Europe is on a growth course. Of 51 new ships on the orderbook, 21 are for European brands. In addition, ships ordered for American-based cruise lines may be also dedicated to European markets, year-round or seasonally, as is the case with the Independence of the Seas.

The European growth is driven by the markets in the UK, Italy, Germany and Spain primarily, but also by France and other countries.

Leading Brands

The largest brands in the European markets are Costa Crociere with a 20 percent market share, followed by MSC Cruises, with 16 percent; AIDA, with 7 percent; Louis, 7 percent; P&O, 7 percent; and Pullmantur, 6 percent.

By 2012, the picture will change slightly, with Costa boosting its market share to 25 percent; MSC maintaining its 16 percent share; AIDA nearly doubling to 13 percent; P&O Cruises at 7.5 percent; Pullmantur 6.5 percent; and Louis at 6 percent.

Although Louis recently announced the purchase of two ships from the Star Group (NCL), the Norwegian Dream and the Norwegian Majesty, other Louis ships will be retired, so the line’s passenger capacity and market share will not change much.

A new player in the market will be TUI Cruises, a joint venture between Royal Caribbean and TUI, which will start service with one ship in 2009, transferred from Royal Caribbean, while plans call for newbuildings to be introduced starting in 2011.

Main Markets

The main European markets are the UK, dominated by P&O Cruises; Italy, dominated by Costa and MSC; Germany, dominated by AIDA; Spain dominated by Costa, Iberocruceros and Pullmantur; and France, dominated by Costa.

Being the largest market, the UK also supports the largest variety of brands, most of which are delivering a British product.

The German and Spanish brands are also tailored to their national markets, while Costa and MSC, based in Italy, offer a combination of pan-European, Italian and national products designed for other markets, including France, Germany and Spain.

In addition, Royal Caribbean, Princess Cruises and more recently NCL, also have ships sailing in Europe and the Caribbean, dedicated to European markets.

Moreover, Royal Caribbean and NCL will have ships in the Mediterranean during the winter, starting this year.

Potential

Europe still has huge potential for the cruise industry, if the American model is valid. So far the market penetration is far behind the U.S. And there are more people living in Europe; they have a tradition of taking more vacations; and they have disposable income.

Cruise ports can be reached on the Atlantic, Mediterranean and Baltic coastlines, without necessarily adding flight costs.

Excerpted from Cruise Industry News Quarterly Magazine: Summer 2008