Cruise companies are cutting prices to win more German customers as demand weakens but their available capacity grows.
After years of double-digit growth, German cruise bookings have slowed noticeably since the start of 2019. Sales have weakened from a 7% rise last November to just 3.7% growth in March, according to the monthly Tats travel agency sales monitor. In comparison, bookings were up by 12.4% at the same time last year.
Many tourism industry experts are blaming this year’s overall weak bookings on the record temperatures in Germany last summer, which resulted in record levels of domestic holidays. This may be encouraging consumers to hold back this year in case the heatwave is repeated.
But one key factor may be that international cruise operators are more interested in filling their cabins than in maintaining price levels. This leads to short-term pricing measures when bookings are weak, which customers are well aware of. “The market currently has extremely attractive last-minute offers for price-sensitive customers who are flexible with their choice of travel dates or the route,” said Tim Krätke, marketing manager for cruise portal E-hoi.
Another factor is that the industry is busy increasing capacity with new ships at present and thus has more cabins to fill. Experts put the capacity increase for the German market at 15% this year. Among the new vessels are the Aida Nova, TUI’s Mein Schiff 2, two MSC ships, the Bellissima and the Grandiosa, along with Costa‘s LNG-powered ship, the Smeralda.
“Demand for cruises is still there but there are a lot of extra cabins to sell,” commented Thomas Rolf, managing director of cruise holidays specialist travel agency Astoria in Osnabrück, northern Germany. “It’s hardly possible to cope with the flood of offers,” he admitted.
But some cruise companies are reluctant to admit to price reductions. “The development of the cruise market still corresponds to the capacity increases by shipping lines,” claimed Aida sales chief Uwe Mohr. “The cruise market will again perform more strongly this year than the overall tourism market.”
TUI Cruises, with capacity usage of just 83% for this year at present, is putting a positive spin on the current trends. “In contrast to recent years, there are still free cabins for Northern Europe and Mediterranean (routes), which we can partly market with last-minute specials,” said sales chief Udo Lutz. “That way we can also target new customer groups.”
MSC said that spare capacity marketing is “at a similar level to recent years” but confirmed a changed booking pattern. “Many customers are booking later at present,” said the new Germany manager Christian Hein. “But there are signs of a turnaround and we expect a stronger second half-year.”
Some are even welcoming the current trends. “The flood of offers is great,” said cruise expert Oliver Wulf, owner of the Urlaubsexperte.de portal. “It means we have enough to sell, which is better than when the ships are sold out.” Similarly, E-hoi is compensating for lower average prices with higher bookings. It has a double-digit increase in bookings, although the portal’s average revenue per passenger has dropped.