‘Cruises of the Future’
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With 24 million passengers, 27 new ship launches this year and order books full until 2020 – the outlook for the cruise industry looks exceptional – a perfect time to consider future customers.
The ABTA Travel Convention’s ‘Cruises of the Future’ workshop heard from Deloitte’s travel lead, Alistair Pritchard about the research he has carried out on future trends.
With sectoral growth of 9.9 % in 2015, cruising ranking 3rd in customers most preferred holidays and a third of all holiday makers having taken a cruise, the industry is booming.
However, Pritchard’s analysis suggests that the current intergenerational inequality, with younger people bearing the brunt of the financial crisis, could impact on future demand.
22-30 year olds typically spend 25% of their annual income on rent with many also having to manage student debt. Wealth of people in their thirties has halved in the last 5 years.
The fact is, people are unlikely to be as wealthy in future, with changes in pensions and parents supporting offspring for longer, at home, at university or through help to buy property. Having said this, younger people are more likely to spend their disposable income on experiences rather than savings.
Technology is clearly increasingly impacting in the travel market, with people more connected and increasingly attached to mobiles and wifi. 1 in 10 use their phone and a quarter use tablets, to book their holiday.
The customer base is also changing, with multi generational cruising becoming more popular. There are 1.5 million households with three plus generations and this will grow to 2.5 million by 2025.
People are increasingly demanding ethical cruising, with a concern about the impact of cruising on the world, both environmentally and culturally. There is also a rising demand for luxury.
One of the most important takeaways from this session for me was the fact that experience is becoming far more important to consumers, research showing it is 1.5 times more important than destination alone.
Pritchard’s conclusion was that despite substantial growth in recent years, the cruise industry must take account of the predicted changes in consumer behaviour. Recognising the greater focus on technology, the financial circumstances of the younger generation, and the need to improve diversity in terms of offering a range of products that combine destination and experience.
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