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Cruise Industry Insights - Trends and Sector Developments with CLIA MD Andy Harmer

Cruise Insights - Trends and Sector developments with CLIA MD Andy Harmer

The hospitality industry is always evolving, and staying ahead of trends is crucial for success. In this episode, we explore this dynamic field with Simone Porto, a leading voice in travel and hospitality, and a seasoned consultant, writer, and start-up founder. We uncover strategies and insights that can help businesses thrive in today's competitive market. Plus - he offers insights from his recently published book, which paints a visionary picture of the industry's future through interviews with thought leaders.


Our chat with Simone Porto covers key aspects of the hospitality industry, including the latest trends, the impact of technology on guest experiences, and the importance of sustainability. Simone shares valuable advice on adapting to changing consumer habits and the role of innovation in driving growth.


One major takeaway is the importance of personalisation. Simone emphasises that businesses need to understand their customers and tailor services to meet individual preferences, which enhances the guest experience and builds loyalty. He also highlights the critical role of data in business decisions. Using data analytics can give businesses a competitive edge by helping them anticipate market trends and customer needs more accurately.


Another key point is the need for flexibility and embracing change. With the hospitality landscape constantly shifting, the ability to adapt and innovate is essential for success.

Our conversation with Simone Porto offers valuable insights for anyone in the hospitality industry. From personalisation to data-driven strategies, these lessons are crucial for businesses looking to succeed in a competitive environment. Join us as we continue to explore the world of travel and technology.


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Programme Notes


This episode has been automatically transcribed by AI, please excuse any typos or grammatical errors


Ryan Haynes (00:00:21) - Hello and welcome back to Travel Market Life. I'm your host, Ryan Haynes. And today's episode, we look at the cruise line industry with Andy Harmer, managing director of CLIA UK and Ireland. It's all about the latest research that comes from the Cruise Lines International Association, which shows that travellers from the UK and Ireland embarked on 2.3 million cruise vacations in 2023, exceeding the previous record, up from 1.7 million inches 2022. The Mediterranean remains a top choice for UK and Ireland cruise-goers, with 35% travelling there, followed by 29% in Northern Europe and 12% to the Caribbean. Among the top three destinations in 2023. Exploration destinations saw a significant 53% increase in passenger numbers, while the average age of cruisers also dropped to 55.1, with average cruise duration extended to 10.1 days and 28% of cruisers being part of larger, multi-generational groups. We'll be learning a bit more about the insights of this data from Andy throughout this interview.


Ryan Haynes (00:01:39) - Travel market life is backed by Haynes MarComs, a B2B marketing communications PR consultancy specializing in the technology, travel, hospitality and property sectors. Create meaningful connections and visibility to grow. Haynes MarComs cuts through the noise to resonate with target buyers, decision-makers and influencers. From contextualizing your mission to positioning your value proposition, Haynes MarComs helps you address the issues that matter. Marketing, PR, and social build profile. Gain momentum, and shape strategy with Haynes marcoms.


Ryan Haynes (00:02:23) - Thanks for joining us. Now you release some really fascinating data into the cruise industry and how that's been evolving really over the last year in particularly how that's been growing overall for the sector. And what is particularly interesting is the total number of cruises that I've taken has risen from 1.7 million inches in 2022 to 2.3 million inches in 2023. what does this mean for the industry and what are we expecting from 24?


Andy Harmer (00:02:50) - Yeah, we we so are. So our data looks back on the previous year. So this is 2023 data. And what we do is we collect all of that data directly from the cruise line so that we can have that verified.


Andy Harmer (00:03:00) - And it's I think it summarizes what we all felt 2023 was like, which was a bit of a moment for the cruise industry. So, you know, our recovery from our years of, of, Covid was quicker than we thought. we knew that the British public loved to take a cruise holiday and that they would be keen to get on board as quickly as possible again, once we restarted operations, I think we have seen a significant increase in the number of people who are trying a cruise for the first time, and that's reflected in those figures. So not only is it a big increase in 2022, but it's also a big increase in our last biggest year, which was 2019 when we were just around the 2 million figure. and some of that is because we're capacity-led. So actually, we've seen an increase in the number of ships being launched over the last three years, but that's managed growth of about 3.4% each year. but a lot of it is the fact that the British and Irish are trying a cruise for the first time.


Andy Harmer (00:04:01) - And I'd love to say that's happened very quickly, but actually, it's probably been 150 years in the making in that, you know, we've always been a great nation for maritime. our interest in cruising has grown over the past 5 to 10 years, but we really have seen that rapidly increase, since 2019. and after the Covid years, we're really enjoying that moment of people trying to cruise for the first time, because of course, most people, once they have a cruise once, will cruise again. So that gives us a good opportunity and a good start for 2024 and beyond as well.


Ryan Haynes (00:04:35) - I mean, I know that 20 2021 was a pinnacle year for cruise to be able to introduce so many new people to that sector. And there was a bit of a fear that you might see a massive drop off. But, looking at these numbers, we are seeing that people are picking up that cruise again for a second, third and fourth time.


Andy Harmer (00:04:52) - Yeah, I think it's it looks like it's that sustained growth.


Andy Harmer (00:04:56) - And as you say, it's difficult to capture some of the trends in one year's data. But the data seems to be supporting what we're hearing, which is that from our travel agent partners particularly, who play a pivotal role in the distribution of cruise holidays. They are telling us that people are certainly switching to cruise. I think there are a number of reasons for that. I think, firstly, we're perceived very much as offering great value for money. we are one of the most inclusive holiday types that you can take, and I think value and the value proposition have really grown and developed over the past couple of years. But I think secondly, people people try to cruise maybe in the summer of 2021 when there were very few other options. So we had lots of ships sailing around the UK waters in summer 21. And so I think that attracted an audience that maybe we wouldn't have reached before. but then we've had that ongoing investment by the cruise industry and new ships and new features, new dining, new entertainment, etc. across their existing fleet.


Andy Harmer (00:05:55) - That really means that we've been listening to our customers. We've been listening to the guest's feedback. We've created holidays that are incredibly desirable, taking people to amazing places, and all at great value for money. So I think as a value proposition and as a holiday choice, we've certainly seen in 2023 figures that that that message is getting through and that we're attracting a record audience.


Ryan Haynes (00:06:20) - Now let's deep dive into some of the other numbers that you've got here. And this is really around sort of the booking patterns and interest of your cruises. To date exploration destinations saw a significant increase, 53% in passenger numbers. Can you tell me what exploration destinations are and what this tells us about the market at the moment?


Andy Harmer (00:06:42) - Yeah, it's a really interesting start actually. So we knew that we'd seen lots of interest in expedition growing. And I think people are looking at bucket list destinations. They're looking at places that maybe they thought that they would like to travel to, but they've now made the decision that they will travel to expedition cruising is one of those holiday choices where we take guests to the Arctic, to Antarctica, to places like the Galapagos, to Borneo, to the Kimberley region of Australia, etc.


Andy Harmer (00:07:11) - So these are incredible places. and we have genuinely seen an interest in demand for that. But we've also seen, again, investment by the cruise industry in ships that can take our guests. There and there are certain types of ships. But that investment means that we now have that increased capacity to take people there. So I think we are therefore seeing that translate into numbers. those figures don't tell the total expedition story, because actually expedition ships can go to places that aren't necessarily aligned with expedition cruising. So actually some of them sail in Europe, some of them are in places like Scotland, for example, which won't show up in those figures. But we have seen that interest. And I think it's it's interest that comes from the destinations themselves, the wildlife, the scenery, that sense of being off the beaten track, but also that sense of travelling with very like-minded people, which again, has always been an appeal of cruising. So these ships generally take around 200 to 300 guests. So they're smaller.


Andy Harmer (00:08:09) - they have a smaller guest number on board. And as I say, like-minded people travel to amazing places. And that's the increase that we've seen.


Ryan Haynes (00:08:17) - Now, one of the other interesting aspects is the demographics. Now, we know the boomer generation has a lot of disposable income. They're looking at a lot more focus on cruises and being able to tick off a lot of these bucket list destinations. However, the age of cruises is dropping from 55.1 years to 56.1. while it's just a year, is it a big thing for the industry? What does it mean in the grand scheme of things?


Andy Harmer (00:08:45) - And it is a big thing, but it is a big thing for the industry. So down to one of its lowest levels for as long as I can remember, actually. And I think it reflects the fact that, again, the cruise industry has focused on increasing the demographics that would be interested in taking a cruise holiday. so one of the changes that we've seen over the past ten years in shipbuilding is that we've been able to build slightly bigger ships if we want to.


Andy Harmer (00:09:10) - and that allows the cruise lines to then put on board those ships more entertainment venues, more dining, more activities, more family facilities. So at certain types of years on certain types of ships, they will attract families and younger cruisers. we have said for the past couple of years that there is a cruise for everyone. And I think this, this development, this opportunity to take families and younger couples onto our cruisers would change slightly the demographic of Brits who take a cruise. so it is, as you say, just one year and it does bring it down slightly, but I think it does reflect the ability of the industry to attract younger couples and families. But I think there's slightly more to it than that, in that the industry actually is geared up, regardless of age, for everybody. and so actually in the UK, we have one of the oldest average age of cruisers in the world. we have a brand specifically for people over 50, for example, that sells.


Andy Harmer (00:10:05) - So there is that, that mix. But I think we'll see that continue to ebb and flow. But actually, you know, we have an ageing population in the UK. We may not see that average age come down very much, in the next few years, but I think it does reflect that slight shift in our appeal.


Ryan Haynes (00:10:21) - I mean, this is the average age. So you've got a lot older and people who are a lot younger, which is obviously, as you say, fantastic. Even if the age is getting the population's age is getting older for as long I guess this average age hasn't changed much. You are covering a wider span of demographics, which is very exciting. And I guess tapping into that and you do sort of like adhere to this. Just a mention, you did make reference to this just now about the ship builds and how that's diversification. Diversifying that 28% of cruisers are part of this larger multi-generation group. And we're seeing much more of a sort of group travel across generations now.


Ryan Haynes (00:11:01) - And, from your research that, three or more age categories are part of those multi-generational groups, why is it becoming popular? and you know, what particular developments that are really attracting the younger generations?


Andy Harmer (00:11:16) - Yeah, it's a great question, actually. We saw that change in, appeal to multi-generational groups sort of in 2022, and we wondered whether it would be temporary. We wondered whether that was a reflection of the fact that for a couple of years, we weren't able to travel or spend as much time as we would want with our wider family. So therefore that may have led to everyone cruising together in multi-generational groups in 2022. But actually, we've seen that even strengthened further in 2023. and I think, yes, as you say, some of that refers to the fact that the cruise industry now appeals to multi-age groups that appeal to a much wider demographic. And I think the unique thing about the cruise industry and the cruise holiday is that during the day, people can go off safely on the ship and do their own thing.


Andy Harmer (00:12:02) - and then they can come together for lunch and dinner, talk about their day, have an evening or an afternoon together, and really share the moment while still having the opportunity to create the holiday that they want. The same is true in destination. So when the ship is in port again, we have family-focused excursions, or we have excursions that would appeal to different age groups or of course, the guests. And can debug and explore as a group themselves. So I think much of it is down to that product development. I also think, you know, we talk a lot about age, but actually one of the shifts we've seen separate to age is actually the mentality of our guests. Because even if you're an older guest, actually that spirit of adventure, that spirit, to go to multiple destinations, to do lots of different things, to go off the beaten track continues to be a thing that we know our guests like to do. And I think, again, that helps us to appeal to that wider demographic and is wonderful.


Ryan Haynes (00:12:57) - now, I mean, there are so many more other insights, and you can get those insights by looking at the description in the podcast. But, Andy, are there any other insights from the report that you'd like to highlight that are particularly fascinating and interesting to you?


Andy Harmer (00:13:11) - Yeah, I think destination is always the interesting thing for me for cruise, you know, one of the one of the real reasons that people take a cruise is that chance to visit multiple destinations in one holiday, unpack only once, let the cruise ship do the hard work. And actually, the most dramatic thing about our favourite destinations hasn't changed at all over the past ten years. So we love the Mediterranean. We know that that's always been our number one cruise destination. It's the chance to visit multiple countries, you know, generally good weather. Certainly, that choice of experience in the destinations as well, whether you want it as a city break or a beach, vacation or, you know, to try some of the vineyards or to do some of those cultural experiences that are on offer.


Andy Harmer (00:13:54) - So Mediterranean has always been number one as long as I've been in the industry, and it continues to be so. So the appeal of the med is great and great to see. Northern Europe is our second favourite. And that's, you know, certainly the UK, Iceland, the Norwegian coast etc.. So those haven't changed really. But I and I think that's great. I think that's reassuring that the industry is focused on the right areas in the world, but also shows, again, that the diversity of destinations is a really important part of our increased demand this last year.


Ryan Haynes (00:14:25) - Now looking also at some of the, I guess, behavioural data and, and some of the feedback you get from travellers, there's a bit of a love-hate relationship with cruising, isn't there? why is that, do you think and do you feel that you're sort of breaking down some of these perceptions?


Andy Harmer (00:14:42) - Yeah, it's a good question actually. We've had the same, I think, misconceptions for again, as long as I've been in the industry, I think I think people are more open to taking a cruise holiday now than maybe they were five, ten years ago.


Andy Harmer (00:14:54) - And I think that's reflected in all of the research that I've seen. And I think that's a testament to the hard work that's done both by the cruise lines but also by travel agent partners in talking about the cruise experience in a way that holidaymakers are open to, and actually the percentage of people open to cruising, is higher now than it has been for some time. which means that they are listening, that they do understand more about the cruise experience, because of course, for those people who've never cruised before, they probably don't know what the cruise experience offers, what that destination experience offers, and so on. But I do. So yeah, that sentiment has shifted. But we still have some work to do. We know that we still have some work to do as an industry to explain our story, to tell the story of the cruise, to explain that value, but also to really talk to those generations or to those holidaymakers who haven't considered it yet. I think the good start is once people have tried a cruise, they are overwhelmingly likely to cruise again.


Andy Harmer (00:15:54) - And I think that says a lot about the experience, but also the work that's done by the cruise lines once they're on board.


Ryan Haynes (00:15:59) - I mean, we do kind of see that they get these ships and they're getting bigger and bigger and bigger. But it's not just big ships that do cruise. It is also smaller fleets as well, isn't it?


Andy Harmer (00:16:09) - Yeah. Absolutely. Right. And I prefer big ships which I shouldn't, you know, shouldn't keep talking about our big ships. They make up about a third of all of our global fleet. a third are in our mid-sized ship range. And then a third, some of the smaller ships, like the expedition ships that I spoke about. So we are actually in a place where the global cruise fleet is all fairly well balanced. And actually, some guests love our bigger ships. It gives them more choices, and more options during the day and in the evening. And some people love our smaller ships. You know, those small ships that are able to get into places that some of the bigger ships aren't and will continue to build ships in all different categories, going to all different destinations so that we can continue to offer a great holiday to many, many people.


Ryan Haynes (00:16:52) - I was going to say this because we are seeing cruise capacity in the fleets increase. how is this forecast to change over the coming years? just so that we can get an idea as to the options that are available to us?


Andy Harmer (00:17:03) - Yeah, absolutely. So we continue to grow, as you say. And actually, that investment in new ships continued even during the pandemic. But we are seeing growth. Our growth is around 3 to 5% each year. So it's very managed growth. It's it's it's very much about planning for the future. we have. shipyards in Europe that build the majority of ships. They can only create and build so many ships in a year. So that keeps our capacity growth down. But what it does mean is that in the next 4 or 5 years, we'll be closer to 40 million globally taking a cruise holiday, which would be a record. But of course, we take them to all corners of the planet on ships of all different shapes and sizes. So, you know, we continue that growth and investment, but it is very much managed and a very small percentage each year.


Ryan Haynes (00:17:54) - All right. Now, as a boating or ship enthusiast and Andy, you must be, new ships coming to market. Are there any that you're particularly excited about?


Andy Harmer (00:18:04) - Oh, that's a.


Andy Harmer (00:18:04) - Very difficult question. I love them all equally, of course, but I think, so this year in the UK, for example, we have Queen Anne joining. I guess we should be excited about that. It's the first new Cunard ship in 14 years. They have up to four ships operating now, which is something they haven't done for a good long time. It's always great to see a ship that's really focused on the UK market. Of course, international guests as well. But you know, we have a great love of Cunard as a brand in the UK, so that'll be very exciting. But actually, there are lots of new ships coming, including some of the smaller ones, for example for explorer journeys, very much in that ultra-luxury. Mark, we've already seen the Icon of the Seas, launch and, operate for the first time by Royal Caribbean, which is the biggest cruise ship afloat.


Andy Harmer (00:18:50) - So lots of choice coming, lots of new ships coming. And actually, it's always very exciting to see a new ship coming because they'll be the most up-to-date. But what a lot of people don't realize is actually, even the existing fleet is refurbished every three, 4 or 5 years. So that investment continues even in the existing fleet to bring them up to spec. And that's reflected, I think, again, in how customers repeat.


Ryan Haynes (00:19:14) - Tell us about CLIA. What is the organization all about?


Andy Harmer (00:19:18) - So we're Cruise Lines International Association. So we work with around 55 cruise lines around the world, who operate the vast majority of the ships in the world. which is why I can't have a favourite ship or I can't have a favourite destination. But, and actually, what's great is they all offer something different, but we bring together the cruise lines in order that we can work together on things like sustainability. and in terms of safety and, and health and all of those things to keep that cruise industry, heading in the right direction.


Andy Harmer (00:19:50) - and then into that community, we bring ports and destinations, we bring travel agents, and really we create a community that supports, that supports each other with, that learns from each other, and that does business with each other. So we do events. We do. We offer travel agents resources. We bring our cruise lines together to discuss some of the issues I spoke about. and so we do a lot of work, both from a promotional perspective, but also actually working with governments, working with health authorities, working with, each other to kind of learn and develop and keep leading the way.


Ryan Haynes (00:20:24) - And how can you become a member?


Andy Harmer (00:20:26) - So as a if you're a travel agent partner, then details on our website cruising.org. But if if you're interested in joining as a non-travel agent, then there are contact details on our website where you can contact us and we will send you details.


Ryan Haynes (00:20:39) - And at the end of May, this month you have the CLIA conference. Yeah. This is something that happens, I believe, every year.


Ryan Haynes (00:20:47) - tell us about that and what people can expect from that.


Andy Harmer (00:20:50) - Yes. It's a it's a great event. We started it in Dover. I know Port of Dover in about 2007. And it has developed and grown. And essentially it brings together our UK travel agent audience, plus, travel agents from Ireland and across Europe. We bring travel agents together to meet with our cruise lines for a day of conference and inspirational speakers to understand the opportunities and the trends and things that are coming, plus the networking opportunities that provide. And then actually, our travel agent partners get a real opportunity to see some of the products. So they'll get ship visits on a couple of those days as well, to see some of the great ships that sail in and out of Southampton. So it's a great coming together. Actually, this year it will be our biggest will be around eight 5900 delegates, descending on Southampton, and coming away hopefully invigorated and inspired and ready to keep growing our industry in a safe and sustainable way.


Ryan Haynes (00:21:48) - That's absolutely excellent, Andy, thank you ever so much for those insights today. Really appreciate you taking the time to join us here on Travel Market Life.


Andy Harmer (00:21:55) - Thank you very much.

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