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Cruise News

German market for cruise holidays is booming

May 31, 2010

Just over one million Germans spent their holidays on a cruise ship last year, an increase of 10 percent compared to 2008. Now German tour operator Tui Cruises is launching its second ship to benefit from the trend.

Cruises used to be the holiday of choice for well-heeled, older people willing to splash out. But as tour operators struggle with stagnating booking numbers for land-based package holidays, they have set their sights on developing the market for cruises.

Aida is the biggest player in the German cruise market - it has six cruise ships and is part of US company Carnival Cruises - the global market leader. Italy's Costa and the Swiss operator MSC also have a large share of the German market.

But smaller players are muscling in for a piece of the action. Tui Cruises, a joint venture between Tui and US-based line Royal Caribbean, has been offering cruise holidays in Germany since May 2009. Last week it announced it had acquired its second cruise ship, "Mein Schiff 2", which is expected to enter operation in May 2011.

Lucrative market

Parent company Tui, Germany's biggest tour operator, is hoping to cash in on the cruise trend by offering packages relevant to all age groups.

"There is no such thing anymore as a typical holidaymaker when it comes to cruises," Sebastian Hein, travel analyst at Bankhaus Lampe said.

"It's no longer just for old people. Prices have come down, it's not a niche segment anymore. There are still opportunities for growth in that area, unlike in Tui's core business, i.e. package holidays," he added.

Germans are still world champions when it comes to travelling, with 75.5 million vacations taken last year, according to the German Travel Association (DRV). Most of those are package holidays booked via a travel agent.

But the cruise segment is growing at a rapid clip, breaking through the 1 million passenger mark for the first time in 2009 in Germany. In the last seven years, the market worldwide has doubled in size.

The most popular cruise trips for Germans are in the Mediterranean and on the Nile and Danube rivers.

Great potential

Tui Cruises chief executive Richard Vogel sets great store in the cruise market and expects to turn a profit this year.

"We're confident that the cruise boom can be sustained in the next few years," he told the Reuters news agency on Thursday.

Joint venture partner Royal Caribbean agrees. "There's so much potential. I think the German market is one of the biggest cruise markets in the world. We're absolutely happy with the tremendous growth and this growth will continue over the next years between 10 and 15 percent annually," Tom Fecke, who heads the company's German operations, told Deutsche Welle at the ITB tourism fair in Berlin in March.

Companies like Tui Cruises are trying out new strategies to sustain that growth by offering all-inclusive deals or different kinds of entertainment on board.

"It used to be all about the land destinations on cruise ships, but now the focus is on entertainment on board. Where you're actually heading is not important anymore," Hein told Deutsche Welle.

Boon to industry

It is not just the travel industry that benefits from the cruise boom. German shipbuilders are shifting their focus to produce ships for the leisure sector.

In 2009, 73 percent of orders came from companies asking for cruise ships, yachts and ferries used in tourism, according to the German Association for Shipbuilding and Marine Technology. Orders for container ships, once a major source of revenue for shipbuilders, made up just 4 percent of orders.

Shipbuilders have been hard-hit by the global economic downturn and the subsequent drop in global trade, as well as fierce competition from Asia.

German market for cruise holidays is booming
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