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Catching the wave of the cruise industry

In a growing industry, Hospitality ON examined cruise lines and their strategies. In this dossier, discover the 10 brands with the largest guest capacity, the different types of customers and their expectations, as well as the areas most frequented by ships.


In an industry that is booming, which brands have the biggest fleets? (cf. table)

Looking at the TOP 10 biggest cruise brands, one thing is evident: American companies dominate this ranking and of the five biggest fleets only one is not American. With a fleet of 25 ships and 82,983 lower berths available for guests (at double occupancy), Royal Caribbean International is the brand with the biggest number of berths. Its group Royal Caribbean Cruise Line includes Celebrity Cruises, which is 9th in the ranking with 23,300 berths, and it also owns shares in TUI Cruises with 13,916 berths.

  Worldwide ranking of cruise brands, as of June 22, 2018

Second in the ranking is Carnival Cruise Line, which operates 26 ships and has a capacity of 72,530 guests. It is part of the cruise giant Carnival Corporation & plc which also includes the Italian Costa Crociere, Princess Cruises, AIDA, Holland America and P&O Cruises.
The two others groups in the ranking are the Hong Kong group Star Cruises, at the helm of Norwegian, and the Swiss group Mediterranean Shipping Company which operates the second biggest fleet of container vessels in the world and MSC Cruises, the 6th cruise company with 44,232 berths.

What kinds of fleets do these brands have? (cf. table)

To achieve economies of scale, cruise lines create classes of ships with similar designs. The current trend in the sector is seeing in the classes ships of ever-increasing tonnage in order to accommodate more passengers, who enjoy more services. In 2018, the Royal Caribbean International Symphony of the Seas is the largest cruise ship in the world and can accommodate up to 6,680 passengers. It is part of the Oasis Class and offers its customers services equivalent to resorts: 16 pools per ship, areas with artificial waves for surfing, mini-golf, skating rink... Parallel to the hotel business, the Venetian Las Vegas resort has 7,117 rooms & suites and 10 pools. In comparison to the Empress of the Seas, which was launched from the Atlantique de SaintNazaire shipyards (as was Symphony of the Seas) in 1989, the evolution of cruise ships is evident: it can host only 1,602 passengers and offers none of the afore-mentioned services.

  Ship amenities of the Royal Caribbean International

At the Global Lodging Forum 2018, Georges Azouze, CEO France for Costa Crociere, explained his group’s investments as follows: “A cruise liner currently costs between 500 million and 1 billion euros. In terms of logistics and maintenance, we feel it is necessary to stop the boat every 24 months for 15 days to repair it at the boat works.”


Cruise operators have two distinct strategies:

-Targeting a 100% occupancy rate. Revenues from ticket sales do not cover all the costs for operating the ship, so revenue is thus generated by customer spending at the casinos, restaurants, spas, clothing shops and other boutiques on board. The ships are thus designed so that every time a guest goes from their cabin to the dining room they pass in front a boutique. The brand AIDA, for example, offers cruises in the Caribbean for around 85 € per day for a full board package. This attractive pricing makes it easier for the German company to reach 100% occupancy rate.

-The other offers higher priced tickets for an exclusively upscale option on its smaller ships. For example, the French cruise company Ponant is positioned on the luxury market with ships of about 150 cabins and offers cruises in the Caribbean with rates from 500 € per day.

Who are cruise ship clientele?
Cruise ship clientele are predominantly American. Patrick Pourbaix, General Manager France, Belgium and Luxembourg at MSC Croisières, summarized the market at the 2018 Global Lodging Forum: ‘‘The number of cruise passengers has reached nearly 27 million per year, including 13 million Americans. The other half is the rest of the world. In Europe (7 million), Germany and the United Kingdom account for the largest share with nearly 2 million cruise passengers each. The French market still represents only 500,000 cruise passengers, we estimate the growth potential for the French market first, then the European and global markets.’’

  Where are passengers coming from? (In 2016, in millions)

What are the expectations of these different clientele?

American clientele represent more than 50% of the cruise industry market which has specific expectations. While Europeans consider cruise destinations to be the most important criterion in their decision, Americans consider the choice of ship to be the most important as the ship is their destination. Cruise lines are designing ships like the Harmony of the Seas, with ever more services and entertainment spaces.

To attract a specific customer segment, theme cruises have been developed. Among the most popular are trips for seniors with dietetic menus and ships better designed for wheelchair mobility. There are also cruises to celebrate the sounds of the ‘80s for middle-aged clientele and others with music for millennials.

As far as ship routing is concerned, a real ecosystem has been created in the Caribbean. In 2017, this region accounted for 35.4% of the cruise offer worldwide. American customers embarking from or to Florida ports discover a foreign port in the Caribbean. Only U.S.-flagged vessels can make voyages between U.S. ports. Cruise ships, most of which fly Panamanian, Bahamian or Maltese flags for tax purposes, must therefore establish a connection with a foreign destination from US ports. Worldwide ranking of the biggest ports in terms of number of passengers in 2016

The diversity and proximity of other countries in these waters allows the deployment of fleets to a variety of destinations. However, passengers do not necessarily discover these countries and their cultures because they make stopovers in resorts arranged by cruise lines. In the port of Cozumel (Mexico), which welcomed more than 3.6 million passengers in 2016, the island consists of catering areas designed for American customers. To evoke the history and culture of the place, the port has been decorated with sculptures that echo ancient Mayan civilization.
U.S. cruises in the Caribbean therefore focus on controlling the entire customer experience, from boarding in Florida to overseas stopovers, thus limiting misadventures for passengers and maximizing their spending with the cruise company. European clientele, which are rapidly developing, choose cruises in relation to the itineraries and stopovers offered. Companies operating in this segment present cruises as a more cultural product, with the trips being an opportunity to learn. In its future ship Smeralda (2,612 cabins), for example Costa Crociere will include a museum dedicated to Italian design: the CoDe (Costa Design Museum).

MSC Croisières, meanwhile, dedicates part of its website to the history of the cities its ships travel to.
Finally, cruises also have a large share of MICE customers that travel with them; at Costa Crociere this business represents 20 to 25% of the brand’s activity. As veritable floating resorts with flexible meeting rooms, theaters, accommodations, and restaurants with a capacity of several hundred people, cruise ships are equipped to welcome business customers. The American Royal Caribbean International thus highlights the fact that it can provide team building services on these liners thanks to the conference rooms and gaming rooms on these ships. 2017 cruise line deployment by region (ALBD)

Cruises: the next growth axis for hotel groups?

Could cruise ships, which may be likened to floating hotels for their lodging capacity become a growth axis for hotel groups? In an industry that aims to grow its supply in fashionable destinations and improve the customer experience, cruises fit these two criteria.

This is the bet made by the Marriott Group with its Ritz-Carlton Yacht Collection, which aims to operate three luxury vessels of 149 suites each by 2020. As it already has distribution and reservation centers as well as customer databases and qualified personnel to welcome passengers, the American group could very well adopt cruises as a new development axis.

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