29 October 2017 Celestyal Olympia
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29 October 2017 Celestyal Olympia Marketing your port destination A presentation by Chris Ashcroft 29 October 2017 Business products are not sold. They are bought. Business products are not sold. They are bought. Understanding this supply driven industry • The market • The brands • Deployment • Itinerary planning • Influencing factors • Who chooses ports Brands in the market Carnival Corporation AIDA Cruises (Germany) Carnival Cruise Lines (North/South America, UK) Costa Cruises (Europe, North/South America) Cunard Line (UK, North America, Germany, Australasia) Holland America Line (North America, Australasia, UK/Europe) P&O Cruises (UK) P&O Cruises Australia (Australia) Princess Cruises (North America, UK, Australasia) Seabourn Cruise Line (North America, UK, Europe, Australasia) Brands in the market Carnival Corporation structure CARNIVAL CORP 101 HAL COSTA GROUP GROUP 50 26 PRINCESS CARNIVAL CRUISES UK 22 10 HOLLAND CARNIVAL PRINCESS P & O COSTA AIDA AMERICA CRUISE CRUISES Cruises CRUISES CRUISES LINE LINES 17 7 15 11 14 25 SEABOURN CARNIVAL P & O CUNARD COSTA CRUISE ASIA CRUISES LINE ASIA LINE AUSTRALIA 3 5 4 Brands in the market Royal Caribbean Cruises Azamara Club Cruises (North America, UK) Celebrity Cruises (North/South America, UK, Australasia) Pullmantur (Spain, South America) Royal Caribbean International (North/South America,UK) Europe, Australasia, Asia) TUI Cruises (Germany) - joint venture with TUI AG Brands in the market Key brands not owned by Carnival/RCC Cruise and Maritime Voyages (UK) Crystal Cruises (North America, UK) Disney Cruise Line (North America) Fred. Olsen Cruise Lines (UK) FTI (Germany) Hapag-Lloyd Cruises (Germany) Hebridean Island Cruises (UK) Louis Cruises/Louis Hellenic (North America, Europe) MSC Cruises (Europe, North America) NYK Cruises (Japan) Noble Caledonia (UK) Norwegian Cruise Line (North America, UK/Europe) Oceania Cruises (North America, UK) Paul Gauguin Cruises (North America) Peter Deilmann (Germany) Phoenix Reisen (Germany) Brands in the market Key brands not owned by Carnival/RCC Ponant Cruises (France, North America, UK) Regent Seven Seas Cruises (North America, UK) SeaDream Yacht Club (North America, Europe) Silversea Cruises (North America, UK/Europe, Japan, Australia) Saga Cruises (UK) Star Clippers (Europe, UK, North America) Star Cruises (Asia) Swan Hellenic (UK, North America) Thomson Cruises/Island Cruises (UK) – now Marella Cruises Voyages of Discovery (UK, North America) Voyages to Antiquity (North America, UK) Windstar (North America) Market – Carnival Corporation financials % 2012 2013 2014 2015 2016 change % change US$m US$m US$m US$m US$m 2015/16 2010/16 Passenger tickets 11,658 11,648 11,889 11,601 12,090 4.2 3.7 On-board and other 3,513 3,598 3,780 3,887 4,068 4.7 15.8 Tours and other 211 210 215 226 231 2.2 9.5 Total revenue 15,382 15,456 15,884 15,714 16,389 4.3 6.5 Profits 1,298 1,078 1,216 1,757 2,779 58.2 114.1 Profits as % revenue 8.4 7.0 7.7 11.2 17.0 Passenger numbers (millions) 9.829 10.061 10.566 10.837 11.522 6.3 17.2 Market - Carnival Corporation fuel financials 2010 2011 2012 2013 2014 2015 2016 2016/10 No. of ships 98 98 99 100 101 100 102 4.1 Metric tons (000) 3,319 3,395 3,354 3,266 3,194 3,181 3,233 1.6% 100 102.3 106.8 98.4 96.2 95.8 97.4 Cost per metric ton ($) 489 646 710 676 636 393 283 -28.0% 100 132.1 145.2 138.2 130.1 80.4 57.9 Total cost (US$ million) 1,623 2,193 2,381 2,208 2,031 1,250 915 -26.8% 100 135.1 146.7 136 125.1 77 56.4 Market – Carnival Corporation financials 2013 Share 2014 Share 2015 Share 2016 Share US$m % US$m % US$m % US$m % North America 7,738 50 7,762 49 8,015 51 8,327 51 Europe 5,426 35 5,676 36 5,133 33 5,254 32 Australia/Asia 1,772 11 2,097 13 2,256 14 2,506 15 Others 520 3 349 2 310 2 302 2 Totals 15,456 15,884 15,714 16,389 Source: Carnival Corporation Market – Royal Caribbean Cruises financials % 2012 2013 2014 2015 2016 % change change US$m US$m US$m US$m US$m 2015-16 2012-16 Passenger ticket 5,595 5,723 5,894 6.059 6,149 1.5 9.9 On-board/other 2,093 2,237 2,180 2,240 2,347 4.8 12.1 Total revenue 7,688 7,960 8,074 8,299 8,496 2.4 10.5 Operating income 403* 796 942 875* 1,478 68.9 266.7 Profits 18* 474 764 666* 1,283 92.6 7027.8 * Pullmantur writedowns Passengers nos. (m) 4,852 4,885 5,150 5,402 5,755 6.5 18.6 Market More than 65% (52) of the new ships to be built will go to the five largest companies: • Carnival Corporation(17) • Royal Caribbean Cruises (12) • MSC Cruises (9) • Norwegian Cruise Line Holdings (7) • Genting Hong Kong (7) Market Cruise companies by capacity 2016 (June) 2020 % growth Company (no. of brands) Berths (ships) Berths (ships) (berths) 1 Carnival Corporation & Plc (10) 277,915 (101) 343,925 (116) 23.8 2 Royal Caribbean (6*) 141,272 (46) 166,988 (54) 18.2 3 Norwegian Cruise Line Holdings (3) 56,609 (24) 73,547 (28) 29.9 4 MSC Cruises (1) 38,716 (12) 73,082 (18) 89.3 Market The new-build programme is driven by three main factors: • The potential of the emerging Chinese market • The development of new fuel types • The much higher profitability of the larger ships being built. Market The most influential factor is the success of the so- called mega-ships. A decade ago, a 70,000t size ships was considered a very large ship; now it is barely medium-sized. 60% of the 81 ships on order up to 2026 will measure more than 100,000t and 10 of them will top 200,000t. Market Market trends show the most growth in bookings is coming in for mega-ships with the least growth for boutique or yacht-styled ships. The lower prices of the former are obviously an important factor but it does highlight the difference between perception and reality as mega-ships are generally negatively perceived even among traditional cruise fans. It also demonstrates exactly why all the major brands are so committed to filling their fleets with them. Market Although the mega-ships have generated some negative publicity for the industry, the fact is that these ships have proved hugely popular with passengers and, more importantly for the sector – disproportionately profitable compared to the smaller ships that the major brands used to operate (and still do but in declining numbers). Market The profits generated by the mega-ships comes primarily from the inbuilt greater efficiency of operating one ship that carries 5,000 passengers compared with operating two with 2,500 passengers apiece. This is manifested across most operational areas from crew numbers and fuel usage to marketing and promotion. But there is also the potential for far greater on-board revenue (pro rata) compared with smaller ships as the space is there to add more revenue- generating options in dining and entertainment. And as minimum numbers for some tours can more easily be met due to the sheer number of passengers onboard it is anticipated that increased shore excursion revenue can also be generated. Market Growth of the global cruise fleet Passengers ships no. % fleet ships no. % fleet total Growth % to 2017 2018+ ships ships 6000+ 3 1 2 3 5 67 5000-5999 1 0.4 16 23 17 1600 4000-4999 21 8 11 16 32 52 3500-3999 25 9 3 4 28 12 3000-3499 21 8 2 3 23 5 2500-2999 53 19 13 18 66 25 2000-2499 30 11 0 0 30 0 1500-1999 25 9 0 0 25 0 1000-1499 12 4 1 1 13 8 500-999 26 9 10 14 37 38 250-499 23 8 1 1 24 4 50-249 39 14 11 16 50 28 279 71 350 25 Market Average capacity of ships Berths Year (total) 2000 1,773 2005 2,907 2010 2,664 2015 2,722 2016 2,967 2017 3,112 2018 2,885 2019 4,448 2020 4,057 Market Global source markets 2012 2013 2014 2015 2016 % change Passengers ,000s 2015/16 North America 11,696 11,750 12,160 12,080 *12,270 1.6 UK and Ireland 1,701 1,726 1,641 1,789 1,889 5.6 Continental Europe 4,438 4,631 4,743 4,668 4,785 2.5 Asia (including Japan) 775 1,205 1,685 2,080 3,098 48.9 Australasia 699 839 984 1,125 1,371 21,9 Latin America and others 1,100 1,025 1,114 1,000 *860 -14.0 20,409 21,176 22,327 22,742 *24,273 Year-on-year increases (%) 0.8 3.8 5.5 1.9 6.7 Market Regional share of global cruise capacity % share 2011 2012 2013 2014 2015 2016 Caribbean/Bahamas 37.7 35.1 34.4 37.6 35.5 33.7 Europe 31.7 32.6 32.6 29.6 30.1 30.4 Australasia/Pacific 3.7 4.4 5.0 5.2 6.0 6.1 Asia 1.9 2.6 3.4 4.6 6.0 9.2 Alaska 4.4 4.7 4.8 4.5 4.5 4.1 South America 3.6 3.8 3.9 3.3 2.9 2.7 Rest of the world 17.0 16.7 15.8 15.2 15 13.8 Market Where Europeans cruised in Europe 2016 pax % pax share % share pax share % share pax Atlantic Islands Islands Atlantic Mediterranean Passenger numbers ,000 Europe Northern UK/Ireland 694 26.4 163 41.1 506 39.5 Germany 571 21.7 172 43.3 460 35.9 Italy 554 21.1 33 8.3 61 4.8 France 337 12.8 16 4.0 55 4.3 Spain 342 13.0 9 2.3 78 6.1 Others North Europe 133 5.1 4 1.0 121 9.4 Totals 2631 397 1281 42.8 6.5 20.8 Brands – top 20 Total berths 2016 2020 2020 Med ranking % change (June) ranking 1 Royal Caribbean Int.