MIAMI -- The well-heeled are six times more likely to take a cruise
than most people, but only about 40% of the rich are choosing
luxury lines for their vacations, according to a survey of
Most of the cruising rich, defined as those with a net worth of
more than $5 million, are traveling on midpriced lines, according
to the survey, which was undertaken by Management Resource Group
(MRG), a consulting firm, and Decision Resource, a marketing
company, both based in Miami.
The findings suggest that luxury lines have a large untapped
But the message for travel agents is that they should consider
recommending mid-priced lines to some of their clients, when
"The luxury market has a good deal of unused potential," said
Ron Kurtz, president of MRG. "On the other hand, travel agents
should not feel shy about sending their high-net-worth clients on
midpriced lines after carefully assessing what the clients' needs
Kurtz, who was the founding president of Sea Goddess Cruises,
conducted the survey for ResidenSea Ltd., which is developing a
cruise ship planned as an exclusive residential community for the
super-rich. The survey was based on responses of 370 individuals
from an estimated 450,000 households in the U.S. whose members have
a net worth above $5 million, with annual incomes starting at
$250,000 and extending to over $1 million. Of the group, 28% took a
cruise during the two preceding years, for an average of 1.6
cruises during the period, a propensity to cruise far above that of
the average consumer.
Based on the data, MRG estimated that the super-affluent account
for $880 million in annual cruise sales, based on 2.2 million
passenger cruise days and an estimated average per diem of $400.
Surprisingly, only 41% took their most recent cruise on what the
survey designated as luxury lines: Crystal, Cunard, Radisson
Diamond, Seabourn, Sea Goddess, Seven Seas, Silversea and
Almost the same number, 38%, traveled on so-called premium or
contemporary lines: Carnival, Celebrity, Costa, Holland America,
Norwegian, Olympic, Orient, Princess and Royal Caribbean. The
remaining 21% booked other cruise lines.
The unexpected tendency of the group to cruise on midpriced
lines held for even the highest tier of the wealthy -- those with a
net worth above $10 million and annual incomes above $1 million,
according to the survey. Of this group, only about 45% traveled on
luxury lines, the survey found. Kurtz noted that these affluent
cruisers could easily afford a luxury cruise.
Why, then, do so many book with midpriced lines? For one thing,
Kurtz said, some cruisers may prefer a large suite on a midmarket
ship, offering the opportunity to have the ship's best
accommodations. "The top suites on many midmarket lines are very
spacious," he noted.
Other affluent passengers, he said, might want a more casual
environment than that found on most luxury ships. In a related
idea, he added, some may not want to pay luxury cruise per diems
for casual destinations, such as the Caribbean.
In addition, traveling on a ship catering to families is clearly
a factor for those with children, Kurtz said. For example, 73% of
those with children in the home chose midpriced lines, compared
with 49% of those without children, the survey found. Even those
without children in the home frequently travel with grandchildren,
he added, and in those cases prefer to book a ship catering to
Despite these explanations for the preference of many affluent
cruisers to travel on midpriced ships, Kurtz added: "We were
surprised to find that luxury lines are missing so much
As one tactic to gain more of the business, Kurtz suggested that
luxury lines might offer cruises with a much more casual
atmosphere. On some holiday cruises, for example, luxury lines
could make more of an effort to accommodate families, he said. In
addition, he said, some luxury lines may not be doing enough to
differentiate their products and explain the benefits they offer in
service, food and other amenities.
Travel agents should promote these benefits for affluent clients
who may not be aware of the differences, Kurtz said. It could
result in a higher commission. "In particular," he said, "agents
should think of 'upselling' if there are no kids."
Kurtz said that the survey's margin of error was plus or minus