Capacity conundrum: How do agents fill surging ship volumes?

Cruise lines are betting big on growth, with a wave of new ships on the horizon. But as capacity surges, is the trade’s task of ensuring there are enough customers to fill them too big of an ask? Emily Eastman investigates

Last year, global cruise passenger volume reached an historic high of 37.2 million while 16 new ocean-going ships entered service, with a similar number setting sail this year.

Across the rest of this decade, roughly 40 to 50 newbuild ocean and river cruise ships are scheduled for delivery or on order, adding up to 160,000 total berths to the global fleet – that’s an extra 7.8 million to 8.3 million passengers a year.

Lines around the world are betting on growth. Disney is launching a completely new class of ship, set to enter service from 2029; Regent Seven Seas Cruises is debuting its first new ship class in a decade, with more planned; Viking is pushing forwards with small-ship fleet additions; while Princess Cruises is introducing Sphere class and Voyager class ships.

MSC Cruises, meanwhile, has 10 new ships launching in the next 10 years, including signature World class and upcoming Frontier class ships.

Meanwhile, Norwegian Cruise Line’s orderbook includes Norwegian Aura, launching in May 2027. As the line welcomes brand new vessels, it’s transferring two of its older ships – Norwegian Sky and Norwegian Sun – to Indian operator Cordelia Cruises.

The move denotes the rapid growth happening in previously quiet markets; in India, cruise is gaining momentum, with demand expected to grow between 10 and 12 per cent annually.

It’s a trend being replicated around the world: Asia-Pacific is projected to expand by more than 10 per cent, while lesser-tapped river destinations, such as the US inland waterways, are also experiencing rapidly rising demand.

Celebrity River Cruises, for example, sold out its inaugural 2027 season in under six minutes.

Through the early 2030s, the global river cruise market is projected to grow by up to 15.5 per cent. 

The industry’s fleet grows at around three to five per cent a year, with 12 new ocean-going ships joining the CLIA fleet this year,” said a CLIA spokesperson. “This is constrained by shipyard capacity, given that a few shipyards in Europe are responsible for building practically all cruise ships around the world.”

Whether shipyards and staffing levels can keep pace with such growth is another concern.

“There will always be a need for talent, particularly as the industry moves towards alternative fuels and new technology,” said Bradley Millatt, principal consultant at Marine People, specialists in maritime and shipbuilding recruitment.

“The challenge is that owners, shipyards and outfitters can end up competing for the same experienced people, particularly within the same shipyard or region.”

Over the next five years, Millatt believes the cruise industry will have the workforce it needs to support its planned growth – provided the industry continues to invest in qualifications, training and career opportunities.

“If orderbooks slow down, more experienced talent may also become available, so it will be about balancing growth with investment in people,” he added.

For agents, this growth means opportunity. “The more choice there is, the more customers need advice,” said Club Voyages’ Sam Ballard. “Put 20 Mediterranean cruises in front of somebody online and they can look almost interchangeable.

"But there can be an enormous difference in experience. That’s where an agent earns their money. We need to understand the client first and then match them to the right
ship, rather than simply find the cheapest balcony cabin. In many ways, greater capacity makes that expertise more valuable.”

The biggest challenge is still getting somebody onto their first cruise, he added. “Once they’ve had a good experience, they’re usually much easier to convert to a second one.”

A confident market

There are compelling reasons to believe demand will continue to grow. The industry has surpassed pre-pandemic revenues and passenger numbers, with projections aiming towards nearly 40 million passengers by next year.

Around 36 per cent of cruisers are now under the age of 40, which is partly responsible for the shift towards modern technology, shorter trips and more adventurous itineraries.

But at the same time, fares have surged and some lines have introduced service reductions. There is a balance to strike between cost-saving and remaining appealing to a customer base that literally has the world at its fingertips.

Likewise, digital integration has become standard across fleets, but there will still be guests who prefer a more personal touch.

Therein lies the rub. New-to-cruise customers and younger demographics comprise a significant chunk of this recorded and projected growth. The former account for roughly 31 per cent of all cruise passengers in the past two years. But the shift represents a broadening of the market rather than a youth takeover and, as they adapt, lines would be wise to remain appealing to older demographics.

“Cruise holidays are an incredibly popular option,” said a CLIA spokesperson. “Over 90 per cent of guests return to another holiday at sea within two years.

"Additionally, interest to sail among those who have not been on a cruise before is over 80 per cent. Together, both categories are fuelling the industry’s popularity and growth, with cruise lines welcoming both returning and new-to-cruise guests.”

Club Voyages’ Ballard added: “We are definitely seeing new-to-cruise customers, but I think the growth is coming from both directions. Existing cruisers are incredibly loyal to the product and are increasingly treating a cruise as one of several holidays they might take in a year, rather than their one big annual trip.”

Managed growth

As cruise demand supercharges, there are some concerns surrounding destination management.

Port capacity and changing regulations are already affecting itineraries. Santorini has capped daily cruise visitors at 8,000, down from a previous peak of 18,000, to manage overcrowding. In practice, this has reduced the number of large ships allowed to drop anchor on any given day.

This year also saw Norway introduce its new environmental bans, whereby ships that don’t meet new zero-emissions standards are banned from the country’s Unesco-protected fjords.

Although the Norwegian Maritime Authority has structured the environmental rules as a phased rollout, giving the industry time to adapt, it’s a key example of how changing regulations will inform cruise offerings.

In the Netherlands, similar restrictions have been introduced. As part of a campaign to combat overtourism and reduce pollution in Amsterdam, Rotterdam has agreed to accommodate more than 40 ocean cruise ships annually that are displaced by the new rules.

Long-term, Amsterdam city leaders are working to completely ban large ocean-going cruise ships from its main sea terminal — similar to how Venice redirects large ships to alternative nearby terminals to protect the city’s delicate foundations and reduce pollution in the historic centre.

This is all good news environmentally but, as more ships take to the water, it requires a long‑term vision and plan for the lines building ships and planning itineraries that hope to visit these popular destinations.

“Cruise tourism is planned and managed tourism,” said a CLIA spokesperson. “It operates on long lead times, with ship itineraries and port calls agreed years in advance.

"This creates unique opportunities for destination management, through collaboration between ports, authorities and local communities to manage visitor flows and maximise the social and economic benefits of cruise tourism.”

Ballard noted customers are increasingly conscious of restrictions and pollution concerns. "It can actually reinforce the importance of looking properly at an itinerary rather than simply choosing a ship,” he said.

“If a customer has always dreamed of visiting somewhere such as Santorini or Venice, we need to understand exactly how and when they’re going to experience that destination.”

Over the long term, this will likely lead to cruise lines becoming more imaginative with itineraries as guests are spread across a wider range of ports.

“That could ultimately be quite positive,” said Ballard. “There are some fantastic destinations which have historically received a fraction of the cruise traffic of the headline Mediterranean ports.

“There is also clearly a responsibility on the industry to demonstrate that growth can be managed sustainably,” he added. “Customers increasingly expect that conversation to be taken seriously.”

It is possible for growth and sustainability to coexist. More efficient ships, alternative fuels, waste reduction and new propulsion technology are all counterweight elements to more ships on the water.

A safe bet?

Clearly, the industry is betting that supply will stimulate demand. Lines can deploy to emerging markets and new, mega ships offer economies of scale.

There seems little concern that the orderbook will outpace passenger growth, as the customer base broadens and lines welcome guests who perhaps wouldn’t have considered a cruise five or 10 years ago.

Such growth also represents a clear opportunity for lesser-known and visited destinations to position themselves on the map as passenger concentration moves away from the more-frequented ports of call. And more competition won’t necessarily reduce yields.

The ships are on order, and the trade will continue working to ensure the market expands to fill them.