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Cruise lines broaden their target markets

Published March 15, 2007


MIAMI BEACH - Cruise lines must target new customers by including specific groups such as minorities, children and members of Generation X in marketing efforts as they try to cater to the broadest base of travelers, industry executives said Tuesday.

Executives of six cruise lines discussed topics important to the industry in front of a standing-room-only collection of representatives from ports, shipyards, suppliers, travel agents and cruise lines at the annual Seatrade Cruise Shipping Convention.

Richard Fain, chairman and CEO of Royal Caribbean Cruises, said meeting the changing demographics of a cruise industry that's getting younger and more diverse is one of its main challenges.

"You've seen large shifts in our industry ... to an industry which is more and more focused on being able to satisfy not only the American public or whatever public we're talking about in general terms, but also demographically targeting specific groups," Fain said.

Citing an industry statistic that shows only about 17 percent of Americans have taken a cruise vacation, Fain said directly marketing to such groups as blacks, Hispanics, the physically disabled and multigeneration travelers - families with children - would add to cruise vacation demand.

"Children were (once) seen as entities that distracted from the enjoyment of the bulk of our guests. ... Today we devote whole sections of the ships to meet their needs," he said.

Stein Kruse, president and CEO of Holland America Line, pointed to the increasing influence and affluence of 78-million baby boomers who are approaching retirement and will have more time and money to spend on vacations.

"I think we've got to strap ourselves in and look at what's coming ahead of us," Kruse said. "The wave of the baby boomer and what that means for our industry is just absolutely fascinating."

But Bob Dickinson, president and CEO of Carnival Cruise Lines, stressed the need to appeal to younger travelers. Statistics show that Generation X, from the late 20s in age to the early 40s, is the group that reports it is most interested in taking a cruise vacation, said Daniel Hanrahan, chairman of the Cruise Lines International Association's marketing committee.

"If you can get people when they're younger, it's an annuity," Dickinson said. "The purchase cycle of somebody could be 50, 60 or 70 years vs. a boomer who, on average, the purchase cycle is perhaps 20 years, 25 years."

About 12.1-million passengers took cruises to about 500 ports in 2006, and the trade group estimates that number will increase by 500,000 this year. The group's cruise lines need the demand because they have invested in 30 new ships at a cost of $15.2-billion for delivery through 2010, adding 74,000 berths and such amenities as surfing pools and bowling alleys in the process, Hanrahan said.

[Last modified March 15, 2007, 02:26:13]

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