Cruise Convention 2007: Mediterranean to overtake US cruise market in 10 years – 24 May 2007

UK Cruise Convention 2007

The Mediterranean is set to overtake the US to become the number one cruise market in the world within 10 years, one of the industry’s most respected experts has claimed.

MSC Cruises’ US chief executive and president Rick Sasso, who has 35 years’ experience in the business, said: “The growth of cruising in Europe, and the fact that it has the highest-yielding cruise tickets in the world, is encouraging the cruiselines to bring more tonnage over here.”

US cruiselines started to expand into Europe and the Med at the beginning of this decade, but pulled their ships out after the US terrorism attacks on September 11 2001, on the assumption that the Americans would stop flying.

The cruiselines have all come back, with increased capacity, and Sasso claims a similar event now would result in a different response.

“I have no doubt this market is now strong enough to withstand another 9/11,” he said.

He added: “Last year was difficult with the fighting in Iraq, hurricanes in the Caribbean and the economy, but the cruise industry still grew and prospered, and it will continue to grow and prosper while there are people out there with vision and investment.”

Sasso, who helped set up Celebrity Cruises almost 20 years ago, came out of retirement three years ago to work for MSC Cruises in the US. He said: “The old world has become the new world for cruising. Europe will grow faster than the US because it has a golden pot of ports and destinations, and some of the most historical places on the planet.

“The US managed to become the biggest cruise market in the world without that. We just have the Caribbean, where one island is much like another.”

He told delegates that fears of overcapacity in the market were unfounded, describing how the concept of the “cruise vacation” did not exist 40 years ago but was created by visionaries who saw that air travel would end demand for transatlantic crossings.

Sasso said: “There were two ships sailing to the Caribbean from Florida in the 1970s and then a third was launched. The same questions came then as now: ‘Is there room for more capacity?’

“It was the same in the 1980s when new capacity came on, and when we launched Celebrity Cruises in 1990. The critics always ask the same question.”

He added: “Now there are 31 ships on order, for delivery over the next three years. Can we handle the capacity? You bet we can. We have only just touched the tip of the iceberg. We can’t build ships fast enough.”

Cunard president and managing director Carol Marlow said: “Even with all the new ships to come, demand is ahead of supply. The only cap on growth is providing the capacity.”

ACE business development manager Andy Harmer said the fact cruising took off in such a big way in the US, which does not have a package holiday market tradition, should be very encouraging for UK agents.

“If it can grow like the cruise industry in the US, where the package holiday market is very small, there is huge potential here,” said Harmer.

Facts and Figures

  • Despite its huge popularity in the US, much of the market is still untapped. Only 15% of Americans have taken a cruise.
  • In the UK, cruising accounts for less than 3% of the total overseas holiday market.
  • Fewer than 2% of all Britons cruise annually.
  • Passenger Shipping Association figures show the number of Britons taking a cruise grew 12% last year to 1.2 million, and they are forecast to rise to 1.3 million in 2007 and 1.5 million in 2008
  • Of the total number of Brits who took a cruise last year, 452,000 – equal to four out of every 10 passengers – cruised in the Mediterranean, either sailing from the UK or on a flycruise, a massive increase on 2005’s 370,000.
  • In the UK, there are 6,000 members of the Association of Cruise Experts.
  • There will be 37 new ships delivered between now and 2012.
  • Eight ships have been launched this year already.

Focus on sale, not the price says MSC chief exec, Rick Sasso

UK agents will continue to have a vital role to play in the growth of cruising, but they must talk about their itineraries and the facilities on the ships rather than focus on price.

MSC Cruises US president and chief executive officer Rick Sasso said: “The cruising season in the Mediterranean used to be May to October. Now it is year-round, which means there are more opportunities for agents to sell.

“In addition, people in the UK get more vacation time, so they have more time to take a cruise.

“In the US in the 1980s, cruiselines brought in 0800 numbers but people still booked through agents. Now just 5% of consumers book online. They are still booking through the trade.

“There are great opportunities for ACE agents. You guys are in for one hell of a ride”.

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