Cruising is growing. 20.3 million passengers cruised in 2012—a 7% increase over 2010. This figure is expected to grow to 23.7 million within five years. 12.5 million were North American—heading primarily to Caribbean posts of call. Occupancy rates exceeded 103% demonstrating that demand outpaces supply.
Last year twelve new ships set sail with guest capacities ranging from 101 to 5,400 passengers.
By far, the most popular destination is the Caribbean accounting for nearly 42% of all bookings.
According to the Florida-Caribbean Cruise Association, “We enter an era distinguished by fourteen additional innovative, feature-rich ships; international ports-of-call; and convenient departures from proximal embarkation cities.”
Not only does demand exceed supply in the cruise industry as a whole, growth also supports peripheral markets at destinations where 17 million people descend upon multiple ports of call. These peripheral markets are more important to the cruisers than any of the amenities on their ships. 74% of potential cruisers regard “visiting multiple locations” as the primary reason for cruising. By comparison, onboard activities such as fine dining (62%), onboard activities (58%), romance (46%), and family fun (53%) are less significant.
The list of reasons to engage cruisers in off-board experiences is long when it comes to destination marketing at points of embarkation and ports of call. Not only do three quarters of all cruisers regard visiting new places as essential to a successful cruise, 70% of them experience these new locations for the first time and 50% return based on favorable first impressions.
Moreover, cruise ship “calls” generated an estimated $2.8 billion in direct spending by passengers, crews and cruise lines. In the Caribbean alone, services and opportunities at ports of call comprise 56,000 jobs.
Since so much money is involved, questions must surround whether peripheral markets can expand and whom these expansions will benefit. To answer these questions requires fundamental re-assessments of what constitutes a peripheral market to cruising and what technologies can reach it.
Traditionally, markets peripheral to cruising have been defined as economic activities at ports of call. There is no argument about the importance of these markets in terms of motivating people to cruise and their positive impacts on local economies.
The term “peripheral markets” has had less to do with activities and opportunities prior to or immediately following cruises. While there is little doubt that a lot of money changes hands before and/or after actual cruise events, the mechanisms for exploiting them are less readily defined or coordinated among the various operators and local destination marketers at points of purchase.
With this in mind, I would like to expand the definition of what constitutes peripheral marketing to cruising to include the economic impacts on the ports of departure in the days immediately prior to and after cruises. To do otherwise is foolhardy given that this niche is huge and easily exploitable using innovative and agile travel technologies.
I first got this idea after talking to a smart fellow who prints and deploys QR codes in Florida. What he said was this. In his area, thousands of pre-cruisers show up all the time looking for places to stay, things to eat and things to do during the time leading-up to their embarkation. Cruise operators and destination marketers must ask how they can satisfy this demand for a variety of reasons. In the case of operators and booking agents, the need relates to offering a wider range of more satisfying services to their customers. From the perspective of local destination marketers, the need surrounds bringing business to local merchants and introducing the destination as a place that demands further exploration beyond the cruise.
There can be no argument about the breadth of opportunity associated with pre-cruise markets. The point drives home when it is compared to traditional and more well defined opportunities at ports of call.
Average cruise passenger spending per port of call is between $97 and $193 depending on the port. While the port of call market is worked to death, a market at ports of departure remains largely disorganized despite it’s being more valuable in a hypothetical sense. Consider.
The average hotel price in Miami is $140. Given that cruisers spend approximately $1,770 per person per week as compared to $1,200 for non-cruisers, one might expect cruisers to spend more than the average on nightly lodgings prior to their departures. Add meals and cruise-related shopping to the mix and actual expenditures at the “port of departure” can easily exceed “port of call” expenditures by as much as 288%. Furthermore, these expenditures exclude “things to do” which would be added if the pre-cruiser arrives a day or two before he or she actually embarks.
What we’re talking about here is an enormous market of a type that is highly personalized and can only be responded to through targeted technology and creative solutions that include a confluence of mobile and QR stratagems.
To date, I know of no published study of this market niche. What is offered here is a first glimpse that deserves more in-depth investigation. As you review the graphic below, bear a few things in mind. This survey comprises 76 cruisers. It is confined to Caribbean cruising from east coast U.S. ports of departure. It also derives from surveys conducted through Facebook, LinkedIn and Twitter and may disenfranchise some older and less technologically sophisticated cruisers. Be that as it may, I believe strongly that survey opinions reflect an evolving marketing paradigm in all travel arenas.
When seen from the perspective of greatest good, this survey provides a rationale for affecting a synergy between the cruise industry and local destination marketers. If successful, it will form the basis for a re-evaluation of techniques as they relate to new directions in mobile applications, webs and social medias at ports of departure.
Certain things jump out from our sample and were doubled checked by phone calls to cruise operators and their booking agents.
Across the board, cruise lines and destination marketers fail to coordinate when it comes to pre-cruise logistical technologies related to air travel, hotel reservations, food and local tourism. While destination marketers do their part and cruise agents chip in, no one seems to have lifted the phone and said something like, “Hey, let’s work together and put QR codes in your pre-cruise packages that link to a mobile displays, maps, and/or coupons from local merchants.”
While most cruise lines and their agents offer help with travel and hotel bookings, most defer to local destinations when it comes to street level activities or commerce. The question is why? All stakeholders should be eager to target as many as 9 million pre-cruisers that arrive early, hungry, and eager for something to do.
To get the creative juices flowing—in order to develop collaborations among stakeholders toward technology solutions that addresses niche markets at ports of departure—I put dollar signs on the graphic below in all areas where technology can monetize the pre-departure niche market.
As Sherlock Holmes would say, “The game’s afoot.” Let’s cruise!!