SALES AND SPENDING OUTLOOKS

Transcription

1 TRVEL GET CRUE DUTRY OUTLOOK U E L R E C T O E T R C T O L O TRVEL GET MEMBER PERPECTVE FEBRURY 2016

2 Perhaps no one is better attuned to trends in the travel and leisure industry than travel agents. Travel agents are working with consumers and travel providers every day, which gives them a uniquely valuable perspective on the near-term travel outlook. s a result, it s significant that travel agents are bullish about the cruise business in n a CL survey conducted at the end of 2015, merican travel agents said they expect to see notable growth in the number of cruises people take in 2016 as well as increases in passenger spending. 1

3 While travel agents generally believe that overall trends will be up for 2016, they do not expect growth to be consistent across all geographic segments or price categories. pecifically, the cost and hassle of air travel seems to be discouraging consumers from committing to international ports and destinations in favor of domestic and U..-based cruises, especially in laska and the Caribbean. Travel agents also see growth in all core cruise segments. Further demonstrating consumer enthusiasm for cruises, travel agents say that passengers are booking further ahead than in the past, with the strongest growth seen in pre-booking nine-to-twelve months ahead. Travel agents have consistently told us that, when consumers take cruises for the first time, they quickly become apostles for cruising in general, said CL acting CEO Cindy D oust. This survey affirms that the cruise industry is poised for growth among families, who are the future of cruising, and among travelers who are interested in convenience and the return on experience that cruising offers. We thank the travel agents who participated in this survey, which provides important insight on cruise trends. 2

4 LE D PEDG OUTLOOK Travel agents overwhelmingly agree that the outlook for cruise travel in 2016 is strong. Eighty-three percent said they expect increases in sales volume in the coming year. More than two out of five travel agents expect sales volume to increase by ten percent or better and one-fifth expect volume increases of six to ten percent. Only four percent expect a decrease in cruise bookings in Families, couples and individuals who may not have considered cruising before are now taking note that it is not all about shuffleboard and old people, said travel agent abrina Kraft. They are discovering the full extent of the activities offered both onboard and in the ports. They are discovering the great value of the cruise vacation. ndividuals who are now being introduced to cruising are finding that it fulfills so many of their wants and needs without breaking the bank. imilarly, travel agents are anticipating that consumers will increase their spending on cruises this year. eventy-seven percent said they believe cruise consumers will spend more in 2016, with nearly a third expecting increases in the one to five percent range. bout a quarter predicted spending increases of more than ten percent. Overall, only three percent of agents estimated that consumer spending 3

5 on cruises would be down this year. Travel agents expectations of industry growth are consistent with the industry s own expectations. Between now and 2020, cruise lines are investing more than $25 billion to build 55 more ships. n 2016 alone, the industry will see 27 new builds. f, as travel agents seem to believe, the outlook for cruising is good, that demand should be met by a new generation of ships that will be introduced in the next four years. Describe Your gency s Outlook Regarding ts Cruise ales Volume in the Current Year Compared to that of the Previous Year % 21.5% 19% 12.4% 0 More than 10% Better 6 10% Better 1 5% Better Remain Flat o Change 2.5% 1 5% Worse 0.8% 0.8% 6 10% Worse More than 10% Worse How Would You Estimate the Cruise pending Behavior of your Clients in the Current Year? % 26.5% 19.8% 19.8% 0 More than 10% Better 6 10% Better 1 5% Better Remain Flat o Change 2.5% 1 5% Worse 0.8% 6 10% Worse 0.0% More than 10% Worse 4

6 VCTO TRED Consistent with travel agents expectations that sales volume and spending on cruises will increase in 2016 is their perception that, among all vacation segments, cruises are experiencing the greatest increase in booking and that house rentals and resorts without packages are showing the greatest decreases. When looking at the full landscape of vacation options, travel agents report that the two segments with the greatest increase in booking are ocean cruises (36%) and river cruises (28%). Only all-inclusive resorts (23%) rival cruises in their increased booking. f cruises are gaining in popularity, it might be because this is a more attractive option for families. s travel agent Karen helton says, More families are cruising and taking younger children. Families are looking for family-friendly cabin accommodations, activities that please all ages, as well as separate youth programming so the adults can have some free time. Travel agent perceptions about the changing nature of cruise demographics are borne out by research. Today s average cruiser is only 49 years old, employed full-time, married and has an income of $114,000. 5

7 f cruises are shaping up to be the winning vacation segments in 2016, then the biggest potential losers are house rentals (with 20% of travel agents expecting declines), resorts without packages (with 18% expecting declines) and land-based escorted tours (also with18% expecting declines). Only six percent of travel agents believe that ocean or river cruises will decrease in bookings. n Your View, Which Vacation egment is Experiencing the Greatest CREE in Booking? % 28.2% 22.6% 4.8% 0 Ocean Cruise River Cruise ll- nclusive Resort Land- Based Vacation 2.4% 2.4% House Rental Land- Based Escorted Tour 1.6% one of the bove 0.8% 0.8% Resort on- Package Resort Package 20 n Your View, Which Vacation egment is Experiencing the Greatest DECREE in Booking? 19.83% 18.18% 18.18% 14.88% 7.44% 5.79% 5.79% 5.79% 4.13% 0 House Rental Resort on- Package Land- Based Escorted Tour one of The bove ll- nclusvie Resort Ocean Cruise Land- Based Vacation River Cruise Resort Package 6

8 CRUE TRED lthough travel agents perceive that the overall outlook for cruises is strong, they don t expect to see growth across the board. With travelers growing increasingly price-conscious, the segments that are expected to see growth are mass market cruises (62% of travel agents anticipate some growth) and premium cruises (54%). Travel agent iko Yao Lim says that the trend that is most affecting his business is the consumers desire for deals and getting the lowest price possible with the best value..we ve also been seeing more customers wanting to embark on cruises in their own city and not want to take air to go on their cruise. 7

9 imilarly, there is uneven growth among the types of cruises that travel agents are booking. They report that river cruises and cruises on large ships are generating the biggest growth (with 71 percent and 66 percent respectively reporting growth in those segments). While few declines are anticipated in any segment, according to travel agents, growth is lowest among expedition vehicles and boutique or yacht cruises. n Your View, What is the Current Booking Growth Level of the Following Cruise egments? Large Mid-ize Boutique or Yachts River Cruise hips Mega hips Expedition Vessels Ocean Liners 0 100% ignificant Growth Growth Decrease ignificant Decrease 8

10 Travel agents are reporting that the cost and hassle of international flying is becoming a barrier to many long-distance cruise destinations. Consequently, domestic and local cruises are experiencing the most significant growth so far this year. Even though laskan cruises are one of the smallest segments of the industry, accounting for only 4 percent of total deployment, more travel agents (73%) are seeing increases in laskan cruises than any other region. The largest region for cruising, with a third of all cruises the Caribbean seems poised for even more growth in 2016, with 52 percent of travel agents seeing growth there. nother local region with strong growth in 2016 is Canada and ew England, with 42 percent of travel agents expecting growth. Travel gents were asked what Cruise Destinations are Experiencing the Most ignificant Booking Growth or Decline. Below represents the Travel gent responses. Growth teady Decline 9

11 nother trend that travel agents are reporting is that customers are booking their cruises further in advance. Forty-seven percent say that customers are increasingly booking nine to twelve months ahead and 42 percent say more cruises are being booked six to nine months in advance. ot surprisingly, last-minute deciders seem to be on the wane. third of travel agents report a decreasing number of cruises being booked in less than three months. How Far in dvance re Your Customers Booking Cruises Compared to a Year go? Less than 3 Months 3 6 Months 6 9 Months 9 12 Months Months 18+ Months 0 100% ncreasing taying the ame Decreasing 10

12 GECY TRED Like any modern industry the travel agency business continues to change. When asked an open-ended question about what trends are having the most impact on their businesses, the most frequently volunteered trend was an increase in groups and families (including multigenerational families) who are cruising together. This is having a positive impact on cruising as more and younger families discover cruise travel. ew ships, especially larger ships that offer all-inclusive pricing, seem to be having a positive impact on the demand for cruising. Travel agents have also noticed an increased interest in river cruising. 11

13 UMMRY s we begin 2016, the cruise industry is headed for growth, and travel agents are reinforcing this trend. Travel agents are anticipating increases in both the number of people who are cruising and the amount of money they spend on cruises. This supports Cruise Lines nternational ssociation s projected 2016 passenger number of 24 million people, up from 23 million in Looking long-term, the future of cruising is secure. s more multigenerational families embark on cruises, the cruise habit will become ingrained in younger consumers. This is important because retention rates are extremely high among travelers after they experience their first cruise. 12

14 U E L R E C T O E T R C T O L O CRUG.ORG 1201 F TREET W, UTE 250 WHGTO, DC