UK Cruise Industry Has Another Record Breaking Year

by Robert Lee, Tax-News.com, London

07 August 2007

In 2006, the introduction of new and refurbished ships from Fred Olsen Cruise Lines, Island Cruises, Louis Cruise Lines, Norwegian Cruise Line, Royal Caribbean International and Travelscope helped the UK cruise market to another record breaking year, with more than 1.2 million passengers, according to a new report.

The study, conducted by the market research firm Research and Markets, revealed that this was a 12% increase over the previous year, and suggested that in the context of a continued flat market for outbound package holiday travel it represents substantial growth. Since 2003, the outbound travel market from the UK has more or less remained flat, yet the demand for cruise holidays increased by a quarter.

The report concluded that the figures underline the importance of the cruise market to the overall UK travel industry, with cruising representing nearly 6.5% of the outbound travel market by volume and a higher percentage in terms of revenue. The market was worth approximately GBP1.55 billion (US$3.15 billion) in 2006 – an increase of 16%.

As the cruise market has expanded, the range and variety of cruises has expanded to suit the tastes of a growing variety of travellers. From short budget cruises to long luxury cruises, cruising is appealing to the young, the old, the adventurous and the conservative while maintaining high repeat factors associated with a product with high satisfaction ratings, the report noted.

For similar reasons, the European cruise market is also growing healthily. In 2006, there were over 3.4 million European cruise passengers – an increase of 9% over 2005. Like the UK, the German, Benelux, Scandinavian, Swiss and Austrian markets all experienced double-digit growth rates. Nevertheless, the UK still maintained its dominant position in Europe, with a 35% share of the market.

The industry predicts 1.5 million UK cruise passengers in 2008, based on additional capacity to be introduced this year and next. Royal Caribbean International, Princess Cruises, Mediterranean Shipping Cruises, Ocean Village and Thomson added capacity in 2007, there will be four new ships aimed specifically at the UK market in 2008 - Balmoral (Fred Olsen), Independence of the Seas (RCI), Queen Victoria (Cunard Line) and Ventura (P&O Cruises) - and NCL will base a ship in Southampton for the UK market. The report forecasts that this should help push the European market over the 4.0 million mark by 2008.

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