasing air fares affected the sea cruise market?
                                          • Trend Application

                                              • Trend: Nouveau Poor
                                                • Trend: Fauxthenticity
                                                  • Mintel Futures: Generation Next
                                                  • Market Drivers

                                                    • Key points
                                                      • 2013 bonus commissions follow the base rate reductions of 2011/12
                                                        • Costa Concordia salvage places the disaster back in the spotlight
                                                          • Companies look to LNG to meet rising fuel costs and emissions regulations
                                                            • Figure 10: Europe Brent Spot Price FOB, Jan 2000-June 2013
                                                          • New ships to add 20,000 passenger capacity in 2014
                                                            • Figure 11: New ships on order/optioned worldwide, 2012-16
                                                          • Floods, strikes and civil strife disrupt the river cruise market
                                                            • Competition in the European river cruise market heats up
                                                            • Who’s Innovating

                                                              • Key points
                                                                • Crystal Cruises’ Wine and Food voyage to showcase local ingredients
                                                                  • Celebrity Cruises seeks to differentiate with craft cocktails
                                                                    • SeaDream also adds some culinary innovation with a raw food menu
                                                                      • Norwegian Cruise Lines launched a flash deals mobile app
                                                                        • Windstar Cruises launched new ‘Grand Prix of Monaco’ package
                                                                          • Project Orient plans to launch Southampton-Sydney route
                                                                            • Royal Caribbean’s Quantum class to boast two industry firsts
                                                                            • Market Size and Forecast

                                                                              • Key points
                                                                                • Growth has slowed, but passenger numbers are up 19% against 2008
                                                                                  • Figure 12: UK sea cruise market volume and value, 2004-18
                                                                                • The market is set to surpass the two million passenger mark in 2018
                                                                                  • Figure 13: UK sea cruise market volume, 2008-18
                                                                                • Sea cruise market value will increase 19% to £2.8 billion in 2018
                                                                                  • Figure 14: UK sea cruise market value, 2008-18
                                                                                • Forecast methodology
                                                                                • Segment Performance

                                                                                  • Key points
                                                                                    • The Northern Europe region has grown to seize a 26% market share
                                                                                      • Figure 15: UK sea cruise market, by destination, 2008-12
                                                                                    • Fly Cruises contracted 8% in 2012, but still account for 53% of the market
                                                                                      • Figure 16: UK sea cruise market, port departures vs fly cruises, 2008-12
                                                                                    • Ultra-luxury cruises have consistently outperformed the market
                                                                                      • Figure 17: Ultra-luxury sea cruise market vs total sea cruise market, annual % change, by passenger volume, 2009-12
                                                                                    • Egyptian unrest continues to depress the non-European river market
                                                                                      • Figure 18: UK river cruise market, by destination, by passenger volume, 2009-12
                                                                                  • Market Share

                                                                                    • Key points
                                                                                      • Royal Caribbean International and Carnival dominate the market
                                                                                        • Figure 19: Global market share of top 10 operators, by passenger capacity, March 2013
                                                                                      • Carnival Corporation holds a 48% share of the market, by capacity
                                                                                        • Figure 20: Global market share of parent companies, by passenger capacity, March 2013
                                                                                    • Companies and Products

                                                                                        • Carnival Corporation
                                                                                          • Financial performance
                                                                                            • Figure 21: Carnival Corporation key financials, 2011-12
                                                                                          • Carnival Cruise Lines
                                                                                            • Background
                                                                                              • Recent activity
                                                                                                • Princess Cruises
                                                                                                  • Background
                                                                                                    • Recent activity
                                                                                                      • Costa Cruises
                                                                                                        • Background
                                                                                                          • Recent activity
                                                                                                            • Holland America
                                                                                                              • Background
                                                                                                                • Recent activity
                                                                                                                  • Royal Caribbean Cruises Ltd
                                                                                                                    • Financial performance
                                                                                                                      • Figure 22: Royal Caribbean Cruises Ltd key financials 2011-12
                                                                                                                    • Royal Caribbean International
                                                                                                                      • Background
                                                                                                                        • Recent activity
                                                                                                                          • Celebrity Cruises
                                                                                                                            • Background
                                                                                                                              • Recent activity
                                                                                                                                • MSC Cruises
                                                                                                                                  • Background
                                                                                                                                    • Financial performance
                                                                                                                                      • Figure 23: MSC Cruises key financials 2011-12
                                                                                                                                    • Recent activity
                                                                                                                                      • Hurtigruten
                                                                                                                                        • Background
                                                                                                                                          • Financial performance
                                                                                                                                            • Figure 24: Hurtigruten Group key financials 2011-12
                                                                                                                                          • Recent activity
                                                                                                                                            • Viking River Cruises
                                                                                                                                              • Background
                                                                                                                                                • Financial performance
                                                                                                                                                  • Figure 25: Viking River Cruises key financials 2011-12
                                                                                                                                                • Recent activity
                                                                                                                                                • Brand Communication and Promotion

                                                                                                                                                  • Key points
                                                                                                                                                    • Carnival Corp’s share of advertising spend increased from 18% to 28%
                                                                                                                                                      • Figure 26: Top 10 cruise advertisers, by holding company, 2012-13
                                                                                                                                                    • P&O increases its ad spend to seize 13% market share and pole position
                                                                                                                                                      • Figure 27: Top 20 cruise advertisers, by brand, 2012-13
                                                                                                                                                    • Ad spend is shifting from direct mail to TV
                                                                                                                                                      • Figure 28: Cruise advertising expenditure, by media type, 2012-13
                                                                                                                                                  • Sea and River Cruises Taken

                                                                                                                                                    • Key points
                                                                                                                                                      • A third of those who have cruised are not interested in taking another
                                                                                                                                                        • Figure 29: Sea and river cruises taken, July 2013
                                                                                                                                                      • Over-55s are the most likely to have cruised, but interest is high for all ages
                                                                                                                                                      • Research Methods Used

                                                                                                                                                        • Key points
                                                                                                                                                          • Cruise line’s websites are the first port of call for researching a trip
                                                                                                                                                            • Figure 30: Research methods, July 2013
                                                                                                                                                          • Human interaction is more valued for cruises than other holiday types
                                                                                                                                                          • Attitudes towards Sea and River Cruises

                                                                                                                                                            • Key points
                                                                                                                                                              • Exploration is a key driver behind interest in cruises
                                                                                                                                                                • Figure 31: Attitudes towards sea and river cruises, July 2013
                                                                                                                                                              • There is an opportunity for brands to adopt a greener position
                                                                                                                                                                • Perceptions of value vastly differ between cruise takers and non-cruisers
                                                                                                                                                                  • There is a demand for mini, cruise-and-stay river cruise products
                                                                                                                                                                    • Negative media coverage has failed to impact consumer sentiment
                                                                                                                                                                      • Cruise lines need to offer greater price transparency
                                                                                                                                                                      • Future Sea Cruise Destinations

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Just 6% of potential sea cruise takers are interested in transatlantic cruises
                                                                                                                                                                            • Figure 32: Future sea cruise destinations, July 2013
                                                                                                                                                                          • The Caribbean, South America and Australasia appeal most to under-35s
                                                                                                                                                                            • There is a demand for cruise-and-stay to destinations outside Europe
                                                                                                                                                                            • Reasons for Not Having Taken a Sea Cruise

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Half of prospective sea cruisers cite money as a barrier to entry
                                                                                                                                                                                  • Figure 33: Reasons for not having taken a sea cruise, July 2013
                                                                                                                                                                                • Over a quarter of prospective cruisers just have not got round to it yet
                                                                                                                                                                                • Reasons for No Interest in Sea Cruises

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • Perceptions of high cost, claustrophobia and seasickness dampen demand
                                                                                                                                                                                      • Figure 34: Reasons for no interest in sea cruises, July 2013
                                                                                                                                                                                    • Concern over other passengers is not a key driver behind disinterest
                                                                                                                                                                                    • Appendix – Market Share

                                                                                                                                                                                        • Figure 35: Number of vessels and passenger capacity, by operator, March 2013
                                                                                                                                                                                        • Figure 36: Number of vessels and passenger capacity, by parent company, March 2013
                                                                                                                                                                                    • Appendix – Sea and River Cruises Taken

                                                                                                                                                                                        • Figure 37: Sea and river cruises taken, July 2013
                                                                                                                                                                                        • Figure 38: Sea and river cruises taken, by demographics, July 2013
                                                                                                                                                                                        • Figure 39: Sea and river cruises taken, by demographics (continued), July 2013
                                                                                                                                                                                        • Figure 40: Sea cruises taken, by demographics, July 2013
                                                                                                                                                                                        • Figure 41: River cruises taken, by demographics, July 2013
                                                                                                                                                                                    • Appendix – Research Methods Used

                                                                                                                                                                                        • Figure 42: Research methods, July 2013
                                                                                                                                                                                        • Figure 43: Research methods, by sea and river cruises taken, July 2013
                                                                                                                                                                                        • Figure 44: Research methods, by demographics, July 2013
                                                                                                                                                                                        • Figure 45: Research methods, by demographics (continued), July 2013
                                                                                                                                                                                    • Appendix – Attitudes towards Sea and River Cruises

                                                                                                                                                                                        • Figure 46: Attitudes towards sea and river cruises, July 2013
                                                                                                                                                                                        • Figure 47: Attitudes towards sea and river cruises, by sea and river cruises taken, July 2013
                                                                                                                                                                                        • Figure 48: Attitudes towards sea and river cruises, by demographics, July 2013
                                                                                                                                                                                        • Figure 49: Attitudes towards sea and river cruises, by demographics (continued), July 2013
                                                                                                                                                                                    • Appendix – Future Sea Cruise Destinations

                                                                                                                                                                                        • Figure 50: Future sea cruise destinations, July 2013
                                                                                                                                                                                        • Figure 51: Future sea cruise destinations, by sea and river cruises taken, July 2013
                                                                                                                                                                                        • Figure 52: Future sea cruise destinations, by Attitudes towards sea and river cruises, July 2013
                                                                                                                                                                                        • Figure 53: Future sea cruise destinations, by demographics, July 2013
                                                                                                                                                                                        • Figure 54: Future sea cruise destinations, by demographics (continued), July 2013
                                                                                                                                                                                    • Appendix – Reasons for Not Having Taken a Sea Cruise

                                                                                                                                                                                        • Figure 55: Reasons for not having taken a sea cruise, July 2013
                                                                                                                                                                                        • Figure 56: Reasons for not having taken a sea cruise, by Attitudes towards sea and river cruises, July 2013
                                                                                                                                                                                        • Figure 57: Reasons for not having taken a sea cruise, by demographics, July 2013
                                                                                                                                                                                        • Figure 58: Reasons for not having taken a sea cruise, by demographics (continued), July 2013
                                                                                                                                                                                    • Appendix – Reasons for No Interest in Sea Cruises

                                                                                                                                                                                        • Figure 59: Reasons for no interest in sea cruises, July 2013
                                                                                                                                                                                        • Figure 60: Reasons for no interest in sea cruises, by Sea and river cruises taken, July 2013
                                                                                                                                                                                        • Figure 61: Reasons for no interest in sea cruises, by Attitudes towards sea and river cruises, July 2013
                                                                                                                                                                                        • Figure 62: Reasons for no interest in sea cruises, by Attitudes towards sea and river cruises (continued), July 2013
                                                                                                                                                                                        • Figure 63: Reasons for no interest in sea cruises, by demographics, July 2013
                                                                                                                                                                                        • Figure 64: Reasons for no interest in sea cruises, by demographics (continued), July 2013

                                                                                                                                                                                    Companies Covered

                                                                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                    Cruises - UK - October 2013

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