31 July 2015
That enormous demographic shift will create huge challenges for governments – but likely prove a windfall for one particular sector of activity, which last year saw annual revenues rise to nearly $40 billion, up 7%.
While the cruise ship industry is keen to emphasize that it offers options for all ages, data suggests that this remains a truly “gray market.” Today, the average passenger is 50 years old; she is also likely to be university educated, married, employed and with an annual income over $75,000. Odds are that she is an American, heading to the Caribbean for a week.
In the wake of the global financial crisis – which unsurprisingly led to a decline in bookings – the sector has witnessed several years of steady growth.
Global passenger numbers are expected to reach 22.2 million this year, an increase of 3.2%. Over the same period, the average cruise cost per passenger is anticipated to rise by about the same percentage, reaching $1,780 for a typical 7.5-day cruise.
The aging of the world population is one especially bright spot for the industry; another is the creation of an emerging-market middle class, especially in China.
Last year, some 700,000 Chinese booked a cruise, about equal to the number of Canadians who played shuffleboard at sea over the same period. Given that China’s population is 40 times larger than that of Canada, the long-term opportunity to grow the Chinese cruise ship market appears nearly limitless.
In the meantime, the industry does face some challenges – including addressing the number-one passenger complaint.
According to a recent survey of 2,000 British holidaymakers, the greatest source of dissatisfaction with the cruise ship experience is neither seasickness, nor the quality of the free food. Instead, it is the “mindless and annoying chatter of fellow passengers,” cited by 38% of respondents as their top annoyance at sea.
That fact may explain, at least partly, why a seemingly unrelated industry is also doing so well. In future, as the cruise ship industry continues to expand, so may the sale of earplugs.