For someone who has never stepped foot on an ocean liner and frankly isn't all that keen on boating in general, I've had a lot of conversations about cruises lately.
Several friends dipped their toes into cruising this summer for vacation. One took a Disney cruise with extended family and another took a Viking river cruise with her husband. Both reported back that they loved the experience, nobody got a buffet-borne illness and they also both were hoodwinked into a lot of additional upcharges for additional activities.
That's the cruising life, right?
I typically describe cruising in hotel terms as "all-inclusive resorts on the water," and I think that's about right. I have never cruised, but I have stayed at plenty of all-inclusive resorts and the parallels are clear. There's definitely allure to the idea of a pre-paid vacation, though of course operators of both all-inclusives and cruises count on the fact that you'll conveniently forget you already paid for the entire vacation and will happily fork over more for extra experiences.
Here's something else that's clear: U.S. lodging demand share is shifting away from hotel room nights and into cruise and short-term rentals.
Why cruise? The value perception is growing, key in these uncertain economic times.
Tourism Economics' Aran Ryan presented data on a webinar this week titled "The U.S. Travel Outlook: 2025 and Beyond," showing aggregate lodging demand from 2019 to now.
Hotel room night share still takes up the majority, but it's fallen from about 77% of US lodging demand in 2019 to about 68% now. Short-term rentals take up the next-biggest piece, growing from 21% in 2019 to 29% now.
And cruise? Tiny overall share, but here's the key — it also is growing. Cruise cabin nights accounted for 2.2% of U.S. lodging demand in 2019, and it's 2.8% now.
Now, it's tough to tell whether the same people who used to stay exclusively in hotels for vacation have now shifted entirely to That Cruising Life, but you can't argue with growth (cruise and short-term rental) versus, well, non-growth (hotel room nights).
Ryan put this lodging demand into perspective comparing it to GDP growth, up 14.6% since 2018. Total lodging is up 11% in that same period, including hotels, cruise and vacation rentals ... but hotel room nights on their own are down 1.3%.
"The travel appetite is still there," he said. "We're just seeing that some of it is going to those alternative stays."
And cruise supply is growing. Tourism Economics data shows 71 cruise ships on order, set to contribute a number of berths "equivalent to about 90,000 hotel rooms," he said. That stacks up to the roughly one million hotel rooms under construction around the world, he said, citing CoStar data.
Celebration Key, Carnival Cruise Line's exclusive private destination for cruise passengers on Grand Bahama, opened this summer. Ports from Miami to Galveston to locations around the world are under expansion to be able to accommodate more sailings and more passengers.
This all should give hoteliers food for thought. Even if your hotel is nowhere near a port, are you losing guests who see better value on deck? Have cruise companies made booking and payment easier? Has this segment of the industry communicated value and experience better?
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