Consumer interest in cruising is at an all-time high, according to Cruise Lines International Association (CLIA) which also said that “hot prospects” have grown substantially.

Citing a new study, CLIA said that 44 million Americans feel they will “definitely or probably” take a cruise vacation in the next five years.

Seventy-one million Americans said they were interested in cruising in the next five years. The potential market also includes the 20 million Americans who have ever cruised, according to CLIA, of which 62 percent said they will definitely or probably take a cruise in the next five years and 79 percent said they were interested in taking a cruise in the next five years.

CLIA has defined potential passengers to live in households with annual incomes of $20,000 or more and to be 25 years of age or older. According to CLIA, 47 percent of the American population (255 million) or 119 million Americans fit the definition.

Interestingly enough, the so-called bot prospects were younger with more moderate incomes: their average age is 42, with an income of $51,500, compared to past five-year cruisers whose average age was 49 and average income was $63,090.

The hot prospects are also more likely to have children and to take their kids along on vacation.

James Godsman, President of CLIA, said that cruising has grown, on average, at a rate of 10 percent per year since 1970, making it the fastest growing vacation category in North America today. Nearly five million people are expected to take a cruise during 1994, up approximately eight percent from 1993.

Godsman said there are now equal numbers of male and female cruisers; that family members are the most common traveling companions; and that 17 percent vacation with their children. Forty-eight percent of today’s cruisers are taking a cruise for the first time.

What Does It Mean?

While there is agreement that cruises are “tremendous vacations” and that there is probably a vast passenger potential in North America (as well as in Europe), the tricky part is turning the potential into actual passengers.

Looking at 1994, CLIA said that 48 percent of today’s passengers are taking a cruise for the first time, that means that 52 percent are repeaters. Rounding out the numbers, that means that out of the projected five million cruise passengers this year, approximately 2.5 million are repeaters and 2.5 million are first-timers.

The 2.5 million repeaters come from a pool of 20 million past passengers. That would seem to mean that the average passenger only cruises once every ten years. Truthfully, some cruise more frequently and some may not cruise again at all.

But clearly in spite of the tremendous passenger satisfaction rating the industry receives, selling the majority of passengers a second cruise does not seem to be an easy task.

First Timers

While CLIA said there are 44 million Americans who feel they will definitely or probably take a cruise in the next five years, these hot prospects also include 12.4 million (62 percent) of the 20 million past cruisers who said they would definitely or probably take a cruise again in the next five years.

Thus, in this scenario, there are 31.6 million hot prospect first timers.

Growth Combination

If the approximately 50/50 combination of past passengers vs. first-timers continues for the next five years (1995 through 1999), while the annual passenger volume continues to grow at a rate of approximately 10 percent per year, the industry will carry an estimated total of about 34 million passengers over the next five years 17 million repeaters and 17 million first-timers.

The 17 million repeaters must come out of a growing pool of past passengers that could reach 37 million by 1999. But they must be persuaded to cruise more often than the so far established average of once every ten years.

By 1999, however, if 10 percent of the estimated 37 million past cruisers take a cruise, they will generate nearly four million passengers or fill nearly half the then estimated fleet capacity of eight million.

The 17 million frist-timers must come from the pool of 31.4 million first-timers which is going to put the industry to the task.

In this scenario, over the five-year period, the cruise lines must convert every other hot prospect into a passenger in order to fill the fleet capacity according to today’s formula.

Of course, the above is only hypothetical, but it is partially confirmed by Carnival Cruise Lines’ expressed concerns that the industry is not generating enough first-timers.

Other Scenarios

But there are several other scenarios as well including more frequent cruises by past passengers and further expansion of the hot prospects. After all, according to the CLIA study, 71 million Americans said they were interested in taking a cruise in the next five years and 119 million Americans who qualify as potential cruise passengers by CLIA’s definition.

Cruise lines, however, also define their hot market prospects differently. Royal Caribbean Cruise Line told this newsletter recently that the line identified 30 million American households as demographically eligible for its cruises. Regency Cruises, meanwhile, said that its passengers came mainly from the pool of past passengers. Other cruise lines in the premium and luxury categories may have to eliminate the lower income and age categories before focusing in on their markets.

Earnings Potential

“Taken to its maximum, the cruise industry cumulative market potential over the next five years is $87 billion,” said Godsman, “if everyone who said they have any degree of interest in taking a cruise acrually does so.

“If one only considers those who indicate they will definitely or probably take a cruise in the same time frame, the market potential projects at $54 billion,” Godsman said.

Godsman arrived at the market potential by multiplying the number of passengers with an average per diem of $200 and an average cruise length of 6.1 days.

Based on this newsletter’s calculations (above) of 34 million people cruising in the next five years, the industry’s ticket revenues, including air fare, is estimated at $41.5 billion. In addition would be the onboard revenue, bringing a five-year gross revenue potential in the area of $50 billion.

Sail-a-bration

CLIA has also announced plans to inaugurate the industry’s second major national promotion: “Sail-a­ bration.” This new program, designed to stimulate consumer interest in cruise vacations during the period of September through December, and to present new cruise offerings for 1995, kicks off Sept. 1, 1994.

“Sail-a-bration will give travel agents a headstart on their winter cruise marketing plans, and an opporrunity to capture last-minute bookings for fall sailings,” said AI Wallack, Chairman of CLIA.

The new promotional event follows four years of National Cruise Vacation Month, held each February. The new promotion includes a nationwide media tour; special cruise sections in selected magazines; heavy newspaper advertising; press kits; a 28-minute cable television show; and a specially-created cruise window display for travel agencies.

In addition, CLIA has created a contest for travel agents that awards cash and merchandise to those booking cruises during the Fall promotional period.