Cruise Marketing Overview

In 1990, the cruise lines will be spending more than $100 in marketing expenditures for every single passenger they attract.

Overall industry spending on marketing has gone from $128.7 million in 1986; $207 million in 1987; $275 million in 1988; to more than $300 million in 1989. Estimated marketing expenditures in 1990 is closer to $400 million.

Cruise line executives interviewed by CIN said that increasing marketing expenditures simply means that with the growing cruise fleet, it costs more to sell more products. Executives also conceded that the American consumer and the travel agent may be bombarded with too many and often competing messages. (Why take a cruise, when you can fly to Mexico for less?)

Recent research has also shown that Americans may be confronted with too many choices so they end up making none, but keep on doing what they have always done, whether it is buying their favorite cereal or visiting family and relatives by car.

CLIA’s 1990 marketing report also shows that some of the old misconceptions still prevail including the perception among those who have not cruised but are favorably disposed to try a cruise that cruises are too expensive. While CLIA’s report says nothing about those who are not favorably disposed to taking a cruise, among those who are, two percent were concerned with seasickness and one percent with safety.

As the cruise lines are pouring additional dollars into marketing expenditures in 1990 the bigest share of which may go into television advertising, they are becoming the dominant travel marketeer. In light of this, one should believe that most Americans would be familiar with cruise vacations and that every single travel agent would be an active sales representative for the cruise lines. Yet, 22 percent of the berth capacity went out empty in 1989.

Out of a potential domestic market of some 30 million passengers as defined by the Cruise Line International Association (CLIA) or 45 to 60 million passengers as defined by the Boston Consulting Study Group, 3.3 million Americans took a cruise of three-days or longer duration in 1989.

Does that mean that the cruise lines are doing something wrong?

Not necessarily. More than anything it reflects the complexity of the American marketplace and the range of choices available to the American consumer who is the target of thousands of advertisers every day.

And travel agents are not much better off -­ they are the targets of half a dozen trade press publishers; some 50 cruise lines; 50 state tourism offices and 2,500 convention and visitor bureaus; 200 foreign destinations; 1,000 hotels; airlines, railroads, tour operators, and a multitude of other at It is a wonder that travel agents have any time at all to make sales.


From the pool of those who are favorably disposed to cruising, but have not yet cruised, the cruise message must look much the same for all the cruise lines. One cruise line executive recently said that if he took the cover off cruise line brochures, he was not so sure he could tell them apart. He also called for brochures to follow a standard format so that agents and consumers would know where to look for product description, itineraries, staterooms and rates.

Today, some brochures even from the major cruise lines, represent quite a challenge to read, and will not get any easier as the lines add yet more ships and more itineraries. Even most travel agents find it difficult to differentiate between most cruise products. In an informal survey performed by CIN this week among travel agents who specialize in cruise sales, a large portion said that information could be hard to find, especially for their clients.


In some cases, agents also pointed out that trade advertising differs from consumer advertising. There is often “oversell” to the consumer, they said, in the sense that he or she is led to believe they buy tremendous luxury for a tremendous price. Yet, while there is luxury, it may be on a more modest scale than anticipated. In spite of the popular cruise line executive statement that “even the worst cruise is a good vacation”, a passenger who got less than what he expected will be dissatisfied. He may not cruise again and he may complain to his agent. The cruise line stands to lose both the passenger and the agent.

Executives and agents also pointed out that cruise line marketing was not necessarily addressing the issues, that is, the conceptions that keep people from cruising.

Same Old Misconceptions?

There are clear signals that the cruise message is not getting through and that some of the old misconceptions are still prevalent. According to informal surveys by CIN, the segments of the American travel public that can afford a cruise, still consider cruises to be mostly for older people; they are also concerned about seasickness and confinement.

Moreover some of it is true. Passengers often get sick when the seas get a little rough; as the cruises get longer and more expensive, passengers tend to get older; while confinement is a matter of personal definition, “captive audience” may be a more applicable term.

But while there today undoubtedly is a cruise for everyone – of every age and preference – there is no doubt that cruises are relatively expensive.

The cruise lines can compare all they want to similar vacation experiences on land, but they are also expensive. It comes down not so much to income category as discretionary income.

According to demographic researchers, the average American now works 47 hours a week rather than 41 only a few years ago. Moreover, more families than ever before depend on two incomes to make ends meet. Thus, the family income may be higher, but so are also living expenses, and some of the reasons for the trend towards shorter vacations is that that is all people can afford – timewise and moneywise.

The industry defines the potential cruise passenger as anyone who is over 25 and earns in excess of $20,000 per year. This may be compatible with 3/4 day cruises in the lower cabin categories, but for longer cruises, the lines must reach and persuade those who typically spend several thousand dollars on a week’s vacation.

The president of an upscale cruise line also expressed concern that the growth of the short cruise market will lower the image of cruising rather than creating a pool of passengers wanting to upgrade to longer cruises. He said that while it may be unfair to characterize today’s megaships as mostly populated by small-time gamblers and compulsive shoppers, there is some truth to it.


The travel industry is unique inasmuch as it sells high-priced products through vendors over which it has no control. In contrast, automobile dealers are franchised by the manufacturers.

While this distribution system frees the cruise lines from a tremendous investment requirement if they were to establish their own sales outlets, assuming that few are in a position yet to franchise, the down-side of this independent relationship is of course that travel agents can sell any cruise they want or favor particular cruise lines for whatever reason. There is also a tremendous turn-over among ageny personnel which necessitates an ongoing dialogue in the form of sales calls, seminars, familiarization cruises, and so forth.

In CIN’s survey, travel agents that specialize in cruise sales were mainly concerned about overbuilding and resulting discounting. As second most important, agents emphasized that cruise lines tend to favor certain high-producing agents with better discounts and that they often go directly to consolidators who sell cruises at 30 percent to 40 percent off the rack rate.

Niches illusionary?

Seeking to avoid the traditional cruise market and the multi-million dollar budgets that go with it, several operators have laid claim to niche markets and niche marketing.

But most of the niche operators have found that they largely end up competing for the same passenger pool as the more traditional lines. Even youthful Club Med found that its initial cruise passengers were considerably older than its village residents, averaging 57, according to sources.

Ivaran Lines, which operates an 88-passenger luxury freighter, found that instead of attracting more freighter buffs who wished to upgrade their travel experience, they are attracting past passengers from Royal Viking Line and Cunard/NAC.

In an interesting parallel observation, the domestic gaming industry in Nevada and Atlantic City is concerned that the new casinos will adversely affect long-standing properties. Executives have voiced that the people with the highest proclivity to gamble are visiting the casinos already and will do so whether new ones are built or not. In order to fill the new capacity, the casinos are forced to attract customers for whom gambling (cruising?) is not the main attraction. Hence the new cruise ships that are less ships and more floating resorts; hence the fact that many older ships suffer poorer loadfactors as the cruisers try out the new vessels; hence the fact that cruise ships attract “cruise passengers” whether they are sailing vessels, megaships or cruise­ freighters(?).


The challenge to the cruise lines would seem to be to develop relevant marketing programs and to adapt to the changing travel and market trends.

One alternative is immediately apparent: instead of pursuing traditional marketing, a cruise line could either offer passengers a $100 cash gift plus the 15 percent commission it normally pays to travel agents, or rack rates could be lowered accordingly.

But regardless of all the clever marketing schemes an operator may have up its sleeves, the ultimate factor is product delivery. The successful operator must deliver the same product again and again with the same quality. Recent surveys have shown that the majority of travelers and travel agents put top priority on service quality, far beyond port selection, price and value. This should bode well for the industry as CLIA’s report states that cruise vacations have the highest satisfaction rating of any vacation experience.

Yet, when the ships are not sailing full and the repeat rate of a growing pool of past passengers is relatively modest across the board, it may indicate that some cruise lines are getting passengers onboard through advertising, discounted rates and/or other means, but not delivering up to the promised product.

It may also mean that cruises are too expensive to be repeated in the short term; that the cruise passenger is the adventurous type who would like to do something else; or that he or she has been persuaded to go back to a port-of-call as a destination. None of these issues seem to be addressed at least not publicly by the cruise lines or CLIA.

Whether cruise marketing is accomplishing its objectives as effectively as possible is of course debatable. But assuming that it is not, which may be bad from a marketing point of view, that would be good in terms of growth potential. That means there really are millions of potential new passengers “out there” who can be persuaded to cruise and come back.

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