River Cruises Beyond Europe
(Article originally published in Jan/Feb 2017 edition.)
From January/February 2017 Edition
New markets in North America and Asia extend the reach of popular river cruising.
River cruising has taken off in recent years with new buildings coming on stream in record numbers. And why not? For those leery of ocean cruising and who want to stay close to shore, river cruising is the perfect ticket. Not only is it safe, it gives you easy access to city centers and scenic panoramas alike. It’s easygoing pace appeals to an older, more sophisticated and affluent audience. And it provides the intimacy and privacy so lacking on today’s mega cruise ships.
While most river cruise companies specialize in this sector alone, there is now some crossover from those involved in ocean cruising and vice versa. Crystal Cruises, for example, is building river ships, and Viking has added ocean cruising to its portfolio. Likewise, some cruise lines with smaller-tonnage vessels sail rivers, for example, Fred Olsen Cruise Lines.
Walter Littlejohn, Vice President and Managing Director of newcomer Crystal River Cruises, comments on the cross-fertilization: “For Crystal, our first five ships are deployed on the Danube, Rhine, Moselle and Main rivers. In the future we see opportunities on other rivers in Europe and particularly in France. Crystal sources globally, and on our river cruises we’re seeing the same sort of global mix as on our ocean cruises with guests originating from North America, Asia, Europe and South America.”
Europe remains by far the largest river cruise market, but new tonnage is being added to rivers worldwide. From the Amazon to the Zambezi to the Yangtze, the choices are varied and farflung. Meanwhile the Nile, once so popular, has suffered badly due to security fears, and in Russia the market has been depressed by ongoing political tensions with the West.
In 2016 there were a total of 47,200 berths in service on the nine navigable waterway systems in Europe: the Rhine and Danube, Rhone, Seine, Gironde, Douro, Elbe, Loire, Po and Guadiana (Odiana). This figure, representing nearly 40 percent of the world total, is projected to reach 50,000 this year, according to cruise consultancy G. P. Wild (International), which says the river fleet comprises some 321 ships with an average capacity of 142 berths (double-occupancy).
Comparing river and ocean, the consultancy states there are ten times as many berths in service this year on the ocean-going fleet as on the European river fleet. But rivers have grown faster. In the last ten years, the river fleet has doubled in size from 24,768 to 49,734 lower berths while the ocean-going fleet has increased by 50 percent from 319,050 to 479,101.
In terms of passengers, North America is the leading source market for river cruising in Europe (as it is for every other cruise market), followed closely by Germany. Other significant markets are France, the U.K. and Australia. In 2015, North America as a source market for river cruising in Europe reached some half a million passengers, more than double the market’s capacity in 2007.
Germany derives its prime position from a large domestic fleet aided by the close proximity of at least three major navigable rivers. From 2004 to 2014 passenger numbers in Germany grew 36 percent. Over the same period, U.K. growth from a much lower base was 25 percent. It should be noted that variations in numbers over a given period of years are not always a reflection of demand but can be caused by supply problems arising from climactic conditions, which may lead to low water levels in rivers.
The leading player with a total of 56 ships and 21 percent of the market is Viking River Cruises, which markets to the English-speaking world. The second player, with nine percent of the market, is CroisiEurope, which markets principally to the French-speaking world but also sells in places like the U.K.
Of equal size with roughly five percent of the market each are AMA, Uniworld and Avalon, all of which sell into the English-speaking world and focus on North America. Companies like Tauck, Scenic, Vantage, Grand Circle and Emerald Waterways are players geared toward the high end of the market.
G. P. Wild owner Peter Wild notes that “It can readily be concluded from the growth rates on the various European river systems in recent years that they all have enjoyed good margins. Indeed, in 2014 the fleet was operating at near capacity for much of the season. In 2015, however, there was some slackening of demand, and a later pattern of booking resulted in early season sailings being under-occupied. This was compounded by the Charlie Hebdo incident in Paris, which resulted in some cancellations, particularly on Paris-based sailings.”
He adds that “The unfortunate events in both Paris and Brussels early in 2016 have again resulted in disappointing bookings on sailings including Paris or Paris as a final destination.”
On a similar note, Crystal’s Littlejohn observes that “Based on guest feedback [re Paris and Brussels], we opted to delay our entry into the French river cruise market by redeploying Crystal Debussy and Crystal Ravel to the Rhine and Danube rivers. Consumers are resilient, and we see this move as just a delay as we will ultimately be in those markets one day.”
Some 18 ships are scheduled to enter service in 2017 offering 2,532 lower berths, an increase of more than five percent over 2016 should there be no withdrawal of older tonnage. The Douro River on the Iberian Peninsula figures prominently in terms of customer appeal with four new ships. New-entrant cruise lines Crystal, Riviera Travel and Emerald account for half of the new ships on order.
Littlejohn says that Crystal’s biggest challenge in entering and expanding in the river cruise sector has been finding an equivalent level of luxury that its guests expect and are accustomed to on its ocean cruises: “True luxury amenities and services really haven’t been present in the river cruise industry, and Crystal’s standards and expectations are very high. Finding partners and employees that understand and embrace those standards is not simple, but it’s also not impossible. We’re managing this challenge well, and we’re excited about expanding our team and partner network as our fleet grows.”
North America & Asia
Looking beyond the European waterways, there is no doubt that the taste for river cruising is on the increase. Recent newcomer French America Line recently began sailing on the Mississippi with Louisiana while Strand Travel began sailing Strand on the Irrawaddy/Ayeyarwady in Myanmar. Both represent added competition, demonstrating that there is room for more tonnage and choice on these rivers and that the sector’s boundaries continue to expand.
Looking east, companies such as Avalon, AMA and CroisiEurope are adding ships to the Mekong, but operators are also moving into much less well-known territories such as Pandaw on the Chindwin (a tributary of the Irrawaddy), the Tonlé Sap lake and river in Cambodia, and the Brahmaputra River in India. Viking will be putting its first ships this year on the Yangtze in China, where Victoria Cruises has long been operating.
In the U.S., American Queen Steamboat Company will be adding the 166-passenger American Duchess to its U.S.-flagged American Queen and American Empress in June. Completely reconstructed from a 1995 hull, the company describes the new, all-suite American Duchess as “combining the best of the old and the new” and “epitomizing the grace and grandeur that have made river cruising a cherished American tradition for more than two centuries.”
Adds President & COO Ted Sykes, “American Queen Steamboat Company has led the way in a rebirth of U.S. river cruising as thousands discover our heartland and the Pacific Northwest, served by an award-winning, all-American crew. Demand for more capacity on the Mississippi River has been overwhelming the past two seasons, and we look forward to delivering a new boutique, all-suite experience and the flexibility of two riverboats sailing between New Orleans and Minneapolis.”
Last year American Cruise Lines’ America and Queen of the Mississippi and American Queen Steamboat Company’s American Queen made 48 calls to the Port of New Orleans, bringing 22,188 passengers, a 40 percent increase over 2015. River cruises are becoming a prominent segment of the port’s cruise portfolio, which last year totaled over a million passengers, the sixth straight record year.
“The cruise industry is responsible for $406 million in spending in New Orleans,” says Matt Gresham, Director of External Affairs at the port. “It supports 8,120 jobs and accounts for $324 million in personal income.”
Other ports are benefiting as well. In Amsterdam, river cruising is one of the fastest growing sectors within the city’s tourist industry. To ensure that the growing number of cruise passengers can enjoy the city 24 hours a day and in response to some reported burglaries, extra surveillance in the port area is being provided during the night.
“Nowadays, security is a much talked-of issue,” says Koen Overtoom, interim CEO of the port. “Together with the river cruise companies, we are going to research how we can further explore this subject in depth in anticipation of future developments. In any event, we will take the lead both this season and next to ensure an optimum customer experience for our visitors.”
By Susan Parker
Susan Parker is a cruise correspondent based in the U.K.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.