Cruising is controversial: you either love to travel on them or you hate them; They bring wealth to large port cities, while denaturing them and polluting the air and the seas of the planet. In the following post we learn about the cruise business; since the reality is that 30 million people travel by cruise every year and its economic impact deserves a reflection.
Two centuries of cruising
There are Egyptologists who mention pleasure cruises on the Nile, already in Ancient Egypt. But the modern concept of cruise travel dates back to the first half of the 19th century; where the development of naval steam propulsion was key. The first ship with this technology crossed part of the Seine in 1803; and in 1824 the investigations of the French engineer Sadi Carnot were definitive for the shipping industry.
At that time two of today’s great cruise brands, now owned by Carnival Corporation, pioneered ship travel:
- Peninsular Steam Navigation Company (forerunner of P&O) began transporting mail and passengers between England and the Iberian Peninsula in 1837.
- And in 1840 the ocean liner Britannia, of the British and North American Royal Mail Steam Packet Company (Cunard’s forerunner), left Liverpool for the first time with goods, mail and passengers, via Halifax (Canada).
The following decades were key to the cruise. The Augusta Victoria popularized cruising within the European high society of the time from her first voyage in 1891. Another German ship, the Prinzessin Victoria Luise, was built for the luxury cruiser, and began operating the Hamburg – America line in 1900.
Not forgetting the largest ocean liner built up to then; the Titanic, also aimed at the more affluent cruise passenger, with all kinds of comforts on board. Its only five days of operation (April 10-15, 1912) and its tragic end were etched in the memory of several generations by James Cameron’s hit 1997 film.
Much has evolved the boat trip since then, going from being a mere means of transport to a means of entertainment aboard a privileged few, and becoming the popular form of travel today.
Figures from the cruise industry
According to the CLIA (International Cruise Lines Association), the cruise industry has experienced a sustained growth in the last decade:
Before the international crisis of COVID-19 was known, at the beginning of 2020, CLIA estimated a growth of two million more travelers for the following year, around 32 million cruise passengers. In addition, during the year 19 new cruise ships were scheduled to launch.
The main cruise market is the United States, with 50.21% of total cruise passengers, followed by Western Europe (23.73%), Asia (14.95%) and Oceania (5.15%).
The cruise sector employs 1,177,000 people and has a global turnover of 150 billion dollars. And in relation to the average cost per traveler, the cruise passenger spends 376 dollars before boarding and 101 dollars on each scale of the cruise; the most popular destinations are the Caribbean (32%) and the Mediterranean (17%).
Focusing on Spain, according to CLIA data, the average age of the Spanish cruise passenger is 45 years, and the most common age range is 50 to 59 years. In 2018, 530,000 Spaniards traveled by cruise, with an average stay on board of 7.3 days.
Regarding Spain as a receiving country for cruise ships; Puertos del Estado registered 10.1 million passengers on cruise ships in Spanish ports throughout 2018, accumulating six years of growth. According to the entity dependent on the Ministry of Transport, Mobility and Urban Agenda; in 25 years the number of cruise passengers passing through Spain each year has multiplied by 20 (Only 480,000 were recorded in 1992).
Of those more than ten million travelers, 67.7% passed through any of the ports on the Mediterranean coast (Barcelona, Tarragona, Castellón, Valencia, Alicante, Cartagena, Motril, Malaga, Ceuta, Melilla or the Balearic Islands), being Barcelona and the Balearic Islands the most demanded.
As a final note, the CLIA statistics show that the cruise industry employs more than 30,000 people in Spain and contributes almost 1,500 million euros to the country’s economy.
Main cruise companies and challenges in the sector
Since the appearance of those first shipping companies specialized in boat trips; the sector has concentrated on a few companies that bring together a high percentage of cruises.
The main company is Carnival Corporation & plc, the huge conglomerate with prestigious brands such as P&O, Costa, Holland or Seabourn, with 41.8% of the global market share. Followed by Royal Caribbean (23.3%), Norwegian Cruise Line (9.4%), MSC Cruises (8%) and Genting Hong Kong (4.6%).
The economic recovery, far from the financial crisis of 2008, together with the boom in the tourism sector; have been able to compensate increased competition and the negative impact derived from its increasingly well-known environmental impact.
This rejection has become more palpable in the main port cities, after reports were published that; for reference, indicate that mega-ships pollute the air of Spain five times more than cars.
the reason is the fuel used, Fuel oil, cheaper and highly polluting due to its high emissions of sulfur oxides (up to 60,000 ppm, 10 ppm emits a diesel truck). Legislation has been tightened starting in 2020, but even so, permitted levels of pollution remain high.
The solution proposed by the sector to comply with a regulation that grows in demands and a customer increasingly concerned about the environment goes unquestionably through greener cruises, through the following measures:
- LNG (liquefied natural gas) instead of fuel oil, to eliminate or minimize emissions of particles and toxic gases.
- Installation of new emission filtering systems.
- Implementation of advanced systems for wastewater treatment.
- Equipment and facilities in ports to supply clean electrical energy, instead of keeping engines always running.
Although, without a doubt, the main challenge facing the cruise industry is the COVID-19 crisis. The international blockade of tourism due to the coronavirus pandemic has led to the three main companies (Carnival; Royal Caribbean and Norwegian) to lose 80% of your price. Goldman Sachs estimates a profit drop of more than 50% in 2020 and slow recovery; subject to the end of the health crisis, once the pandemic has been controlled, and the subsequent global economic recovery; with a focus on the tourism sector.
