UK Cruise Market Stagnates, Ports Gain, Airports Lose – Other Cruise News: Lindblad Buys Orion Expeditions – Travel Dynamics Revives An old Tradition – Norwegian (NCLH) vs Facebook (FB)
by Kevin Griffin
Last week, the Passenger Shipping Association delivered its final set of annual UK cruise statistics before becoming CLIA UK. The presentation confirmed that there had been no growth in the market, while prices have been dropping. At the same time, the market is changing. While a planeload a day no longer fly to their ships, an extra shipload is sailing from the UK every week. In the expedition sector, Lindblad Expeditions announced the acquisiition of Orion Expedition Cruises of Australia. And New York-based small ship operator Travel Dynamics International is reviving the old tradition of cruising to Mackinac Island, with a July 4th cruise in its 130-berth Yorktown.
THIS WEEK’S STORY
UK Cruise Market Stagnates, Ports Gain, Airports Lose
In its last presentation as the Passenger Shipping Association before becoming the Cruise Lines International Association UK & Ireland (CLIA UK) on May 1, the UK trade group revealed the 2012 results for the UK cruise market in London last week. While there was stagnation, there was also change.
The overall number of cruisers stayed the same, rising only 0.06% from 1,700,000 in 2011 to 1,701,000 in 2012. This was the lowest rate of growth in the UK cruise market for more than a quarter century, although that is perhaps to be expected in light of the loss of the Costa Concordia in January 2012 and the Great Recession. By another measure, the proportion of first-time UK cruisers dropped from 40% in 2011 to 36% last year.
Last year, the average age of British cruisers was 56.1, the highest it has been in a decade, but without these veterans, the UK cruise market would have shrunk last year. Another thing that helped keep the numbers up is that many repeaters took multiple cruises. More than half of UK cruisers in 2012 – 918,000 – took at least two cruises and a record 374,220 booked three or more, accounting for 75% of the total.
Meanwhile, cruisers under the age of 35 accounted for only 12% of the total, and those under 45 less than a fifth. On the other hand, those 55 and above made up 64% of the market. While the average age of cruisers had slowly been falling, last year it actually went up again.
Although the market just held its own, UK ports saw a boom last year as the number of cruisers embarking in the UK rose by almost 10%, from 878,000 to 962,000. That’s 2,400 guests a week in a 35-week high season, or enough to fill an extra ship every week.
At the same time the number of cruisers flying to ships dropped by 6%, or about a full 767 a day – more than 200 passengers daily did not pay UK airport departure tax in 2012 compared to the previous year.
This switch to ex-UK cruise is evident in the fact that the Caribbean received only 189,000 UK cruisers last year, a 21% drop on 2011 and the lowest number in a decade, while Norway saw a larger number, 197,000, cruise to its fjords. The Mediterranean held its position as top UK destination, with 698,000 cruisers, but this in itself was still a drop of 9%.
Besides repeat cruisers, the other thing that seems to have prevented the UK cruise market from shrinking for the first time in decades was fares. The proportion of UK cruisers paying an average fare below £1,000 grew from 42% in 2011 to 47% last year, while at the other end of the scale, the proportion paying £2,500 or more fell from 13% to 8%. The number of ultra-luxury cruisers was 28,450, a miniscule 1.7% of the 1.7 million who cruised.
OTHER CRUISE NEWS
Lindblad Buys Orion Expeditions
Lindblad Expeditions announced last week that it was buying Australia-based Orion Expedition Cruises and its 106-berth Orion, while founder and managing director Sarina Bratton would leave the company.
Sven Lindblad, president and founder of Lindblad Expeditions, said, “We are extremely excited about the opportunity to offer global expedition cruising to Australians and we intend to bring the full weight of our experience and that of National Geographic to the Orion organization and the ship.”
Lindblad, in a partnership with the National Geographic Society for expedition cruising, owns five ships: the 148-berth National Geographic Explorer in Antarctica and the Arctic, the 113-berth National Geographic Endeavour and 48-berth National Geographic Islander in the Galapagos, and the 70-berth National Geographic Sea Bird and Sea Lion in Alaska, Mexico and Central America.
It also charters five ships, including the famous 68-berth tall ship Sea Cloud, for departures elsewhere in the world, including the upper Amazon to Peru.
Orion’s Sydney office will become Lindblad’s Australian branch office, while the Orion will be renamed National Geographic Orion in March 2014. Lindblad will also add an underwater remotely operated vehicle (ROV), a capacity for up to 24 scuba divers and ocean-going kayaks, while cruises will also be accompanied by a National Geographic photographer.
While retaining Orion’s current destinations, future voyages are also likely to go further east into the more remote Pacific Islands.
There is an interesting connection through the ownership of both Lindblad and Orion. Since 2008, Orion has been jointly owned by US private equity firm KSL Capital Partners and Cruise Ferry Master Fund, a division of the German bank DVB. Cruise Ferry Master Fund already held a 60% interest in Lindblad.
Travel Dynamics Revives An old Tradition
New York-based Travel Dynamics International will revive an old tradition this July the 4th when it sends its 130-berth 2,354-ton Yorktown on a 5-night cruise from Chicago to Mackinac Island.
A favourite of summer cruisers from Chicago in the past, Mackinac Island, at the junction of Lakes Michigan and Huron, is famed for being an island where no cars are allowed and transport is by horse-drawn carriage and bicycle.
Calls will also be made at the Michigan ports of Saugatuck, for its art galleries, and Charlevoix, for its sand dunes, with fares starting at $995 per person in double occupancy. The cruise includes welcome and farewell receptions, a complete program of tours and excursions, on-board lectures and complimentary wine and beer with lunch and dinner.
Departing Chicago on Wednesday, July 3, the Yorktown will visit Saugatuck for the traditional 4th July fireworks. Friday, July 5, will see her visit Charlevoix and on Saturday, July 5, the day will be spent at Mackinac Island.
Sunday will be spent cruising Lake Michigan for arrival back in Chicago for Monday morning disembarkation after breakfast.
Travel Dynamics operates the 100-berth Corinthian in the Antarctic by winter and the Mediterranean, Dalmatian coast and Black sea by summer, as well as cruises to West Africa, while the Yorktown cruises the Great Lakes by summer and the US East and Gulf coasts and Central America and Florida by winter.
Thomson Cruises Not For Sale
Last week we said that Thomson Cruises might be worth having a look at as an acquisition as Thomson was selling off some of its operations to pay down a £1.6 billion debt. However the company that is selling off operations to pay down debt is Thomas Cook, not Thomson.
While Thomas Cook is cutting 2,500 jobs and closing stores, Thomson Cruises’ parent company TUI Travel is having a strong start to its year. Analysts expect profits at TUI Travel to rise from £390 million in 2012 to more than £430 million for the year to September 30.
Thomson Cruises operate four ships in the UK fly/cruise market and won several awards in the Cruise Critic 2013 Cruisers’ Choice Awards.
Norwegian (NCLH) vs Facebook (FB)
With both shares trading around $28 on February 8, we decided to keep an eye on these two shares for a while. Here are the last five weeks’ closing results on Fridays:
At Close: Facebook NCLH
08.02.13 $28.55 $27.91
15.02.13 $28.32 $30.27
22.02.13 $27.13 $29.99
01.03.13 $27.78 $30.99
08.03.13 $27.94 $30.30
(Kevin Griffin is managing director of specialist cruise agency The Cruise People Ltd in London, England. For further information concerning cruises mentioned in this article readers can visit his blog)