4 andy moody cne presentation

BREA

Canada/New England Cruise MarketCanada/New England Cruise Marketandand

Summer/Fall Travel ExpectationsSummer/Fall Travel Expectations

Presented by

Andrew J. Moody, Ph.D.

Canada/New England Cruise SymposiumCanada/New England Cruise SymposiumNew York CityNew York City

June 16, 2011June 16, 2011

BREA

Canada/New England Cruise MarketCanada/New England Cruise Market

BREAwww.breanet.com Slide 3

Canada/New England MarketCanada/New England Market

• Over the past decade the Over the past decade the bedday capacity and bedday capacity and passenger arrivals in the CNE passenger arrivals in the CNE market has almost doubled.market has almost doubled.

• The CNE share of global The CNE share of global capacity has been fairly capacity has been fairly stable between 1.5 and 2%.stable between 1.5 and 2%.

• Its growth has come in spurts Its growth has come in spurts with increases in excess of with increases in excess of 30% in 2000, 2004 and 2007.30% in 2000, 2004 and 2007.

• Since 2008 capacity has Since 2008 capacity has remained fairly stable but remained fairly stable but passenger arrivals have passenger arrivals have increased by more than 10%.increased by more than 10%.

Cruise Capacity in the Canada/New England Market

Source: Cruise Lines International Association


Canada/New England MarketCanada/New England Market

• Since 2002 passenger Since 2002 passenger embarks in CNE have more embarks in CNE have more than doubled.than doubled.

• The CNE share of embarks The CNE share of embarks in North America has in North America has increased from 6.4% in increased from 6.4% in 2002 to10.2% in 2010.2002 to10.2% in 2010.

• Its growth has also come in Its growth has also come in spurts with increases in spurts with increases in excess of 20% in 2003, excess of 20% in 2003, 2004 and 2010.2004 and 2010.

• Growth leaders have been Growth leaders have been New York and Baltimore, New York and Baltimore, especially over the past two especially over the past two years.years.

Embarkations in the Canada/New England Market

Source: Port Authorities


Passenger ExpendituresPassenger Expenditures

• Atlantic Canada PassengersAtlantic Canada Passengers– More than 95% of passengers report going ashore for an average of 4.7 More than 95% of passengers report going ashore for an average of 4.7

hours.hours.

– 85% of these passengers reported purchasing a shore excursion at an 85% of these passengers reported purchasing a shore excursion at an average cost of $53 per passenger.average cost of $53 per passenger.

• 84% of shore excursions were purchased from the cruise lines.84% of shore excursions were purchased from the cruise lines.

– Passengers that went ashore spent an average of $93 per passenger.Passengers that went ashore spent an average of $93 per passenger.• Tours, clothing and souvenirs account for 80% of the onshore expendituresTours, clothing and souvenirs account for 80% of the onshore expenditures

• New York PassengersNew York Passengers– Almost half (46%) of embarking passengers have a pre- or post-cruise stay Almost half (46%) of embarking passengers have a pre- or post-cruise stay

of 2 nights.of 2 nights.

– Passengers with an overnight stay spend an average of $437 per passenger Passengers with an overnight stay spend an average of $437 per passenger during their visit.during their visit.

• Lodging ($274) and food and beverages ($65) account for 75% of their expenditures.Lodging ($274) and food and beverages ($65) account for 75% of their expenditures.

– The average expenditure across all passengers is $213.The average expenditure across all passengers is $213.

• 7-Day Itinerary (4 calls) - $585 of onshore expenditures per pax7-Day Itinerary (4 calls) - $585 of onshore expenditures per pax– 3,000 passenger ship will generate $1.75 million in total passenger 3,000 passenger ship will generate $1.75 million in total passenger

expendituresexpenditures


CNE Passenger Source MarketsCNE Passenger Source Markets

• Passengers cruising in the CNE market are sourced from around the Passengers cruising in the CNE market are sourced from around the globe….but more than half reside in the northeast quadrant of the globe….but more than half reside in the northeast quadrant of the U.S.U.S.

• Survey data from 2007 for Atlantic Canada ports showed:Survey data from 2007 for Atlantic Canada ports showed:– 60% of passengers lived in the northeast quadrant of the U.S.60% of passengers lived in the northeast quadrant of the U.S.– 30% lived elsewhere in the U.S.30% lived elsewhere in the U.S.– 10% resided outside of the U.S.10% resided outside of the U.S.

• Survey data from 2010 for New York showed:Survey data from 2010 for New York showed:– 50% of passengers lived in the northeast quadrant of the U.S.50% of passengers lived in the northeast quadrant of the U.S.– 35% lived elsewhere in the U.S.35% lived elsewhere in the U.S.– 15% resided outside of the U.S15% resided outside of the U.S

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Summer/Fall Travel ExpectationsSummer/Fall Travel Expectations


Household Finances and the Household Finances and the EconomyEconomy

• Household finances have not improved much over Household finances have not improved much over the past year.the past year.

– Three-fourths of the respondents feel that their personal Three-fourths of the respondents feel that their personal financial condition is either the same or worse than a financial condition is either the same or worse than a year ago.year ago.


Household Finances and the Household Finances and the EconomyEconomy

• Households are not particularly optimistic about Households are not particularly optimistic about the short-term future.the short-term future.– Better: 25%Better: 25% Same: 39%Same: 39% Worse: 33%Worse: 33%

• Only 30% of the respondents reported that their Only 30% of the respondents reported that their average monthly expenditures have increased average monthly expenditures have increased from year ago.from year ago.– Better: 35%Better: 35% Same: 33%Same: 33% Worse: 24%Worse: 24%

• Purchases of necessities are crowding out Purchases of necessities are crowding out spending for more discretionary items.spending for more discretionary items.

– More than half of the respondents reported spending More than half of the respondents reported spending less on entertainment, durable goods and vacations.less on entertainment, durable goods and vacations.


Vacation Planning for the Next 6 Vacation Planning for the Next 6 MonthsMonths• A higher percentage are planning a vacation this year relative A higher percentage are planning a vacation this year relative

to last year.to last year.– Respondents reported planning an average of two 4-day or Respondents reported planning an average of two 4-day or

longer vacations.longer vacations.

– However the percentage drops for those whose financial situation However the percentage drops for those whose financial situation has worsened.has worsened.

• Most respondents (59%) said that gasoline prices have had a Most respondents (59%) said that gasoline prices have had a negative impact on vacation plans.negative impact on vacation plans.– Cancelled vacation: 20% Cancelled vacation: 20% Spend Less or shorten vacation: Spend Less or shorten vacation:

22%.22%.


Destination PlanningDestination Planning• Canada/New England is the planned destination for Canada/New England is the planned destination for

21% of the respondents.21% of the respondents.– About 85% of these will travel to New England.About 85% of these will travel to New England.– U.S. is the largest destination market.U.S. is the largest destination market.– 14% will travel to the Caribbean or Mexico.14% will travel to the Caribbean or Mexico.

• Most vacationers will travel by car to their destination.Most vacationers will travel by car to their destination.– CNE has the highest percentage travelling by car (80%).CNE has the highest percentage travelling by car (80%).– 7% said they will cruise to CNE.7% said they will cruise to CNE.– Caribbean and Mexico have the highest percentage of Caribbean and Mexico have the highest percentage of

cruisers (49%).cruisers (49%).


Vacation AttributesVacation Attributes• Nearly two-thirds of the vacation parties will consist Nearly two-thirds of the vacation parties will consist

of one or two persons. (Mean = 2.6).of one or two persons. (Mean = 2.6).

• Just under half of the vacations will be for one week Just under half of the vacations will be for one week or longer. (Mean = 6.8 days)or longer. (Mean = 6.8 days)– CNE vacations average one less day.CNE vacations average one less day.


Cost of VacationCost of Vacation• The typical vacation is expected to cost $2,220 per party, or The typical vacation is expected to cost $2,220 per party, or

$822 per person and $120 per person day.$822 per person and $120 per person day.– Travellers to CNE will spend an average of $1,365 per party.Travellers to CNE will spend an average of $1,365 per party.

– The Caribbean and Mexico have the highest spend of $3,345 per The Caribbean and Mexico have the highest spend of $3,345 per party.party.

• Vacations involving travel by air and cruise ship are the Vacations involving travel by air and cruise ship are the longest and most costly.longest and most costly.– Air Travel: $3,781 or $202 per person per day.Air Travel: $3,781 or $202 per person per day.

– Cruise: $3,280 or $142 per person per day.Cruise: $3,280 or $142 per person per day.


Other Cruise DataOther Cruise Data

• Just over one-fourth (27%) of the respondents Just over one-fourth (27%) of the respondents reported taking a cruise in the last three years.reported taking a cruise in the last three years.– One: 13%One: 13% Two: 6%Two: 6% Three:4%Three:4% Six +: 1%Six +: 1%

• Cruise interest greatly exceeds actual cruises.Cruise interest greatly exceeds actual cruises.– More than half said that they would consider a CNE More than half said that they would consider a CNE

cruise.cruise.