Germany May Become Top Europe Cruise Market, Industry Group Says

Jason · July 1, 2013

Germany is set to become Europe’s top contributor of passengers to the cruise industry as record employment levels and generous vacation rules give consumers the cash and leisure time for sightseeing by sea.

“Growth in Germany this year will probably be at about the same level as last year,” when passenger numbers increased 11 percent, Michael Ungerer, president of the Cruise Lines International Association’s newly established branch in the country, said in a telephone interview on June 20. “Germany will be Europe’s biggest market in the foreseeable future.”

The U.K., currently the region’s biggest cruise market, showed no growth at 1.7 million passengers last year, while 1.71 million Germans will take overnight ocean trips this year, according to Ungerer’s forecast. The global cruise market is estimated to grow 4.5 percent this year to $36.2 billion, according to industry data and analysis provider Cruise Market Watch.

Germany’s economic growth, as well as employment levels near an all-time high, contrast with recessions in southern Europe, where record joblessness in countries including Spain and Italy have almost halted the industry’s growth in the region, the Brussels-based CLIA Europe said in its 2012-2013 annual report. Germany offers a minimum 20 days vacation plus 10 paid holidays, according to the U.S. Center for Economic Policy and Research.

Cruise operators are keeping ships full by using discounts targeting holiday makers who tend to book later and wait for rebates, Ungerer said.

Late Reservations

“Bookings are coming in on much shorter notice,” Ungerer said. “Part of that is induced by pricing. Short-term bookings are at the highest level ever.”

The Costa division of Carnival Corp. (CCL), the world’s largest cruise operator, offered a seven-day all inclusive trip on June 20 from Copenhagen to the fjords of Norway and back on its Costa Fortuna liner for 299 euros ($390) a passenger, a discount of 70 percent, according to the brand’s website. The average price of an ocean cruise in Germany in 2012 was 1,710 euros a passenger, or 185.50 euros a day, according to data from German travel association DRV.

In the U.S., Carnival offered a Caribbean cruise in April for as little as $38 a night, less than a stay at a budget-priced Motel 6 in the country, after more than a year of mishaps with vessels, including an engine fire on the Carnival Triumph that stranded passengers at sea for several days in February.

Sinking’s Effects

Carnival is projected by analysts (CCL) to earn only about half the annual profit it generated at its peak in 2007, after fires, robberies and the sinking of the Costa Concordia off Italy in January 2012 with the loss of 32 passengers tarnished its reputation.

Ungerer is also chief executive of AIDA Cruises, another of Miami-based Carnival’s European brands.

The CLIA, based in Fort Lauderdale, Florida, doesn’t provide regional data on sales or profit of cruise operators, several of which aren’t listed publicly, including third-ranked, Geneva-based Mediterranean Shipping Co.

Carnival posted a decline of 0.9 percent in passenger-tickets sales in the fiscal first quarter through February, while passengers carried rose 1.9 percent to 2.3 million. That contrasts with growth of 3 percent for ticket revenue and a decline of 1.3 percent for passenger numbers in the three months ended March 31 at Miami-based Royal Caribbean Cruises Ltd. (RCL), the industry’s second-biggest operator.

Royal Caribbean has reduced capacity in Europe by 10 percent this year. Carnival has said it won’t sail any of its namesake brand ships in Europe next year.

Construction of cruise liners “has slowed somewhat, as the big players are not building 10 or 12 new ships per year anymore, but two or three,” Ungerer said. “As the newly built ships are bigger, capacity won’t shrink as much as the declining number of ships indicates.”

By Richard Weiss, Bloomberg News

For more cruise news & articles go to http://www.cruisecrazies.com/index.html

Re-posted on CruiseCrazies.com - Cruise News, Articles, Forums, Packing List, Ship Tracker, and more

http://www.cruisecrazies.com

Click here to view the article