Ports should get ready for an increase in shorter itineraries

The Caribbean cruise market is experiencing a significant increase in passenger numbers, but it is not only because more capacity is being placed in this market but because a dramatic shift has occurred in the length of the short Caribbean itinerary market. The trend towards shorter cruise patterns, such as 3/4 night and 5/5/4 night programs, is significantly shifting as a percentage of the total Caribbean traffic.

 

Our last bulletin focused on the shift of lower berth capacity in 2023 to several worldwide markets, particularly the Caribbean. That market continues to grow and is expected to welcome ~41% of global capacity. What has also shifted is the division of cruise lengths within the market.

 

From 2017 to the scheduled deployments in 2023, the percentage of short Caribbean capacity is expected to rise from 38% of the total Caribbean market to ~44% (“short” defined as a cruise of 5 or fewer nights), or a ~15% increase. For ports and destinations, this shift is huge, as it means that a single ship that used to call once a week now may call twice a week, or a 100% increase.  However, this will now shift the location of where this occurs. There will be an impact felt throughout the Caribbean.   

 

Our data indicates that the short cruise market has fueled most of the Caribbean’s capacity growth since 2017, with a CAGR of ~5%. Meanwhile, the long cruise Caribbean market has remained relatively stable since 2017 (~1% CAGR).

 

Caribbean Region Capacity – % of Short Cruise vs. Long Cruise

2017-2019 data from CIN, 2023 data from BA database

The growth in the short cruise market is a result of two factors. First, a growing demand for shorter, more flexible itineraries that can fit into busy schedules and allow for more flexible and affordable cruise options for guests.

 

The second is the desire of operators to optimize ship deployments by shifting itineraries that keep fuel expenses low. Cruise lines are high fixed-cost businesses, and even relatively small changes in fuel prices can significantly impact profits and ship deployments. Fuel is one of the biggest costs of doing business, averaging over 11% of operating expenses in 2019 across the largest four operators.

 

The short Caribbean cruise market is a solution for both, and its growth demonstrates the effectiveness of operators in optimizing yields while meeting the evolving needs of passengers.

 

What does this mean for ports?

 

Caribbean homeports with close proximity to foreign destinations in Florida and the Gulf of Mexico are expected to benefit from the growing popularity of short Caribbean itineraries, while ports further away may face logistical and economic challenges due to speed and distance.

 

Potential Caribbean Destinations Fit within Short Cruise Itineraries

Gulf short itineraries (Galveston, New Orleans & Tampa) are limited to 5/5/4 Night patterns as the nearest foreign ports are one cruising day away. Ports of call within a cruising day in the western Caribbean and the Bahamas (Tampa only) can be included and are expected to benefit.

 

In comparison, itinerary patterns in South Florida are within next-day proximity to foreign ports. Ports within next-day proximity of South Florida are expected to benefit the most as they must be included on three-night weekend cruises, but they can also be included in four-night voyages. These ports stand to benefit the most as they can welcome ships sailing 3/4 Night itinerary patterns.  

 

Of course, the distance to a port of call in the Caribbean will vary based on a specific homeport, and a port that can welcome 4-night cruises from one homeport may not be able to benefit from 4 night itineraries from another. For example, a 5 night itinerary from Tampa can reach Grand Cayman and Cozumel, but a 5 Night from Galveston can only reach Cozumel or Progresso. Sample 4 and 5 Night itineraries that highlight the issues are shown below.

 

5 Night Sample Itineraries

 

4 Night Sample Itineraries

Additionally, these short cruise itineraries provide more overall passenger days to a port that supports these deployments (whether it be a homeport or port of call). For example, a seven-night cruise sailing year-round in the Caribbean on Saturdays will deliver 52 calls to a homeport. Should that ship switch to a three- and four-night itinerary pattern, i.e., now sailing a Monday-to-Friday cruise, and a Friday-to-Monday cruise, that ship is now calling the homeport 104 times in a year, essentially doubling passenger throughput with this shift. The same will happen for ports of call that welcome ships on these itineraries.

 

This increase in passenger flows to ports may require additional infrastructure (such as parking) or resources to accommodate the added throughput.

Data reflected in this bulletin is based on BA’s deployment database that includes all available cruise itineraries in 2023 for the majority of key ocean and river cruise companies. Figures are reflective of lower berths, and actual passengers may be higher or lower than lower berths based on occupancy levels. Data was collected in December 2022 and may change if deployments change.

BA Maritime

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Ports should get ready for an increase in shorter itineraries

The Caribbean cruise market is experiencing a significant increase in passenger numbers, but it is not only because more capacity is being placed in this market but because a dramatic shift has occurred in the length of the short Caribbean itinerary market. The trend towards shorter cruise patterns, such as 3/4 night and 5/5/4 night programs, is significantly shifting as a percentage of the total Caribbean traffic.

 

Our last bulletin focused on the shift of lower berth capacity in 2023 to several worldwide markets, particularly the Caribbean. That market continues to grow and is expected to welcome ~41% of global capacity. What has also shifted is the division of cruise lengths within the market.

 

From 2017 to the scheduled deployments in 2023, the percentage of short Caribbean capacity is expected to rise from 38% of the total Caribbean market to ~44% (“short” defined as a cruise of 5 or fewer nights), or a ~15% increase. For ports and destinations, this shift is huge, as it means that a single ship that used to call once a week now may call twice a week, or a 100% increase.  However, this will now shift the location of where this occurs. There will be an impact felt throughout the Caribbean.   

 

Our data indicates that the short cruise market has fueled most of the Caribbean’s capacity growth since 2017, with a CAGR of ~5%. Meanwhile, the long cruise Caribbean market has remained relatively stable since 2017 (~1% CAGR).

 

Caribbean Region Capacity – % of Short Cruise vs. Long Cruise

2017-2019 data from CIN, 2023 data from BA database

The growth in the short cruise market is a result of two factors. First, a growing demand for shorter, more flexible itineraries that can fit into busy schedules and allow for more flexible and affordable cruise options for guests.

 

The second is the desire of operators to optimize ship deployments by shifting itineraries that keep fuel expenses low. Cruise lines are high fixed-cost businesses, and even relatively small changes in fuel prices can significantly impact profits and ship deployments. Fuel is one of the biggest costs of doing business, averaging over 11% of operating expenses in 2019 across the largest four operators.

 

The short Caribbean cruise market is a solution for both, and its growth demonstrates the effectiveness of operators in optimizing yields while meeting the evolving needs of passengers.

 

What does this mean for ports?

Caribbean homeports with close proximity to foreign destinations in Florida and the Gulf of Mexico are expected to benefit from the growing popularity of short Caribbean itineraries, while ports further away may face logistical and economic challenges due to speed and distance.

Potential Caribbean Destinations Fit within Short Cruise Itineraries

Gulf short itineraries (Galveston, New Orleans & Tampa) are limited to 5/5/4 Night patterns as the nearest foreign ports are one cruising day away. Ports of call within a cruising day in the western Caribbean and the Bahamas (Tampa only) can be included and are expected to benefit.

 

In comparison, itinerary patterns in South Florida are within next-day proximity to foreign ports. Ports within next-day proximity of South Florida are expected to benefit the most as they must be included on three-night weekend cruises, but they can also be included in four-night voyages. These ports stand to benefit the most as they can welcome ships sailing 3/4 Night itinerary patterns.  

 

Of course, the distance to a port of call in the Caribbean will vary based on a specific homeport, and a port that can welcome 4-night cruises from one homeport may not be able to benefit from 4 night itineraries from another. For example, a 5 night itinerary from Tampa can reach Grand Cayman and Cozumel, but a 5 Night from Galveston can only reach Cozumel or Progresso. Sample 4 and 5 Night itineraries that highlight the issues are shown below.

 

5 Night Sample Itineraries

4 Night Sample Itineraries

Additionally, these short cruise itineraries provide more overall passenger days to a port that supports these deployments (whether it be a homeport or port of call). For example, a seven-night cruise sailing year-round in the Caribbean on Saturdays will deliver 52 calls to a homeport. Should that ship switch to a three- and four-night itinerary pattern, i.e., now sailing a Monday-to-Friday cruise, and a Friday-to-Monday cruise, that ship is now calling the homeport 104 times in a year, essentially doubling passenger throughput with this shift. The same will happen for ports of call that welcome ships on these itineraries.

 

This increase in passenger flows to ports may require additional infrastructure (such as parking) or resources to accommodate the added throughput.

Data reflected in this bulletin is based on BA’s deployment database that includes all available cruise itineraries in 2023 for the majority of key ocean and river cruise companies. Figures are reflective of lower berths, and actual passengers may be higher or lower than lower berths based on occupancy levels. Data was collected in December 2022 and may change if deployments change.

CRUISE BULLETINS 

How CII Could Impact Ports & Itineraries

The Carbon Intensity Indicator (CII), introduced by the IMO in 2023, measures the environmental efficiency of ships by evaluating CO2 emissions per nautical mile traveled…

Q1 2024 Earnings Report Summary

In the first quarter of 2024, the leading public cruise corporation Carnival Corporation, Royal Caribbean Group (RCG), and Norwegian Cruise Line Holdings (NCLH) have set a promising tone for the remainder of 2024

Q4 2023 Earnings Report Summary

The leading public cruise corporations—Carnival, Royal Caribbean, and Norwegian—concluded 2023 on a high note, as demonstrated by their Q4 earnings reports.

Unveiling BA’s 2024 Comprehensive Cruise Itinerary Insights

BA unveils its expansive 2024 cruise itinerary database, spanning 13,700 sailings across 47 brands and 320 ships globally…

With 2023 coming to a close, BA explores what is in store for 2024

With 2023 coming to a close, BA explores what is in store for 2024…

Q3 2023 Earnings Call Summary

With the final earnings report for Q3 2023 released by the last of the big three public Cruise Corporations yesterday…

Shore Power Adoption in the Cruise Industry

One key technology and noteworthy initiative is the adoption of Shore Side Electricity (SSE) or shore power. In BA’s previous bulletins…

Q2 2023 Earnings Report Summary

With the last of the big three public companies wrapping up their Q2 2023 earnings reports in the past weeks, it’s time for BA’s summary of the key takeaways and themes trending today.

The Port’s Role in the Decarbonization of the Cruise (& Shipping) Industry

In our last bulletin, we talked about the cruise industry’s push toward decarbonization, and the exploration of various alternative fuel options such as LNG, methanol, and biofuels. The key takeaway was that decarbonization will be a collaborative effort across the entire maritime industry…

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