Clearly, there is room for significant fleet expansion within the luxury sector, yet Seabourn and Regent Seven Seas Cruises are the only two luxury cruise lines with new ships on order for 2016…
The luxury segment of the cruise industry has always been its smallest, accounting for just 1.5% of the total 21.3-miilion passengers carried in 2014.
The five cruise lines that traditionally define the luxury sector of the cruise market (Crystal, Hapag-Lloyd, Regent, Seabourn and Silversea) have a combined capacity of 295,000 passengers.
This does not include smaller brands such as Ponant and SeaDream, or the contemporary cruise lines that offer top end suites that cost as much and deliver many of the same services and amenities.
These contemporary lines include Norwegian Cruise Line, MSC Cruises, Celebrity Cruises and the premium brands such as Princess, Holland America Line and of course the iconic Cunard Line. Celebrity Cruises is included because they recently announced that they would introduce a new “Suite Class” experience in 2015.
These larger lines, however, do not represent a standalone luxury brand so are not included in our capacity figure. They do, however, suggest that the luxury segment of the industry needs to be better refined and exploited, as traditionally luxurious lines such as Seabourn and Silversea are clearly losing out to their contemporary competitors.
According to Ron Kurtz, president of the American Affluence Research Center (AARC), some 3.6-million of the more than 11-million North American cruise passengers last year are part of the ‘affluent’ class. “These are people with a household net worth of $800,000, as defined by the Federal Reserve Board, but basically one million or more,” Kurtz explained. “They represent 11.5 million households and the top 10 percent of all U.S. households.”
So there are a potential additional 7-million luxury cruise passengers that need to be enticed to take a high-end cruise, while the current number of high net-worth cruise passengers from North America alone is ten times larger than the total capacity of the world’s five main luxury cruise brands.
Clearly, there is room for significant fleet expansion within the luxury sector, yet Seabourn and Regent Seven Seas Cruises are the only two luxury cruise lines with new ships on order for 2016, compared to 16 new ships being built for contemporary and premium lines and due for launch between 2014 and 2016.
The 3-million potential luxury cruise passengers who are instead choosing contemporary or premium brands may be doing so because of the larger size of the ships in the Holland America and Cunard Line fleets, but the most likely explanation, in the opinion of Cruise Arabia & Africa, is that the fleet capacity is not there and so they’re forced to cruise elsewhere instead of with the top five.