Reflecting upon the year 2023, Alex Sharpe, the president and CEO of Signature Travel Network, expressed relief in moving on from the trials of the past. As the final year of “normal” activity before the pandemic, 2019 serves as the measuring stick by which the cruise industry evaluates its bookings, revenues, and prices over the past four years. With such a prolonged comparison, one would hope for progress, but for too long, this dated reference point has stifled growth. However, as the cruise industry concludes its first uninterrupted year of operations since the outbreak of major Covid variants, executives are finally free to assess booking volume and revenue in comparison to the prior year. Sharpe, in particular, has high hopes for the future, declaring 2023 as the most successful Wave season in a decade. Despite the similarity in revenue between this year and the last, other factors exhibit mixed results. Volume seems to have decreased slightly, but price compensates for this dip, creating a promising outlook for the industry.
Sharpe attributes the decline in booking volume to the strong positions held by cruise companies at the beginning of the year. Carnival Corp., Norwegian Cruise Line Holdings, and Royal Caribbean Group, collectively known as the Big Three, have proudly declared their best-booked positions on a 12-month forward basis in recent earnings calls. Such robust bookings leave less inventory available for sale compared to the previous year. For instance, spring break vacations in 2024 are nearly fully booked, according to Sharpe. Consequently, the focus shifts to promoting summer cruises, which tend to be longer and more expensive, as well as the second half of 2024 and even into 2025. Despite lower volume, prices have remained strong, providing a glimmer of hope amidst the challenging market conditions.
In an unforeseen development, the Icon of the Seas cruise ship could have a short-term effect on Wave bookings. Sharpe revealed that approximately 15,000 advisors will be onboard the Icon in the next ten days, referring to several mid-January three-day sailings for advisors, travel partners, and media. While it is necessary for advisors to experience the ship firsthand, and onboard internet facilitates their work, the distraction of being away from their usual posts may impede their workflow. Despite this temporary disruption, the advisors’ presence onboard represents an opportunity for valuable insight and feedback that can contribute to industry growth.
In addition to the internal dynamics of the industry, external factors such as cold weather have unexpectedly given a boost to cruise bookings. Last week, advisors reported an increase in bookings due to a snap of cold weather. This surge in demand aligns with the traditionally stronger period for Wave bookings in the second half of January and into February. The combination of industry efforts and external catalysts creates an optimistic outlook for the coming months.
Overall, the Wave booking performance in the cruise industry for 2023 has been marked by contrasting elements. While booking volume has experienced a slight dip, strong prices and strategic positioning have compensated for this decline. The industry is gradually shedding the shadow of its last benchmark year and moving towards a brighter future. With promising developments such as the Icon of the Seas and the positive impact of external factors, the cruise industry is poised to rebound and thrive in the coming years. As executives and industry experts adapt to new challenges and opportunities, the Wave season continues to offer hope and resilience.
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