While it's no surprise that demand for cruising has never been higher, you might be intrigued to hear how much those that have never cruised before are booking cruises.
Royal Caribbean Group saw terrific results in the first quarter of 2023, and its top executive is seeing all sorts of positive signs that the cruise giant has rebounded significantly.
One metric that stands out is how much demand for a cruise resembles pre-2020, signaling that the effects of the cruise industry shutdown are all but forgotten among consumers.
Jason Liberty, Royal Caribbean Group CEO, said in a recent interview demand from people that have never cruised before is actually better today than in 2019.
"We're seeing more new to cruise than we had seen in 2019," he said in reference to who's booking cruises this year. "We're seeing more first to brand, which is very much in line with our growth expectations for our capacity, growth as our new ships come on."
"Historically, you know, pre-pandemic, about a third of our guests were new to cruise, a third of our guests were loyalists, and the third of our guests refers to brand."
"What we see now is one propensity to cruise has completely returned back that was in 2019."
The return of new cruisers to the market is what drives a cruise line like Royal Caribbean back to profitability, because the amount of people that have never cruised before is the largest source of new customers.
The cruise industry was unfairly singled out in 2020-2021 as it was the only industry federally prevented from restarting for months, then had to get approval to restart as well as reporting cases.
Any concerns of consumers being wary to get back on a ship since seem to have been abated with these new numbers.
Demographics of who is booking a cruise
In terms of who's cruising, Mr. Liberty explained what sort of customers the company is attracting in 2023.
"So we have really three core brands that are really in their different segments," he explained.
"And so they all address different age and demographic categories. Like our Royal [Caribbean] brand is very focused on multigenerational family. Our Celebrity brand, people that are in their early 50s, more Gen X in nature. And our SilverSea brand, which is Ultra Luxury and Expedition, tend to attract a little bit of the Baby Boomer side of things."
That being said, younger cruisers are definitely coming to cruise.
"What we are seeing is the guest is actually a little bit younger on average than what we saw pre-pandemic."
"And a lot of that is because there's more millennials that are now into the system as they got married and started to have kids and are looking to experience incredible travel experiences."
"We continue to see the ability to raise price in the current market"
It's not your imagination, the price of a cruise is going up and that's because the market is tolerating it.
In a question about pricing, Mr. Liberty talked about the fact the company sees an opportunity to raise prices without negatively impacting demand.
"We continue to see the ability to raise price in the current market," Mr. Liberty explained.
"The main driver of that, one, I think, is having best brands, best ships win. And our guests get this incredible experience on our ships. And that gets broadcasted through advocacy of our guests, who are experiencing that."
Essentially, Royal Caribbean Group believes a combination of their ship quality and word of mouth is helping their cause.
Mr. Liberty also brought up a point of how much value a cruise vacation has over a land vacation, a statistic he's talked about quite a bit in the past.
"There's also a pretty significant value gap to land-based vacation."
"That gap was about 15% to 20% pre-pandemic. Today, it's about 35% to 45%. And we're going to make, you know, a pretty good dent in it here in 2023."
Tipping
One of the hot button topics is gratuities on a cruise ship, and Mr. Liberty answered a question about tipping on a cruise ship.
He was asked about the backlash related to "tip-flation" that's happened recently.
"We have a gratuity. It raises typically just based off of how inflation is changing. And that's more what is. It's pretty much a standard fee. Of course, our guests and can provide more. The guests can also choose not to, you know, not to tip if they don't choose to."
Read more: Should you prepay gratuities for your Royal Caribbean cruise?
"But-- but a gratuity-based system, a service-based system, we think is really important. But we're not chopping at every corner here on tipping. We have pretty much a standard fee for it."
Read more: Can I remove cruise ship prepaid gratuities?
