Cruise lines are trying to win over millennials. Any guesses how?

Major cruise operators are making big updates to the on-board cruise experience to target millennials.

Royal Caribbean just spent $120 million transforming the Mariner of the Seas cruise ship as part of the $900 million "Royal Amplified" program to renovate and upgrade 10 ships in four years. Among the updates? The Sky Pad, a bungee trampoline experience that integrates virtual reality.

Aboard the Carnival Vista, passengers can try out the SkyRide, a bike that is suspended in the air that offers 360-degree views of the ocean.

It is these type of thrilling experiences that cruise operators are incorporating to market their ships as “adventurous” and “fun.”

Nightlife experiences also rank high on Royal's Mariner, which features live bands and sports bars that live stream events.

Royal Caribbean is taking it a step further by also offering shorter cruises to appeal to the younger audience that may want to try out a cruise without committing a full week to being on board.

Michael Bayley, president and CEO of Royal Caribbean International, said the Mariner will play a big role in the short-term Caribbean market as it happens to be a major on-ramp for millennials who are new to the cruise market.

“From an investor perspective, this is about growing a market and attracting the next generation," Bayley said.

Wall Street appears to agree with this strategy.

“Millennials are looking for shorter vacations, value F&B [food & beverage] almost as much as new destinations, and of course are currently the largest demographic in the U.S.,” said Robin Farley, managing director and research analyst at UBS Investment Bank who specializes in travel and leisure.

While millennials may not make up the majority of cruise passengers right now, analysts say getting them on board will be very important.

“If there is a shift in customer tastes to different types of experiences besides cruising, then this would be a serious issue for the cruise lines,” said Patrick Scholes, managing director at SunTrust Robinson Humphrey who covers lodging and leisure.

But Farley said cruise lines are still enjoying strong demand from baby boomers.

“Baby boomers are still the largest cruise demographic, and the nice thing is, with 10,000 boomers retiring every day, they have the time as well as the money to take cruises. There are some other sectors we look at where the aging baby boomer is a negative trend (such as buying motorcycles at a lower rate), but aging boomers seem to be good for cruise demand. And they control half of household income in the U.S.,” said Farley.

But new competition is coming from an unusual player: Virgin Voyages, which just announced that its first cruise ship, geared toward millennials, is set to debut in 2020. Virgin Group founder Richard Branson recently revealed the ship’s official name: Scarlet Lady.

By Seema Mody, CNBC Reporter
Re-posted on CruiseCrazies.com - Cruise News, Articles, Forums, Packing List, Ship Tracker, and more
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