Wave season steaming along due to higher cruise prices
2024-03-11
Two months into the cruise industry’s punchiest promotional period of the year, Wave season is ahead of expectations, in part due to higher pricing, executives across the industry said.
A recent survey of travel advisors and cruise executives from the Cleveland Research Co. found that January bookings were a touch below expectations but were followed by a more robust February. Meanwhile, pricing has remained strong, driving revenue higher than expected.
“Optimism was high going into Wave of ’24, and bookings now appear to be exceeding those expectations,” said Vince Ciepiel, a senior research analyst and partner at Cleveland Research.
Sixty-nine percent of travel advisors and cruise executives who responded to a survey from Cleveland Research indicated their gross year-to-date booking values were at least 6% greater than the same time a year ago. For 33% of respondents, booking values exceeded 11% of last year’s year-to-date bookings. The survey queried cruise operators and a mix of 50 travel agencies and consortia of various sizes.
Most respondents described volume running slightly slower than expected in January and slightly ahead of 2023 levels in February.
Price growth appeared to be a larger driver of this Wave season’s gains than gross bookings, Ciepiel said.
Norwegian Cruise Line Holdings (NCLH) CEO Harry Sommer told investors that the company’s booked position and pricing are higher in all four quarters of 2024 than they were in 2023.
“When demand is good, we take advantage of it,” said Sommer, referring to higher pricing.
Q1 was entirely booked for NCLH as of late February, and the other three quarters are in record booked positions, excepting sailings affected by complications in the Red Sea, he said. NCLH’s flagship brand, Norwegian Cruise Line, is showing significant strength, he said.
Meanwhile, close-in demand for the Caribbean was so strong that the company redeployed the Norwegian Epic and Norwegian Getaway to the Caribbean, sailing from Port Canaveral, Fla., and New Orleans, respectively, pulling them away from shoulder-season sailings in the Mediterranean.
Rates and sales volume at Royal Caribbean Group were significantly ahead of the same period last year, CEO Jason Liberty said during the company’s Q4 earnings call in early February. He said the company sees no signs of business slowing and noted guests were rebooking at twice the rate they did in 2019.
The new Icon of the Seas is commanding price premiums this Wave season.
The new Icon of the Seas is commanding price premiums this Wave season. Photo Credit: Royal Caribbean
Carnival Corp. said in late January that it was enjoying its best booked position on record, with both pricing and occupancy considerably higher than in 2023 and with the first half of 2024 nearly fully booked.
Michelle Lardizabal, chief sales officer for Azamara Cruises, said Wave has been strong. “We’ve had some of our top booking weeks over the past two months,” she said. “It’s been wonderful to see the business coming in not just for ’24 but also building ’25.”
Azamara has continued its Wave marketing, she said, and predicts that will help booking momentum continue for the rest of the year.
For Windstar Cruises, 2024 is turning out to be its strongest year ever from both a revenue and occupancy standpoint, said Janet Bava, the line’s chief commerce officer. Not only have Q1 bookings exceeded the revenue and occupancy targets, but momentum is also strong for 2025 and 2026.
Windstar’s winter Caribbean season is performing better than it ever has, she added, and Tahiti is showing particular strength, with 2024 revenue and occupancy exceeding expectations. “Our decision to move the [Star] Breeze into Tahiti and doubling our capacity in the region with expanded itineraries is paying off,” she said.
Last year’s successful Wave season was a hard act to follow, but this year’s Wave is strong, Geoff Cox, vice president of sales and marketing for KHM Travel, said during a Folo by Travel Weekly podcast episode last month.
“January and February, we didn’t blow it out of the water compared to last year. … But on the revenue side, we’re definitely in the black,” he said, adding that price points are a little higher.
The booking window has also stretched to about nine to 10 months, with few cheap cabins available close in, he said.
James Cole, founder and CEO of Panache Cruises, has also noticed a modest increase in the average price paid per cruise along with “exceptionally strong sales,” with triple-digit growth across ocean, river and expedition cruising. He also noted strong luxury cruise demand in all areas aside from those impacted by the conflicts in the Middle East.
Alex Sharpe, CEO of Signature Travel Network, said Wave pricing is up both on a same-cabin basis and due to price premiums commanded by new ships like Royal Caribbean International’s Icon of the Seas.
Signature is seeing particular strength in Europe and Alaska sailings, he said, but “these new ships in the Caribbean are indeed a home run!”
Courtesy of Travel Weekly
