River Cruising Report

Nov 06, 2010

River cruise executives are looking ahead at an expanding, enriched river cruise industry, drawing from a much broader base of consumers and agents, and a Cruise Lines International Association (CLIA) study supports their views, although there is still a gap among the current level of the product, its profitability and agent response.

Interestingly, the study finds that the luxury cruise sector and river cruising have very similar patterns. Like luxury lines, river cruises offer highly inclusive pricing. Themes are becoming extremely important as experts interpret special interests like wine, gardens, music, visual arts, etc. The two sectors are charting a similar course going into 2011, expanding their offerings to meet rising demand and attracting more customers by focusing on a very high priority: new experiences and exotic destinations around the world.

This year, 36.5 percent of CLIA agents reported increasing demand for river cruising; 34 percent found demand unchanged from last year. Sixty-four percent indicated increased awareness of river cruising among their clients.

Part of this growth is fueled by the expanding demographics; CLIA said that, while the primary market for luxury and river cruises is and will continue to be the experienced traveler, the cruise lines are reporting increasing numbers of younger guests, in one case a drop in the median passenger age from 60 to 45 in the last 10 years. Among the reasons are the increasing popularity of multigenerational cruises and marketing aimed at more active, hands-on travelers.

The study predicts that the ongoing introduction of new ships will continue to heighten interest and visibility in river cruising. Between 2010 and 2011, at least nine new vessels will enter the river cruise fleets. But CLIA member lines say the destination is the keystone of the strong bookings.

Agents agree that destination is a top motivator; 86.9 percent rank the destination and the itinerary at the top of the list for river cruising, followed by authentic experiences in small towns and destinations, incorporated land programs and sightseeing, shipboard service and lifestyle, the all-inclusivity of the product and perceived value.

Currently, the hottest destinations in both river cruising and luxury travel are Europe and the Mediterranean, followed by new itineraries in the Baltic, Russia and Central Europe, South America, the Middle East and Asia. Agents largely agree; 97.8 percent of river cruise sellers rank Europe at the top, followed by China and Russia.

Agents identify couples and affinity or social groups as growing markets for both river and luxury cruising with the retired/senior demographic still maintaining the top position.

Agents observed that the new ships for the river market are more upscale, with larger accommodations and that, as the market broadens, river cruisers are seeking new experiences, demanding greater value and having higher expectations of quality at an affordable price. Agents see more promotions and greater competition among river cruise lines, with more emphasis on pricing and providing additional value.

In addition to the high commission rates on river cruise sales, agents profit through pre- and post-cruise programs that are especially popular with the majority of river cruisers, with more than 70 percent most likely to add a land stay on to their river voyage.

Regardless of financial status, both luxury cruisers and river cruise enthusiasts respond to deals: 85.7 percent of agents say river cruise clients are somewhat or much more apt to make a purchase with a special offer; 79.6 percent say luxury clients are similarly motivated.

The study indicated that agents would be well advised to look for river cruise clients among the broader community of cruise enthusiasts; 68.6 percent of agents say their river cruise customers have and continue to take cruises on larger ships as well. Good news: booking patterns for river cruises are lengthening: 48.9 percent of agents report river cruise customers booking farther out (an average of 7.68 months).

River cruise marketing that produces results includes word of mouth, personal relationships, networking and direct mail.

Given the high commission rates on very inclusive fares, it’s surprising that more agents haven’t turned to river cruising as an important product. CLIA’s study showed only 17.5 percent of agents sell river cruises with regularity (64.4 percent have done so occasionally). Typically agents report river cruise sales account for 10 percent or less of total cruise sales, so there’s a huge opportunity in this segment.