For Americans who didn't experience a financial crunch during the pandemic, an increase in savings combined with a strong stock market is already resulting in what cruise lines and travel advisors say is a cruise upsizing trend.
It is among the factors driving strong cruise pricing in late 2021 and 2022 and what some cruise executives say could be a cruise "boom" when the industry resumes service in full.
"The industry has been shut down at least one year," said Frank Del Rio, CEO of Norwegian Cruise Line Holdings (NCLH), during a recent earnings call. "That means 30 million people that would have cruised in that year haven't cruised. And this is a finite-capacity business. I can't cruise with 150% occupancy. So there's going to be a squeeze play here that demand is going to exceed supply."
Del Rio said the removal of about 20-plus ships from the cruise fleet, combined with pent-up demand and "people with money in their pocket ... is just the making of a boom time for the cruise industry."
NCLH reported that cumulative booking for the first half of 2022 is "significantly ahead" of 2019's record levels, with pricing in line when excluding the dilutive impact of future cruise credits (FCCs).
The same week, Royal Caribbean Group reported pricing on cruises in the first half of 2022 was higher than during the same period in 2019. And in a recent video message to travel advisors, Royal CEO Richard Fain said to "prepare for the onslaught of bookings ahead. Because it will be an onslaught of bookings as all that pent-up demand comes our way."
Bookings are particularly strong for upscale brands Regent Seven Seas and Oceania Cruises, Del Rio said, reporting that both are nearly 40% booked for 2022.
A minisuite on the Norwegian Jade.
"That's much better than they've ever been at this stage of the booking cycle," he said, adding that clientele for those lines "are retired, semiretired. The stock market has been doing well. Investments have been doing well. They've got cash. And these are people who tend to travel more, and they haven't been able to. So the pent-up demand for them, for this cohort, I think, is greater than younger cohorts."
Annie Scrivanich, senior vice president of Cruise Specialists, said that the agency's clients are spending more as they add their 2020 vacation budgets to their next trips.
"Consumers are buying up, and they are moving their travel budgets forward," she said. "They are buying up by purchasing a nicer cabin, such as a suite or veranda, or selecting a longer voyage or one-off itinerary."
She pointed to three lines whose 2023 world cruises have already sold out: Regent, Oceania and Viking Ocean Cruises.
Cruise Planners is seeing similar trends, said COO Vicky Garcia, with a spike in world cruises (25% ahead of prepandemic), grand voyages, more exotic destinations, private upgrades and larger cabins. In February, Cruise Planners' weekly luxury purchases doubled compared with the previous six months, something Garcia attributed to pent-up demand and the 65-plus demographic having access to the vaccines.
"High-end travelers are ready and want brag-worthy vacations, and they are making up for lost time and want to see the world," she said. "It's simply a game of supply and demand economics, and affluent travelers are willing and eager to lock in their vacation."
Contemporary cruise lines, which have lower average pricing, are also seeing clientele spend more, especially when they are rebooking with an FCC, which carries a higher value, usually around 25% more.
"People are booking up," said Katina Athanasiou, Norwegian Cruise Line's chief sales officer. "FCC holders have so much value in the FCC that a lot of them are upgrading. Maybe if they were booked in an oceanview originally, with the value they have they are actually booking a balcony. Or if they had a balcony before they are booking a minisuite."
And, she said, even non-FCC bookings are in higher categories than normal.
"I think a lot of people realize they really want a vacation, and if they are going to do it, they are going to do it right," she said. "We are seeing a lot of balcony-and-above bookings."
Celebrity Cruises also said "a very high percentage of guests" use their FCCs "to buy up" and said its Retreat suite accommodations, which include a dedicated butler, private restaurant and exclusive lounge and pool areas, account for a larger percentage of booked business than they did prepandemic.
Susan Reder, managing partner of Frosch Classic Cruise and Travel in Woodland Hills, Calif., said that recently a client with an FCC on Regent decided to use the bonus value toward an upgrade from a penthouse to a Seven Seas Suite. In general, she said, after living through a year of the pandemic, people are not as concerned about cost.
"People want to go away so bad they aren't questioning the prices," she said. "They are saying, 'I haven't traveled in a year, let's go for it.' They want to get the hell out of Dodge."
Jason Montague, president of Regent, said such pent-up demand, coupled with higher vacation budgets, presents a great opportunity for travel advisors to show clients who normally sail on premium lines the value in moving to luxury.
"There is a huge opportunity for their clients and for our travel partners," he said. "If this has taught us anything, it's that you never know what's down the line. You want to maximize the time that you have available and optimize your time and money, especially your vacation and leisure time."