World Cruise Industry Review — Pt.2
The Major Economic Impacts of The Cruise Industry
Employment: The cruise industry directly employs a substantial number of people, with around 246,000 individuals employed in the North American cruise industry in the United States and Canada. This includes onboard positions, corporate offices, and call centers.
Direct Expenses and Jobs: The industry’s direct expenses in the United States totaled approximately $23.9 billion in 2018. This spending resulted in an estimated 172,326 direct jobs throughout the U.S. economy, with wages and salaries reaching $8.32 billion. These expenses include purchases of goods and services such as food, beverages, fuel, insurance, and business services.
Indirect Jobs: The cruise industry’s impact extends beyond direct employment, creating a domino effect of indirect jobs. These include businesses that provide services to the industry, such as port services, transportation, suppliers, manufacturers, and real estate. The exact number of indirect jobs is not specified.
Travel Agents: The cruise industry is a significant source of business for U.S.-based travel agents, with approximately 78,800 agents relying on cruise-related activities in 2018.
Passenger and Crew Spending: Passengers and crew members contribute to the economy through their spending. In 2018, cruise passengers spent $4.67 billion in the United States. Specific figures for crew member spending are not provided, but it is implied that their spending also contributes to the economy.
Local Economies: The cruise industry’s economic impact extends to the cities and states that serve as homeports or receive cruise ship visits. For example, in Seattle, cruise ship passengers spend around $467 million annually on hotels, restaurants, and related goods and services. Similarly, each cruise ship call in Los Angeles adds an estimated $1 million to the local economy.
Alaska Case Study: Alaska, a destination heavily dependent on cruise visitors, experiences significant economic impacts. Direct spending by crew members accounted for $22 million in 2017, while direct cruise line spending and payroll accounted for $297 million. The industry also makes direct payments to the state, including significant contributions from the commercial passenger vessel tax.
https://cruising.org/-/media/Facts-and-Resources/CLIA_Economic-Impact-Factsheet_June-2020_Global
The Major Trends in the U.S. Cruise Industry
Resilience and Pent-up Demand: Despite the challenges posed by COVID-19, the cruise industry has shown resilience, with pent-up demand leading to a rebound in cruise bookings. According to a survey, a significant percentage of respondents expressed their intention to take a cruise within the next year, indicating a strong recovery for the industry.
Demand for Bucket-List Destinations: Travelers are increasingly seeking out their dream destinations, with a renewed propensity to experience and explore new places. Cruising offers a compelling value proposition for these travelers, as it allows them to unpack once and wake up to a new destination every day. This trend highlights the desire for immersive travel experiences and the opportunity to visit multiple bucket-list destinations in a single trip.
Sustainability and ESG Focus: The cruise industry, like many others, is acknowledging the importance of sustainability and environmental responsibility. Travelers are increasingly concerned about the impact of their journeys on the planet and communities they visit. Cruise lines are striving for progress in terms of environmental, social, and governance practices, not just in the infrastructure of travel (such as cruise ships) but throughout the entire travel experience. Innovations and efforts to share sustainable practices are expected as the industry continues to prioritize responsible destination partnerships.
Evolving Wellness Experiences: Wellness has become a top priority for travelers, especially in light of the pandemic. The definition of well-being has expanded beyond traditional spa treatments to encompass holistic experiences that focus on mind, body, and spirit. Cruise lines are integrating wellness into their guest experiences, offering design features that promote relaxation, leveraging the restorative power of the ocean, and providing wellness-focused activities, spa treatments, and culinary experiences. Simplifying transactions for guests also contributes to their overall well-being during the cruise journey.
These trends highlight the changing preferences and priorities of cruise travelers in the United States. The industry is adapting by offering unique and meaningful experiences, emphasizing sustainability, and prioritizing the well-being of guests. By addressing these trends, cruise lines can meet the evolving needs of travelers and provide memorable and responsible travel experiences.
Reference Links:
https://www.cruisebooking.com/articles/cruise-tips-and-tricks/cruise-trends-2021
Loyalty Programmes and Their Significance in The Cruise Line Industry
Loyalty programs in the cruise line industry are designed to reward and retain customers who repeatedly choose to sail with a particular cruise company. These programs offer a range of benefits and incentives to encourage customers to continue booking cruises with the same company. The significance of loyalty programs in the cruise line industry lies in their ability to enhance customer satisfaction, foster brand loyalty, and drive repeat bookings.
Loyalty programs play a crucial role in improving the brand image of cruise companies. Loyal customers tend to share positive experiences and recommend the brand to others, which can attract new customers and expand the customer base. These programs also help in creating a sense of trust and satisfaction among customers, leading to stronger relationships between customers and the cruise company.
By offering rewards, discounts, and exclusive privileges, loyalty programs incentivize customers to choose the same cruise line for their future trips. Customers earn points based on their past purchases, such as the number of nights stayed on a cruise, which can be redeemed for various benefits. These benefits may include special offers, booking discounts, complimentary dining, free internet access, member-only events, priority services, and more.
However, it is essential for cruise companies to ensure that the quality of their services and products remains high in order to retain loyal customers. If customers are dissatisfied with the level of service they receive or if the company fails to deliver on the promised rewards, it can lead to frustration and potential customer churn. Therefore, cruise companies should continuously monitor and improve their loyalty programs based on customer feedback and preferences.
In summary, loyalty programs in the cruise line industry are instrumental in building customer loyalty, improving brand image, and driving repeat bookings. By offering rewards, discounts, and exclusive privileges, these programs incentivize customers to choose a specific cruise line for their future trips.
Reference Links:
https://customerengagementmanagementintourism.wordpress.com/2020/07/09/the-reality-of-loyalty-program-in-cruise-line/
https://www.annexcloud.com/blog/5-top-examples-well-designed-cruise-loyalty-program/
“Cruise Line International Association” (CLIA) and Its Role in The Cruise Industry
The Cruise Lines International Association (CLIA) is a prominent trade association representing the global cruise industry. Its primary objective is to serve as a collective voice for cruise lines, travel agents, and related businesses. CLIA plays a crucial role in advocating for the industry’s interests, promoting safety and sustainability, and improving the overall cruise experience for both passengers and crew members.
One of CLIA’s key functions is to establish and uphold high standards within the cruise industry. It formulates policies, guidelines, and best practices to ensure the safety and well-being of everyone involved in cruising. By working closely with regulatory authorities and other stakeholders, CLIA helps develop and implement industry-wide safety protocols and environmental initiatives. This collaborative approach aims to enhance the industry’s reputation and maintain its commitment to responsible and sustainable practices.
Another significant aspect of CLIA’s role is to provide a platform for education and training. The association offers valuable resources and programs designed to keep travel agents and industry professionals informed about the latest developments, trends, and best practices. By fostering knowledge and expertise, CLIA strives to enhance the professionalism and service quality of its members, ultimately benefiting cruise passengers and the industry as a whole.
In addition, CLIA actively engages with governments, policymakers, and the media to shape public perception and advocate for policies that support the cruise industry’s growth and sustainability. By highlighting the economic impact, job creation, and positive community contributions of the cruise industry, CLIA aims to foster a favorable environment for continued development and expansion.
In summary, CLIA plays a pivotal role in representing and supporting the cruise industry. Through its advocacy, safety initiatives, educational programs, and engagement with various stakeholders, CLIA helps ensure the industry’s growth, sustainability, and ongoing commitment to delivering exceptional cruise experiences.
Reference Links:
https://cruiselowdown.com/blog/How-Sustainable-Is-cruising-today
https://www.globenewswire.com/en/news-release/2019/09/26/1921562/0/en/Cruise-Lines-International-Association-CLIA-Celebrates-Women-Leaders-in-the-Cruise-Industry-on-World-Maritime-Day.html
Kubilay Tokbay
