PARIS — Not so long ago, we’d thought the pandemic had permanently sunk the cruise ship. But like air travel, the cruise industry is now confirming a sustained new cycle of growth.
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For shipowners, 2024 is set to be another record year after 2023, despite a complex economic outlook and a geopolitical situation in the Middle East that has consequences for traffic in the Mediterranean and the Red Sea — with attacks by the Houthi rebels. Yet the Cruise Lines International Association (CLIA) has even revised upward its traffic forecast for 2024 following a better-than-expected first quarter.
The organization expects global traffic to reach 35.7 million passengers — 1 million more than the initial forecast and 4 million more than in 2023. With 31.7 million passengers, the 2019 peak (29.7 million) had already been exceeded last year, due to unprecedented activity in North America and Europe, the two major cruise markets, with a slower recovery in Asia due to a late recovery in China.
Record passengers
“We were a little worried at the start of 2024, after a better-than-expected 2023. But the trend remains strong. In the first quarter, traffic was up 17% compared to 2019, and 15% in Europe, despite the fact that the first three months of the year are not traditionally a particularly buoyant period there,” says Marie-Caroline Laurent, Managing Director of CLIA’s European branch.
The health crisis has not been accompanied by cancellations.
France, Europe’s fifth-largest market, is part of this trend. “In Marseille, which accounts for 60% of departures from France, growth is in double figures,” says CLIA France President Erminio Eschena, who is also MSC Cruises Director of Institutional Affairs and Industrial Relations.
Eschena says that “the cruise industry’s ability to adapt” at a time when the war in Gaza has called into question stopovers and routes in the Mediterranean — as was the case during the Arab Spring. The Mediterranean accounts for almost half of European departures (around 46% of traffic last year, or 3.75 million passengers).
Rejuvenation
The success of these floating vacation villages that are these liners packed with activities for young and old alike is accompanied by a rejuvenation of a clientele that today is still associated solely with retirees. According to CLIA’s first-quarter statistics, the average age of a European cruise passenger is now 49, three years younger than in 2019.
The vitality of this “family” segment, which can be explained by attractive pricing, is just one illustration of a cruise market that is diversifying. While exploration cruises, offered by shipowners such as France’s Ponant and Norway’s Hurtigruten, remain dynamic, international hotel groups are making inroads into a luxury segment with a more intimate approach, resulting in smaller ships that are also on the cutting edge in terms of environmental protection.
Accor is rolling out its ultra-luxury Orient-Express brand with backing from LVMH, the world’s leading luxury goods industry (and owner of Les Echos). Initially, the French hospitality company will have two liners with hybrid propulsion that combines sail and liquefied natural gas. These 53-suite ships are due to be delivered in the second quarter of 2026 and during 2027 by Chantiers de l’Atlantique, from whom Ritz-Carlton, the American luxury hotel company, has already placed an order for two superyachts.
The Canadian hotel group Four Seasons has also adopted the small-capacity luxury yacht model. Scheduled to set sail at the end of 2025, the first of the two yachts to be built by Italy’s Fincantieri will feature 95 suites, and will be 207 meters long (more than twice the length of a football field).
Major investments
As a further illustration of the expansion of luxury cruise territory, the MSC shipping group has decided to create a second cruise line, Explora Journeys, dedicated specifically to this market segment. These luxury projects are partly fuelling the shipyards’ workload.
While 445 cruise ships are currently in operation, 71 are scheduled for delivery by 2036, at a cost of more than 50 billion euros. 34 of these ships will carry between 100 and 1,000 passengers, and 22 at least 4,000 passengers.
The bigger it is, the more profitable it is.
This shows that the very large ships have not disappeared with the health crisis. With orders still to be fulfilled, CLIA members’ share of the fleet of liners with more than 4,000 passengers is even set to rise from 12% to 15% by 2028, with the share of ships fewer than 1,000 passengers, the largest segment, contracting by one point to 34%.
“The health crisis has not been accompanied by cancellations,” notes François Cadiou, head of the Paris branch of shipbroker BRS Brokers, who emphasizes the economic relevance of large liners, saying “the bigger it is, the more profitable it is.”
“There’s a lot of talk about the race for gigantism in the cruise industry, but the biggest liners are just over 360 meters long, a far cry from the 400-meter length of the largest container ships,” observes Cadiou, who was once an engineer at Chantiers de l’Atlantique.
Monsters of the seas
Chantiers de l’Atlantique’s delivery of the Utopia of the Seas to the American company Royal Caribbean Cruises at the end of June has symbolic value. This monster of the seas, capable of carrying more than 7,000 passengers, is the largest cruise ship in the world alongside its twin, Wonders of the Seas.
In February, the world’s second-largest cruise company — after the British and American cruise operator Carnival — confirmed an order with the shipyard for a seventh member of the Oasis class family, which includes these two mega-ships. Its first unit, the Oasis of the Seas (with a maximum of 6,780 passengers), was commissioned at the end of 2009. This is another example of how the large, highly segmented leisure market is continuing to follow its own irresistible path by acquiring giants of the seas.
Yet times are changing, as companies face complex environmental challenges. The Utopia of the Seas, the first liner in the Oasis class to feature LNG propulsion, demonstrates this willingness to adapt.
