Extreme excursions, exotic destinations and wacky itineraries – the beginning of the year means a spate of new trends and predictions for the cruise industry to enthuse about. But, among the talk of the millennial generation and the sector’s shifting geography, there are some things that just don’t change.
The Caribbean is one of them. It may sound ham-fisted, but old stereotypes of hammock holidays, piña coladas and duty-free shopping remain as relevant to the industry as ever.
Last year was an extremely successful one for the Caribbean circuit, with 11 new ships added and around 40% of global itineraries concentrated in the area, and it’s a trend that’s set to continue. According to forecasts by CLIA, the Caribbean market will grow by around 4% in 2014.
Being so close to the cruise market’s largest audience is a big help – more than 60% of the world’s passengers live in the US – and so is having such a strong infrastructure.
As a long-established market, the Caribbean offers ports that know more than most about handling cruise ships.
Of course, none of this should be a cause for complacency. Market share has been steadily declining in the Caribbean as new destinations open up in Asia and Europe. It may be the industry’s dominant force in global itineraries, but the Caribbean needs to stay on its toes.
"Destinations and tour operators have to understand that, just because you have an established, successful product, it does not mean you can rest on your laurels," says Michelle Paige, president of the Florida-Caribbean Cruise Association. "Your offering must be constantly updated and validated; success can be a burden to progress."
Room to grow
For such an established place, the Caribbean still has its own share of emerging destinations. In 2013, the Florida-Caribbean Cruise Association held its 20th annual conference and trade show in Cartagena, on the Colombian coast. Cruise numbers there have been rising consistently over the past decade after a string of infrastructural improvements and promotional projects.
"Colombian culture is highly attractive to cruise travellers," says Juan Guillermo Pérez, director at Proexport Colombia. "They feel especially attracted to its history and culture. Because of the Colombian Caribbean geographic location, cruises can have access to ports of call that are very close to the Panama Canal. This facilitates the journey, because cruises do not stay too long in high seas."
Other ports on the Colombian Caribbean coast, such as Santa Marta and San Andres, are starting to develop cruise operations too, but infrastructure remains quite poor.
"Today, the government is looking for different options to improve infrastructure in order to be more competitive and suitable when receiving cruise ships," Pérez says. "Every ambitious infrastructure plan is currently running, with foreign investment and local companies involved, as well as the national and regional government."
Guadeloupe has also seen a jump in activity from the US after opening a new cruise terminal in Grande-Terre last year. In 2013, 80 cruise calls were made, with new ships arriving from Costa, Aida, Royal Caribbean and MSC.
A little competition…
The enduring popularity of the Caribbean cruise industry is, in many ways, its biggest downfall. Saturation at traditional ports is one of the main reasons cruise operators are looking to places such as Asia – but, according to Paige, this isn’t something to fear.
"Our partners need to be encouraged to embrace rather than fear global competition," she says. "It can only improve standards, and, while your portion of the pie might shrink, numbers will grow. In order to be a successful partner to the cruise industry, you need to match and accommodate that growth."
After struggling to find satisfactory alternative ports, some operators are putting money into new private ones to ease this overcrowding. Carnival Corp is currently developing a $65-million cruise port in the Dominican Republic. The new site, designed to accommodate vessels from across Carnival’s brand, is likely to have a huge impact on local employment.
This follows a number of other similar developments by Carnival in the Turks and Caicos Islands, Cozumel and at Mahogany Bay in Honduras. Without adequate berths and investment from governments, these kinds of private projects are likely to continue.
Other cruise lines have been building their own private beaches to counter growing frustration with congested port stops. Royal Caribbean now operates a beach in Haiti to service Oasis of the Seas and Allure of the Seas. Its passengers can ride on a roller coaster or slide down a zip wire. Disney Cruise Line and Norwegian have also been working hard – both have built huge private resorts in the Bahamas.
It’s a long way from the core business model most people associate with the industry, but further shoreside investment will be needed if the area wants to avoid saturation. Large numbers of passengers in the Caribbean are repeat guests; keeping things fresh will require this kind of thinking.
It’s important not to forget that the Caribbean cruise market remains the dominant force in the sector, but how it reacts to increasingly global competition remains to be seen.
Not everyone in the industry is confident. Speaking at last year’s State of the Industry panel in Miami, Royal Caribbean president Adam Goldstein said: "I’m not sure the Caribbean destinations truly appreciate the nature of the competition on a global basis."
This kind of competition shouldn’t be taken lightly. Dynamic port developments in emerging countries such as Singapore – where $400 million has been poured into a new cruise centre – will create future hubs that could undermine the Caribbean’s market share.
"People who travel today are younger and more adventurous," Paige says. "That is one of the things that has enabled me to successfully communicate to the destinations that they can’t afford to cease their efforts – passengers will go where they want to go."
The message seems clear: piña coladas on the beach might still be popular, but the Caribbean will need to mix up the cocktail if it wants to stay on top.
