The cruise ship industry is the most exciting and fastest growing segment of the travel industry throughout the world today. Since 1988 the North American market has grown from 3.16 million to 7.99 million passengers in 2003 and cruise ship industry has maintain an average annual passenger growth rate of 8.1% per annum since 1980.
The rest of the world has seen also growth to 1.54 million passengers in 2003. This provides for a global 9.52 million passengers in 2003. In 2004, it is projected that there will be 10.60 million passengers worldwide. The worldwide cruise market is expected to carry more than 17.00 million passengers by 2010, representing a 70% increase since year 2000 and a 54% increase since year 2002.
The worldwide cruise ship industry is now valued at over $15.3 billion a year, with the North American market contributing approximately $11 billion, the UK 1.4 billion and the rest of the world $2.9 billion. The cruise industry generated almost 267,762 American jobs in 2001. Direct spending of cruise lines and passengers on U.S. goods and services is $11 billion a year. The total economic benefit in the U.S. in 2001 was $20 billion.
In the wake of 9/11, the Iraq War, and the continuing war on terrorism, the cruise industry has had the ability to maintain very high occupancy rates, remain profitable, deliver new capacity to the market, and meet the demands of a rapidly changing world.
The cruise industry's commitment to added capacity is based, in part, on the tremendous growth potential of cruising and is reflected in the significant increase in passenger capacity. During the 1980s some 40 new ships were built. In the 1990s, nearly 80 new ships made their debut. During the next five years, the cruise industry will introduce at least 35 new ships. Among these will be mega-liners that can accommodate more than 3,000 passengers as well as smaller, more intimate luxury vessels.
During 2004 twelve new cruise ships will be delivered to which represents an 8.5% net increase in global capacity and 10.5% increase in the North American market. Between 2000 and 2005, capacity in cruise industry will have grown by just over 40%. It is expected that between 2005 and 2010 that cruise lines will continue building new ships at a rapid rate to replace ships that will have to be withdrawn from service by 2010 (due to new International regulations) and at the same time will contribute another 25% increase in capacity during this period.
The cruise market is strong throughout the world and particularly in the USA and UK. Today's array of airlift options and streamlined port operations has opened up cruising as a vacation alternative to more and more individuals. The addition of new North American and European embarkation ports provides cruise vacationers more options and opportunities to drive versus fly.
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.
The cruise product is incredibly diversified with literally offering a cruise vacation to suite the desires of everyone. Over the past 10 years, the industry has responded to extensive market and consumer research: 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.
This phenomenal growth has fuelled the continuing evolution of the cruise industry product. Cruise companies have expanded itineraries to include more exotic ports of call and have introduced Homeland cruising in the USA by adding more US cities as embarkation ports, along with introducing more innovative onboard facilities, such as cyber-cafes, multiple themed restaurants and state-of-the-art meeting facilities, to name a few.
In consideration of the demands of a rapidly changing world, the demographics of the cruise market have equally changed. Traditionally, the cruise market was primarily made up of affluent retirees. Within the last fifteen years, the average age has dropped of those potential cruise customers with high disposable incomes in the North American, the U.K., and emerging European markets. All theses factors underpin the industry optimism that the cruise industry will maintain high occupancy rates and remain profitable into the future.
Cruise lines cater to a diverse demographic mix. More than 44 percent of all cruise passengers earn between $25,000 and $65,000 USD annually and the average age of cruise prospects is 43 years of age. Cruise vacations attract travellers from every province in Canada and every state in the USA. The European Cruise Market is lead by the UK, followed closely by the Germany, Italy, Spain and France.
The cruise ship industry is young. Since 1980, nearly 90 million passengers have taken a deep-water cruise of 2 or more days. Of this number, 62% of the total passengers have been generated in the past 10 years. Thirty seven 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 44 million North Americans indicated the intent to purchase a cruise. To date, only approximately 15% of the U.S. population has ever cruised. Europe has seen the cruise market double in sales since 1997 and is expect to have rapid and substantial growth over the next three years as the cruise lines target younger passengers along with in the introduction of new ships that will be dedicated to the European marketplace. The cruise industry association supports and assists in the development of the cruise industry.