CLIA says that about 17% of
Americans have cruised. That statistic is positioned on the
organization's Web site as good news: The industry is profitable
and growing, and there's still a large field of potential cruisers.
That does not mean,
of course, that 17% of the U.S. population is actively cruising. If
their estimate of the number of people who would cruise in 2006
turns out to be correct, the 11.7 million passengers who boarded a
ship last year represented a little less than 4% of the U.S.
Is that good news
or bad? Is it disappointing that only 3.9% of the population
cruised last year, or should the industry rejoice that there is
still so much potential upside? With an 8.2% per annum passenger
growth rate, record profits and significant capacity increases on
the horizon, the lines are certainly not feeling much
But the relatively
slow rise in the number of new cruisers over the years suggests
that growth is fueled in no small measure by repeat cruisers.
Depending on the demographic slice being examined, experienced
cruisers will represent 54% to 63% of future business over the next
unanswered question is: Where does the real potential number of
cruisers ultimately top out?
industry overview indicates its targeted demographic for potential
cruisers is 25 years and older with a household income of $40,000
or greater. That means 44% of the country, 127 million people,
represent unconverted business. Applying those criteria, the 17% of
the population that has cruised actually represents almost 40% of
targeted potential cruisers.
While that would
still appear to leave considerable growth potential, anyone who
sells cruises knows that there is a fair percentage of the
population over age 25 making more than $40,000 who, fully aware of
all the benefits of cruising, will never choose to cruise. My guess
-- and I'm an optimist by nature -- is that the 17% of Americans
who have cruised actually represents at least 50% penetration of
the true universe of potential cruisers.
People have varied
reasons for choosing not to cruise, but one reason I eliminated
another 10% of the "potential" market is that, in most cases, lines
don't need to persuade individuals to cruise; they often need to
persuade couples. CLIA estimates that the decision to cruise is
made jointly 58% of the time.
I recently spoke
with a woman who may belong to the segment of the population that
represents the very ceiling of potential cruisers. Before she
decided to sail in late October, Elinor Lipman had placed the odds
that she would ever cruise at about 50:50. On one hand, she said,
"Some people I like and respect are cruise-a-holics," and that
piqued her curiosity. But she faced an almost insurmountable "con"
that outweighed all the pros: Her husband was uninterested in
indicates that word of mouth is the greatest influence on behalf of
cruising, but that sword cuts both ways. If your partner views
cruising negatively, a formidable barrier has been
On top of that,
both Lipmans were troubled by another result of word of mouth, what
she calls "cruise cliches."
"First, there's the
image of food, food, food, too much food," she said. "And I had
reservations about who I perceived would be my fellow cruisers and
didn't want to be stuck at a table with them. I guess it was
This is not the
first time that consumers with whom I have spoken indicated, often
with undisguised gusto, that snobbishness and lingering stereotypes
about cruising are powerful enemies of the industry. What
eventually led the Lipmans to decide to cruise was a
beyond-the-ordinary circumstance. She's a novelist, and she and her
husband were invited by writer community Web site Gather.com to
join a cruise from Boston to Bermuda on the Jewel of the Seas for
free, provided she gave one seminar.
anti-cruise husband found a free cruise irresistible, and while not
exactly a convert to cruising, he now would at least not rule out
In reality, the
Lipmans, over 25 years of age with a household income over $40,000,
would likely never have paid for a first cruise.
I don't anticipate
seeing a "first-time cruisers cruise free" campaign to stimulate
business any time soon, so the lines have their work cut out for
them if they ultimately want to more than double their existing
business. The Lipmans' story suggests where work needs to be done:
Cruise cliches are still alive, well and suppressing