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Travelers ready to set sail on cruises at record levels next year

Published 12/04/2023, 01:08 AM
Updated 12/04/2023, 05:40 AM
© Reuters. FILE PHOTO: The Queen Mary 2 cruise ship by Cunard Line, owned by Carnival Corporation & plc. is seen docked at Brooklyn Cruise Terminal in Brooklyn, New York City, U.S., December 20, 2021. REUTERS/Andrew Kelly

By Doyinsola Oladipo and Granth Vanaik

NEW YORK/BENGALURU (Reuters) - Next year is looking like a banner year for cruise vacations, as travelers across all income and budget levels have been booking voyages at greater volumes than even before the COVID-19 pandemic, according to U.S. cruise operators and travel agents.

Travelers (NYSE:TRV) are looking to cruises in 2024 because they are still cheaper than land-based alternatives. With occupancy levels approaching pre-pandemic levels, operators plan to hike prices in coming months.

"Overall the market is extremely strong, especially the top end of the market in terms of the most high-end luxury cruises," said Bob Levinstein, CEO of cruise marketplace Cruise Compete.

Even as travelers have canceled or postponed planned vacations to the Middle East, cruise bookings will still hit record levels in 2024, said Truist Securities analyst Patrick Scholes.

Prior to the Oct. 7 attacks in Israel, industry-wide bookings for 2024 were about 25% higher than in 2019 for bookings in 2020. Bookings in November for 2024 were about 20% higher than the same period in 2019, Scholes said.

"Demand for 2024 has continued to accelerate with bookings consistently outpacing 2019 levels by a wide margin," said Royal Caribbean (NYSE:RCL) Group's CEO Jason Liberty in October on an earnings call.

About 35.7 million passengers are expected to cruise in 2024, up from 31.5 million in 2023 - which is 6% more than the amount of passengers that set sail in 2019, according to the Cruise Lines International Association (CLIA).

The one thing holding back bookings? Enough capacity to deal with all of the demand. Carnival (NYSE:CCL) CEO Josh Weinstein in September said volumes for 2024 will recede as the company could run out of inventory to sell despite a 5% increase in capacity from 2023.

Smaller operators say volumes are overflowing. Oslo-based private luxury cruise line SeaDream Yacht Club said bookings are so strong for 2024 and 2025, that they have already opened bookings for autumn of 2026, according to CEO Atle Brynestad.

Travel agency Marvelous Mouse Travels, which got its start planning Disney vacations, said 2024 demand has significantly surpassed bookings in 2018 and 2019, according to Kari Dillon, owner of the Huntersville, North Carolina-based agency.

"Travelers are taking advantage of the four or five-night short itineraries out of Florida ports," said Dillon. "With more and more people having the ability to work remotely, it makes hopping (on) these short Caribbean itineraries a breeze."

Travel agency InteleTravel said bookings for sailings in 2024 are about 70% greater than bookings than at this time in 2019 headed into 2020, said Dave Spinelli, senior vice president of industry relations at InteleTravel, a host travel agency in Delray Beach, Florida.

Royal Caribbean told investors that in the third quarter, two-thirds of its guests were either on a cruise for the first time or using Royal Caribbean for the first time. The company's repeat bookers have doubled, according to Liberty.

© Reuters. FILE PHOTO: The Queen Mary 2 cruise ship by Cunard Line, owned by Carnival Corporation & plc. is seen docked at Brooklyn Cruise Terminal in Brooklyn, New York City, U.S., December 20, 2021. REUTERS/Andrew Kelly

Online travel companies are taking notice of the cruise boom. Booking Holdings (NASDAQ:BKNG)' largest brand Booking.com launched a cruise vertical in November to capture growing cruise demand.

"Cruisers are loyal, with the data showing the majority of people who have cruised will cruise again, making it prime for continued growth," said Ben Harrell, U.S. managing director at Booking.com.

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