Deep Sea Passenger Transportation

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 80 deep sea passenger transportation service providers consist primarily of cruise lines that move passengers to and from foreign ports in a leisure setting. The major cruise operators offer a broad range of travel experiences through various brands that can be classified broadly as mass market/contemporary, premium, and luxury. Companies own and manage fleets of cruise ships that can carry anywhere from a few hundred to more than 7,000 passengers.

High Capital Intensity

The capital-intensive nature of the cruise business makes the industry heavily dependent on debt.

Dependence on Economic Conditions

Demand for cruises is affected by international, national, and local economic conditions.

Industry size & Structure

Prepandemic, the average cruise line operated out of a single location, employed about 270 US workers, and generated just over $460 million annually. In 2020, the CDC shut down the US cruise industry in March of that year; the average cruise line operated out of a single location, employed about 200 US workers, and generated almost $120 million.

    • Prepandemic, the US cruise industry consisted of about 55 firms that employed over 15,000 US workers and generated about $26 billion annually. In 2020, the US cruise industry consisted of 80 firms that employed 16,500 US workers and generated around $9.5 billion. In 2021, industry revenue dropped to about $5.5 billion and employment fell to 10,700 US workers.
    • The industry is highly concentrated; the top four companies account for about 97% of industry revenue.
    • Large companies include Carnival Corporation, Royal Caribbean Cruises, Norwegian Cruise Lines, and Disney. Carnival is the world’s largest cruise operator.
                              Industry Forecast
                              Deep Sea Passenger Transportation Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              May 20, 2024 - Revenue Increases
                              • Deep sea passenger transportation industry revenue increased 8.7% year over year but decreased 16.7% quarter over quarter during Q4 2023 to $12,518 million, according to the US Census Bureau. Water transportation industry employment increased to a 10-year high during the first quarter of 2024, according to the US Bureau of Labor Statistics.
                              • Two million more people went on cruises in 2023 than in the pre-pandemic year 2019, according to the Cruise Lines International Association. Most increases were in the US, with an incremental increase of 2.7 million passengers, 19% higher than 2019. The Caribbean, which continues to be the world’s most visited region by cruise, gained almost 1 million new cruise visitors in 2023 compared to 2019. Cruise destinations with the highest percentage increases in travelers compared to 2019 include the Mediterranean, North America’s West Coast, South America, and Alaska.
                              • Cruise line operators have gotten better at selling onboard, high-margin items such as drinks packages and shore excursions, according to The Wall Street Journal. Such items are typically responsible for more than a third of revenue, often before the ship even leaves port. Royal Caribbean CEO Jason Liberty said in late February that his company had 40% more pre-cruise revenue booked in the first two months of 2024 than during the same period in 2023. Cruise lines are also increasing sales while cutting costs by directing ships to their own private ports or islands.
                              • New ship deliveries are increasing and 2025 will be a strong year, according to Cruise Industry News’ Global Cruise Ship Orderbook Report. A total of 19 ocean-going vessels and two coastal ships are set to be delivered in 2025. The new builds have a combined value of $14 billion and are set to add over 47,000 extra berths to the global market. The ships are 106,450 tons on average, with an average capacity of 2,456 guests.
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