Should the Caribbean Cheer or Fear the Rapid Growth of the Cruise Industry?

2019 has seen numerous pieces of notable cruise news circling the Caribbean, from grand blockbuster openings like Royal Caribbean’s CocoCay in the Bahamas, to the recently announced, long-awaited, joint venture port development in Saint Lucia, to the US$ 20mn fine levied on Carnival Cruise Line in Miami for illegally discharging pollution into the ocean. It’s why the forecasts of surging demand and rapid growth within the cruise industry are met equally with excitement and weariness around the region.

Expectations of strong growth within the cruise sector in the months and years to come give rise to many questions. What areas of the cruise industry are growing fastest? What is driving the growth? What challenges exist amidst it? And what must Caribbean tourism providers consider in light of it?

Where Is The Most Growth?

According to the 2018-2019 Cruise Industry News Annual Report, over 470 ocean-going cruise ships are expected to be sailing by 2027. By that year, global cruise revenue is expected to increase by a third, from around US$ 40bn today to US$ 59bn. In nations like Saint Lucia, where stats show 669,217 passengers arrived in over 423 cruise ship calls in 2017, the potential for a surge in tourism business over the next decade is mouth-watering.

2019 has seen the Caribbean become the fastest-growing cruise region globally when it comes to pure capacity growth. It’s also a region well-placed to launch into a new decade, with several new infrastructure upgrades and cruise line attractions set to keep bookings strong.

Although it’s clear sailing now, trends can change rapidly. As well as the awful reality that a seasonal hurricane can decimate a Caribbean port, there are competing cruise regions elsewhere in the world. For example, the Mediterranean, which had been in something of a lull in recent years, saw promising growth in 2018, and is making inroads on a comeback. 

What’s Driving Growth?

Transport is going through a massive revolution right now. This informs the future profitability of the cruise industry, and this understanding is critical to assessing the future of cruising. In some instances, such as Elon Musk’s launch of Tesla electric cars, ample attention has followed transport innovation. But because many of the changes we see have been gradual and disconnected from one another, the discussion surrounding just how much transportation will change in the near future is relatively muted. 

Yet within the span of a generation we’ve seen multiple game-changing trends, like rapid population growth globally, a blistering rise in purchasing power across many nations, and the ease and speed of digital communications become an afterthought, meaning today’s cruise passenger need not make do with a postcard sent from each port but can call home instantaneously whenever they get homesick.

As a result, cruising is now easier and more convenient than any time before. It’s no surprise, then, that 30 million people this year alone are expected to have gone on a cruise – a 70% increase on the rate a decade ago. But just as cruise lines have benefitted from such changes, new competition and critics have arisen too.

What Challenges Exist? 

Alongside the obvious environmental concerns due to a rapid rise in cruising (something that is beyond the focus of this article but should be noted for the broader context), as mentioned above, transport is growing locally and globally. For the cruise industry, its greatest challenge is that no matter how sleek and luxurious new liners may be, air power will always outpace sea power. 

Travellers who have the time and means to set off on a leisurely holiday will have no issue continuing to sail out of port. However, for those with demanding commitments at home, increasingly any break will be with the desire (and need) for a short-stay vacation. 

Even though numerous Caribbean cruises are for seven days or less, a growing market of holidaymakers requires something shorter, or just different; for example, a trip where they can sip cocktails Friday night in the resort, relax by the pool Saturday, and still be back at the office Monday morning after a weekend away. The cruise industry could struggle to attract their business; after all, there are only so many nautical miles a ship can cover in a weekend, especially when the need for a return journey home is factored in. Then there is the competition offered by an attraction like an all-inclusive resort.

This has implications for Caribbean communities that rely on a busy port of constant cruise ship arrivals. Tourists from major markets like America and Canada will contemplate a short-stay weekend in the Caribbean but not so much the Europeans, given the distance involved to travel here. Also, the rising boom of cruises in Asia will not benefit the Caribbean, owing to the growing variety of ports and offerings throughout the Asian region that will entice travellers to cruise locally and not venture beyond Asia.

How Can Caribbean Tourism Providers Differentiate? 

Undoubtedly the cruise industry will remain a steady source of regional tourism revenue in the years ahead. However, just as cruise lines must prepare to pivot as market trends and traveller behaviour change, so must tourism businesses, and others who have an association with cruise lines, diversify their target markets. For while the cruise industry is expected to see very healthy growth globally in the near future, that growth will not be evenly spread.

The tremendous appeal of the Caribbean – with more than two dozen nations, over 7,000 islands, and a bevy of ports – means the region will always lure cruise ships and their passengers. But because more tourists are expected to arrive by air for short-stay vacations, any local tourism strategy must increasingly factor in the changing demand and trends of arrivals by sea and air, in order to ensure that any uptick in cruising is utilised as an asset, and not misread and converted into a liability.