Published March 2012

1. THE CRUISE REVIEW
PUBLISHED FEBRUARY 2012

2. CONTENTS EXECUTIVE SUMMARY
2011­ UK CRUISE MARKET
EXECUTIVE SUMMARY 3 One in every eight package holidays booked is now a cruise
CRUISING 4
Fly-Free Cruises all the rage 6 UK cruise passenger numbers increased 5% and, with sales of Ultra
no place like home 8 Luxury cruises rising 8%, total cruise sales spending topped £2.4bn
You never forget your first TIME 10
WHEN the Winter gets tough, luxury-lovers get going 12 The average price paid rose less than 1% in 2011
50 UK Ports share in cruise boom 13
More than four in every 10 cruises were bought for less than £1,000
Four out of every ten passengers were on their first-ever cruise
About 100,000 more UK passengers chose to start their cruise at
a UK port but higher flight costs saw a drop in flycruise numbers
Western Europe, Atlantic Islands, Norway and the Mediterranean
were the big cruise destination winners in 2011
An emerging trend for short cruises from UK ports meant that
nearly half of all cruises booked were of no more than seven nights
A second successive year of double digit growth in overseas and
UK passengers making a cruise visit at UK ports
Eight in ten passengers book cruises through travel agents

3. CRUISING
ONE IN EVERY EIGHT PACKAGE HOLIDAYS NOW A CRUISE
The number of British holidaymakers booking Later in the year, the UK travel marketplace Although cruise prices have gradually crept None of the eight new ships introduced by the
a foreign holiday in 2011 was the lowest so was also impacted by the Euro crisis which up from a post credit-crunch low in 2009, the global industry last year or of the eight due this
far this century so once again, although the put even more pressure on a fragile economy average per diem of £132 paid by passengers year are primarily targeted at UK passengers
package holiday business appeared to have and specifically on consumers’ willingness in 2011 was the same as in 2005. but they do add to the ever-increasing range
made a small recovery, the year’s real holiday to commit any of their declining disposable of global cruise products marketed in the UK.
success story was cruising. income to a holiday. Not surprisingly one in every eight foreign
package holidays now taken by British travellers The escalating cost of flights has, though,
It maintained the upward curve on which it has The impact of both events is reflected in the is a cruise when it was only one in 25 just nine limited growth in flycruising in recent years
been set for the best part of two decades with overall fall in foreign leisure travel but the value years ago. and remains a threat to future growth.
a near 5% increase in passengers, bringing a proposition offered by cruising clearly helped
total of 1.7 million. this sector outperform the market and take A return to double digit growth is predicted
an even greater share of it in the process. in 2015 with the arrival of a PO Cruises’ ship
This was exactly the level of growth forecast specifically for the UK market. The rise could
but was achieved despite the unpredicted Value for money still tops the list of reasons come sooner if an existing ship is redeployed
developments in the Middle East/North Africa for choosing a particular cruise ship with a big to cruise out of the UK by an international
region where the Arab Spring caused massive jump in the number of passengers for whom brand or a UK brand buying or chartering
disruption to Mediterranean cruise schedules the existence of all-inclusive drinks packages additional ships.
in the early part of the year. The cruise industry was also a key factor in their choice.
has the unique ability to move its ships to other
ports, away from trouble spots. These packages have been made available by
an increasing number of brands as an additional
way of giving consumers more transparency
to the final cost of the holiday being booked.
4 UK Passengers – Reasons* For Choosing Their Last Cruise
2009 2010 2011
Reasons % % %
Price/value for money 68 66 67
Service on-board n/a n/a 29
On-board atmosphere/service 40 36 26
1 Ocean Cruising’s Share Of The Foreign Holidays Market From The UK Dining 33 32 26
2 UK Ocean Cruise Market
Facilities on board n/a n/a 25
Ocean 3 UK Cruise Per Diems
Foreign cruises’ Ocean Special occasion 18 20 20
Year Passengers % change
inclusive Ocean share of cruises’ (000) Year £ All-inclusive nature of package n/a 24 19
Foreign holidays/ cruise inclusive share of
holidays tours holidays** foreign all foreign 2004 1,029 6.7 2004 124 Special offer 25 19 17
Year (000s) (000s) (000s) holidays holidays 2005 1,071 4.1 2005 132 Entertainment 17 15 16
2001 38,670 20,631 776 3.8% 2.0% 2006 1,204 12.4 2006 130 Cabins and public rooms 30 24 15
2007 45,437 18,674 1,335 7.1% 2.9% 2007 1,335 10.9 2007 137 Loyalty membership benefits 17 17 13
2008 45,531 17,914 1,477 8.3% 3.3% 2008 1,477 10.5 2008 135 All-inclusive drinks package n/a 4 11
2009 38,492 14,507 1,533 10.6% 4.0% 2009 1,533 3.8 2009 120 Cruise themes 7 6 5
2010 36,127 14,064 1,622 11.5% 4.5% 2010 1,622 5.8 2010 130 Pre-post land stays 5 5 3
2011 36,100* 14,400* 1,700 11.8% 4.7% 2011 1,700 4.8 2011 132 Maiden voyage 2 2 1
* Estimated ** Includes Republic of Ireland * Provisional estimates * Asked to select three principal reasons
1 Source: IRN Research – International Passenger Survey Crown 2 3 Source: PSA/IRN Research 4 Source: PSA/IRN Research
Copyright 2012

4. FLY-FREE CRUISES ALL THE RAGE If current trends continue,
within three years half of British
passengers will begin their cruise
holiday from a UK port.
If current trends continue, within three years Last year, though, there was also an increase
half of British passengers will begin their cruise in the number of short cruises from UK ports.
holiday from a UK port. These have always been used as ‘tasters’ to
appeal to first-time cruisers but are now a
Given that one third of passengers was choosing product in their own right, appealing to a new
that option as recently as 2004, this is a dramatic market looking for an alternative to hotel-based
transformation of their cruising habits. short breaks which has more inclusive pricing.
These cruises are particularly attractive to groups
And it is a transformation that was never more of multi-generational families or friends, often
evident than in 2011 when – for the first time in marking special occasions.
six years – the number of flycruise passengers 7 Cruise Durations Booked By UK Passengers (By Share)
actually fell. The passenger growth has resulted in cruise
%
industry revenues going up from £2.3bn to more Up to % % %
Previously it has simply been that sailing from than £2.4bn with the average price paid for Year 7 nights 8-14 15-20 21+
and returning to a UK port was growing even a cruise also up slightly from £1,421 to £1,434. 2004 52 40 6 2
faster than flycruising but 2011 was the year 2005 52 39 7 2
when the impact of Air Passenger Duty(APD) 2006 46 43 8 3
on UK long distance flights appears to have 2007 49 42 7 2
hit home in earnest. 2008 45 45 7 2
2009 39 49 8 3
While the number of Mediterranean flycruises 6 Average Duration (Nights) Of Cruises By UK Passengers 2010 44 42 8 2
increased, those to the Caribbean – where 2011 47 41 8 4
there is a disproportionately high APD cost
13.0
– fell sharply by 13%, attracting 34,000
fewer passengers. 12.5 Winter
8 Average Revenue (£) Per UK Passenger
12.0
This trend towards cruising from UK ports 11.5 Year Summer Winter Year
Total
has inevitably seen the average length of 11.0 2005 1267 1222 1253
cruise holidays lengthen with the average 10.5 2006 1196 1524 1291
staying at just short of 11 days for the 2007 1270 1480 1334
10.0
second year running in 2011. Summer
2008 1313 1647 1409
9.5
2009 1238 1532 1330
9.0
2010 1323 1629 1421
Nights
8.5
2011 1331 1729 1434
8.0
2004 2005 2006 2007 2008 2009 2010 2011
9 Price (£) Trends UK Cruise Market
5 UK Port Cruises Vs Fly Cruises
% % % %
Passengers % UK Port % Fly Cruise % % 501- 1,001- 2,001- 2,501- %
Year (000s) growth Passengers (000s) share Passengers (000s) share Year 500 1,000 2,000 2,500 5,000 5,000+
13.0
2004 1029 6.7 316 30.7 713 69.3 2004 15 25 40 8 9 3
12.5
2005 1071 4.1 403 37.6 668 62.4 2005 15 27 41 8 6 1
12.0
2006 1204 12.4 451 37.5 753 62.5 2006 13 21 40 11 12 2
2007 1335 11.3 467 11.5 35.1 867 64.9 2007 12 26 42 10 8 2
2008 1477 10.2 557 11.0 37.7 920 62.3 2008 11 24 40 11 11 2
2009 1533 3.8 594 10.5 38.7 939 61.3 2009 12 24 37 10 13 2
2010 1622 5.8 653 10.0 40.3 969 59.7 2010 14 26 38 10 12 2
2011 1700 4.8 753 9.5 44.4 947 55.6 2011 15 27 37 9 11 2
9.0
8.5
8.0
5, 6, 7, 8 9 Source: PSA/IRN Research

5. NO PLACE LIKE HOME
Itineraries remain the number one driver Some of these short cruises are also increasingly
of cruise bookings and one of the traditional featuring in the winter programmes of
cruise destinations for British passengers has UK-based ships.
come right back into fashion.
With fuel costs escalating, cruise lines are
The Atlantic Islands – that’s the Canaries looking for itineraries with shorter distances
plus Madeira – recorded the highest increase between ports and Western Europe clearly
in popularity among the top four destinations fits the bill.
last year with 19% more passengers. This is
mainly due to a 24% increase in the number of The other big winner among the major
cruises to the islands beginning from a UK port. destinations was Norway where there was
a 30% increase. The Baltic, though, ended a
The most significant destination development in decade of consistent growth with a 13% drop
the UK cruise market was in the sales of cruises due to itinerary changes by cruise lines but
into Western Europe. These grew 30% putting growth is forecast to return this year.
them right on the heels of the Atlantic Islands.
If the upsurge in interest in round-Britain cruises Alaska sales were down again as the ongoing
(+5% to 23,000 passengers in 2011) is added impact of a high passenger tax imposed five
to the equation, Western Europe overtakes the years ago continues to be felt. A cut in that tax
Atlantic Islands with its passenger numbers has, though, seen several lines return ships to
having doubled in just four years. the region for this or next year so an upturn
in sales can be expected.
This is significant because these close-to-home
cruises, primarily to ports in France, Belgium, the
Netherlands, Spain and Portugal, are forecast
to become ever more numerous as brands look
to develop a short-cruise niche out of the UK to
match the one that is so important to the North
American market.
11 UK Passengers – Reasons* For Choosing To Take A Cruise Holiday
2009 2010 2011
Reasons % % %
Itinerary/destinations 65 75 69
10 Destinations Booked By UK Passengers (000s)
Enjoyed previous cruise with line 54 58 64
Departure date 36 39 31
% change
Destination 2001 2007 2008 2009 2010 2011 10/11 Duration 31 27 22
Mediterranean 334 543 606 592 697 766 10 Flights from local airport 19 17 22
Northern Europe 98 213 247 296 303 342 13 No flight 26 28 21
Caribbean 146 228 255 275 272 238 (13) To try another cruise line 21 17 9
Atlantic Islands 77 93 108 102 98 117 19 Personal recommendation 11 7 9
Other areas 121 258 261 268 252 237 (6) Travel agent recommendation 6 5 4
Total 776 1,335 1,477 1,533 1,622 1,700 5 Recommendation on web review/blog 7 4 4
* Asked to select three principal reasons
10 Source: PSA/IRN Research 11 Source: IRN Research

6. YOU NEVER FORGET YOUR FIRST TIME A significant increase in the
number of passengers taking a
cruise holiday for the first time
in 2011 bodes well for the future
growth of cruising.
A significant increase in the number of Given the high percentage of first-timers, it
passengers taking a cruise holiday for the first is slightly surprising to find that the average
time in 2011 bodes well for the future growth age of passengers actually crept up a little to
of cruising. nearly 56 last year but it does makes sense as
60% of passengers were repeat cruisers who
Four out of every ten passengers – that’s nearly – inevitably – were at least one year (and more
700,000 – were on their first cruise compared likely two or three years) older than when they
with three out of ten the previous year. took their previous cruise.
This is the highest percentage since the PSA The increase in first-timers does appear to have
began collecting this data and, in 2011, more impacted the booking pattern with more than
than offset a sharp reduction in the number a third of cruises booked within three months
of people taking more than one cruise a year. of departure – the highest number since 2003.
Frequent cruise passengers still tend to book
This drop reflected the general leisure a year or so in advance.
travel market. Research has shown consumers
responding to their reduced disposable income British holidaymakers still prefer to make a
by taking fewer or no secondary breaks in cruise reservation through a travel agent with
order to ensure they can afford their main eight in ten passengers choosing this method
summer holiday. of booking.
14 UK Cruise Market – Trends In Booking Lead Times
% of bookings
(no. of months)
Year 12+ 9-12 6-9 3-6 0-3
2004 11 15 18 23 33
2005 17 17 18 22 22
2006 15 18 18 24 27
2007 18 17 18 23 24
2008 18 17 18 22 26
2009 25 19 17 22 17
2010 16 16 18 22 28
2011 15 15 17 20 34
15 UK Cruise Market Age Analysis
% passengers
Computed
Year Up to 26 26-34 35-44 45-54 55-64 65+ Average Age
12 First Time Cruisers As % Of UK Market
2004 9 5 10 19 26 32 54.2
13 UK Passengers Booking Multiple Cruises Annually
Year % of UK Market 2005 10 5 9 18 25 33 53.5
2006 36 Number of cruises taken in the last year (%) 2006 8 5 11 21 27 27 54.3
2007 38 Year 1 2 3 4 5 6+ 2007 8 4 9 19 27 31 53.2
2008 32 2008 50 32 11 4 2 2 2008 8 4 8 18 27 33 53.8
2009 29 2009 38 35 15 5 2 4 2009 7 4 8 18 28 35 55.6
2010 33 2010 43 33 12 5 3 6 2010 9 4 9 19 27 33 54.3
2011 40 2011 58 27 9 2 1 1 2011 9 4 9 19 26 35 55.6
10 11
12, 13 14 Source: PSA/IRN Research 15 Source: IRN (From Cruise Lines)

7. WHEN THE WINTER GETS TOUGH, 50 UK PORTS SHARE IN CRUISE BOOM
LUXURY-LOVERS GET GOING
Maybe it was the ultra cold temperatures The sustained demand for cruising into
of recent seasons, but there has been a huge as well as out of the UK is having a major
surge in winter ultra-luxury cruise bookings. positive economic impact on UK ports and
their surrounding communities.
A seasonal rise of 33% meant that, over the
whole year, 8% more were sold – ahead of In 2011, the outbound demand was strongest
the 2011 growth for the overall cruise market. from UK passengers with an additional 100,000
joining their cruise at a UK port compared with
2010. This more than offset a drop in overseas
passenger embarkations so that overall there
was 5% growth.
The inbound demand growth was even
stronger with 16% more cruise passengers
visiting UK ports, many of them during Round
Britain itineraries which are enjoying renewed
popularity. The number of UK passengers
enjoying Round Britain cruises rose to 23,000.
16 Ultra-luxury Cruise Passengers 2005-2011 The number of ports benefiting also increased
to 50.
Year Summer Winter Total % of all cruises
2005 12765 6311 19076 1.8
2006 12860 5655 18515 1.5
2007 13816 7552 21368 1.6
2008 13238 6427 19665 1.3
2009 14710 7960 22670 1.5
2010 16125 7899 24024 1.5
2011 15371 10498 25869 1.5
17 Embarkations At UK Ports
Maybe it was the ultra
cold temperatures of recent 2005 2006 2007 2008 2009 2010 2011
seasons, but there has been Total embarkations 503 576 591 714 733 833 878
a huge surge in winter Ultra % increase
UK passengers
18
403
15
451
3
460
21
557
3
594
14
653
5
753
Luxury cruise bookings. Overseas passengers 100 125 124 157 139 180 125
% share of overseas 20 22 21 22 19 22 14
18 Port Of Call Passengers At UK Ports
2005 2006 2007 2008 2009 2010 2011
Passengers (000s) 322 382 365 420 448 563 648
% change (1) 19 (4) 15 7 26 15
Ports 44 50 46 38 43 48 50
Ships 85 85 91 101 92 118 107
Lines 48 50 52 53 49 53 50
12 13
16 Source: PSA/IRN Research 17 18 Source: CruiseBritian/IRN Research
Note: included Crystal, Compagnie du Ponant, Hapag Lloyd,
Hebridean, Regent, Seabourn, SeaDream, Silversea

8. 14

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