Newsroom Blog
THE cruise industry is probably the most concentrated of any sector in shipping, using a broad definition of the industry.
Just two companies, Carnival and Royal Caribbean, control more than two-thirds of the market, with Star Cruises and Mediterranean Shipping Co accounting for a large chunk of the remaining berths.
It is a degree of consolidation undreamt of in traditional cargo shipping, which has remained steadfastly fragmented.
The leading companies have been allowed to establish a dominant position, notably with Carnival’s acquisition of P&O’s business in 2003, because they are assessed to be part of the broader tourism industry rather than a hermetically sealed cruise market.
Unfortunately for the smaller operators in the cruise industry, the consolidation bandwagon looks set to keep on rolling in the face of economic recession and tight financial markets.
A new report on the cruise business by DVB, the German shipping and transport bank suggests smaller cruise lines could be forced to drop prices to unsustainable levels, given their lack of economies of scale, which could “pave the way for acquisitions, mergers or changes in the ownership structures of these cruise lines.”
And the report was written before the outbreak of swine flu in Mexico, which is already affecting cruise itineraries in the Caribbean.
Consumers may turn to other regions for a cruising holiday but many are likely to choose not to travel at all.
A further weakening of demand and the burden of the additional capacity coming on to the market in the next three years could combine to trigger another round of cruise consolidation.
Post your comment
Recent activity
- Green challenge
- Weight checks
- Spotlight on Greece
- Collective action
- Europe's failings
- Rule B twists and turns
- Baltic Max lessons
- Positive side to China
- Bulking up on gloom
- Stowaway solution
- All eyes on Greece
- Up the ante
- Student politics
- A queuing mentality
- Power with responsibility
- Borrowers beware
- Hanjin Heavy tactics
- No easy way out
- A bad benchmark
- What's in a name?
- Rethink the rethink
- Slow steaming is good
- Queue here for rescue
- Pay up or shut up
- Running out of patience
- Value for money?
- United front
- Think before you shoot
