Analyst Savelli picks luxury and premium orders to fuel growth in the Med

The ocean cruise ship orderbook has seen strong activity in 2024 but new orders show an over-representation of mega vessels and small vessels, squeezing the mid-size segments in-between, shared Savelli.

While the Caribbean will absorb the additional mega ship capacity, the rapidly growing luxury sector will fuel growth in the wider Med region, alongside the so far under-represented premium segment.

The seasoned industry expert told the audience at Seatrade Cruise Med he is optimistic about the cruise industry's overall perspectives.

He believes steady economic growth should sustain travel activity, even more as inflation is coming under control and disposable income is expected to increase during 2025.

Luxury segment to grow 46% in next five years

Positive macroeconomic perspectives have contributed to recent orderbook activity, he noted, bringing the number of orders for new ocean cruise ships to 62 at the end of August.

Five large ships have been contracted this year in the Contemporary sector. According to Savelli, 23 orders currently account for this segment, along with 24 for luxury vessels, ten for premium vessels and five for expedition vessels.

Comparing orderbook capacity with the active fleet capacity, it becomes evident that the luxury segment is growing most significantly - by 46% over the next five years.

The contemporary and premium sectors are facing a 17% increase each, while expedition cruising is expected to grow by 14%. Correspondingly, the orderbook share per vessel size shows a gap: Looking at the full orderbook with deliveries up to 2036, 58% account for megaships carrying more than 4,500 passengers. Small vessels below 1,000 passengers account for another eleven percent - the mid-size segment in-between accounts for just 31% of the orders, against a 75% share of the active fleet today.

Premium and luxury segments up in the wider Med region

Analysing the impact of the current orderbook status for the wider Mediterranean region, Savelli illustrated that the luxury and premium segments are currently fuelling growth while the contemporary segment is stable.

From 2023 to 2025, Savelli expects the luxury sector to grow by a stunning 56% up to 3.7m available passenger cruise days, while the premium sector will grow by 13.5% up to 7.0m days over the same period.

Regionally, the Atlantic Islands are seeing a sharp increase, while the Adriatic Sea is growing as well - obviously with a boost from the luxury segment. Looking at the market share per cruise segment, it becomes obvious that - despite the massive growth particularly of the luxury segment - contemporary vessels continue dominating the Mediterranean market. In 2024, this sector accounted for a 74% share Mediterranean-wide, with the premium sector (15%) and luxury (7%). Regionally, the luxury sector's deployment is largest in the Adriatic accounting for 12%.

Savelli regularly contributes an orderbook commentary White Paper - see pages 26-29 in September issue for Seatrade Cruise Review.