Cruises for the Affluent Traveler: Market Insights and New Trends

Norwegian Cruise Line’s $3 billion acquisition of Prestige Cruises International late last year was not only a huge deal in terms of money, but a strong industry indicator that luxury cruises are gaining traction with consumers.

In the deal, Norwegian—known for more family-friendly experiences—acquired the upscale Oceania Cruises and Regent Seven Seas lines.

What does the acquisition—and other changes in the luxury cruise arena—mean for affluent travelers in 2015?

According to top luxury travel agents, affluent cruisers are still going to pay for unique experiences and white-glove service. And a strong U.S. economy means more consumers than ever may be looking to upgrade their yearly cruise vacation.

“I am very optimistic about the luxury market and cruising in general for 2015,” said Michael Consoli, owner of a Roswell, Ga.,-based Cruise Planners franchise.

“I see more and more of my clients willing to spend more for a luxury experience. The increase is due to confidence in America’s current economy.”

The upgrade cruiser
The Norwegian deal, in particular, bodes well by offering experiences attractive to a variety of cruisers.

“The Norwegian and Prestige products will complement each other by remaining distinct, giving Norwegian a move up option to its loyalist and Prestige a great pool of ready-to-move-up cruisers,” said Eric Goldring of Goldring Travel in Colts Neck, N.J.

A wider variety of product overall means there will be more to entice returning luxury cruisers, and more options for those looking to give the experience a try.

“I’m absolutely bullish,” said Goldring. “With the longer and more exotic cruises now being offered in the luxury market I think there will be higher sales but with fewer cruises sold.”

Diverse destinations
The pool of “ready-to-move-up cruisers” that Goldring refers to, are travelers looking to add more adventure to their trips by seeking destinations like Africa, Asia and Africa, as opposed to the more traditional Caribbean packages.

“I have seen a very significant increase in more exotic locations like Antarctica, Southeast Asia and Africa,” Goldring said. “As the most significant portion of the luxury market matures they are looking for something different.”

Goldring has found the Mediterranean to be the largest growth market, a destination also popular among the clients of Consoli, who also has seen destinations like Asia and the Baltic gain popularity.

Mike Brill of a Palm Springs, Calif.-based CruiseOne franchise said that in the past year he’s seen increased interest in destinations like Bali, Singapore, Malaysia and Thailand, as well as cruises on the Amazon River.

The Prestige effect
Some observers have expressed concern that the Prestige brands would take a hit in terms of quality and consumer perception, but agents are saying just the opposite.

“I don’t see any impact on the perception of Regent Seven Seas and Oceania,” said Brill.  “Both brands have consistently garnered wide consumer acceptance, which I feel could be even further enhanced by Norwegian’s acquisition.”  

In addition, an increased profile of luxury brands is good for agents’ commissions.

“These luxury brands are great for agents because they are usually all inclusive, which means the agent is getting paid for every component including beverages and shore excursions,” said Consoli

High-touch, but relaxed
Still, while the Norwegian-Prestige deal and increased interest in luxury cruising among less-mature travelers is unanimously viewed as positive by agents, they are aware the trend isn’t without its challenges for cruisers.

“One new trend in particular is the relaxation of strict dress code requirements, which is a double-edged sword,” said Brill.

“Younger cruisers—those under 40— have embraced this relaxation, while those who are used to ‘dressing to the nines’ have expressed some dissatisfaction.”

Brill also pointed out that he is seeing more exotic menu options on many of the luxury lines, as well as expanded all-inclusive options which, again, has some of his more mature clients slightly miffed.

“When unlimited alcohol is included in the cruise price, many non-drinkers take offense that they are subsidizing those who love their libations,” he said.

However, even with that slight clash between generations, agents remain staunchly optimistic on luxury cruise sales in 2015.

The growth of luxury cruising
Along with the growth of interest in trying something different, some agents are also seeing an increased booking window as well as longer travel time, making for an ideal situation for cruise-selling agents.

“I have seen clients more readily booking up to one and a half years in advance,” said Goldring, who said among the benefits of doing so are getting a desired suite and travel protection.

“People seem to be making time for longer cruises,” he added. “Five years ago I was begging for 10- to 12-day cruises, so clients could fit a cruise with travel into a two-week window, but now I am seeing more 16- to 35-day cruises being booked.”

This suits many agents, who are used to booking luxury cruises far in advance.

“Luxury cruises are not usually a last minute booking situation,” Consoli said.  “These guests book further out—a year or so—because they know the ships are smaller and cabin space is limited.”