New-to-cruise will drive luxury growth

T HE next wave of growth in luxury cruising may not come from existing cruise passengers but from affluent travellers who already spend heavily on luxury hotels, private villas, safaris, wellness retreats and tailor-made holidays. That was one of the central messages from a McKinsey presentation delivered aboard Explora III, the newest ship in Explora Journeys’ fleet. The presentation took place during a preview journey from Civitavecchia, the port of Rome, to Barcelona ahead of the ship’s naming ceremony on August 1. McKinsey’s data showed that spending on luxury products was growing by approximately 3% a year, compared with 7% growth in luxury experiences. “Luxury, as all of us know, is shifting from product to experience,” Nicola Sandri, Senior Partner in McKinsey’s Milan office, said. He said luxury travel was growing by approximately 5% annually, outpacing the roughly 3,5% growth in both the broader luxury and travel markets. Compounded over time, that growth would almost double the luxury-travel market within 13 years. ‘Building a family legacy by connecting with family and friends’ featured on the wish lists of 47% of luxury travellers surveyed, rising to 57% among Gen Z and millennial respondents. Other leading priorities included discovering natural and cultural heritage, travelling more sustainably and supporting local communities. “70% of luxury consumers aged between 20 and 45 believe the journey matters as much as the destination,” Sandri said. Turning specifically to cruising, Filippo Gozzi, Partner in McKinsey’s Milan office, said global luxury-cruise passenger volumes had trebled over the past decade, rising from around 400 000 in 2015 to 1,2 million in 2025. This represented average annual growth of approximately 12%. Luxury-berth capacity had also nearly tripled, growing by approximately 11% annually over the same period. “This is sustained capital commitment – a strong vote of confidence in this category by shipowners,” Gozzi said. McKinsey expects luxury- cruise demand to grow by around 10% a year through to 2035, reaching approximately 2,7 million passengers. About 20 additional luxury ships are expected to enter service over the same period. Challenge “That creates a challenge. Every new ship will need more guests and, in particular, will need more new-to-cruise guests,” Gozzi said. “The next decade will be a storytelling, distribution and customer-conversion story.” McKinsey identified several potential customer groups, including professionals in their 40s and 50s seeking culture, wellness, premium experiences and seamless service; retirees who prioritise cultural experiences; elite hotel and airline loyalty members already accustomed to premium service; and multigenerational families seeking a holiday suited to different ages and interests. “There is no one archetype, and certainly not only the traditional cruiser,” Gozzi said. “Different profiles, but one expectation: seamlessness without sameness.” The potential market is also expanding. McKinsey projects that the number of wealthy individuals worldwide will grow from approximately 200 million in 2025 to 340 million by 2035 – an increase of around 140 million people. Luxury cruising nevertheless serves only a fraction of this market. Approximately 1,2 million people take luxury cruises annually, compared with an estimated global pool of 200 million luxury travellers. “Directionally, this is well below 1% of the estimated global luxury-traveller pool. Luxury cruising has tripled and has still only scratched the surface,” Gozzi said. For travel agents, this means looking beyond clients who already identify themselves as cruisers. “The industry should stop asking only, ‘How do we win more cruisers?’ It should ask, ‘How do we win more luxury travellers?’ “The next luxury cruiser may never search for a cruise. They may not follow cruise brands. They may not think of themselves as cruisers,” he said. Explora Journeys, the MSC Group’s luxury ocean travel brand, speaks of journeys rather than cruises, suites rather than cabins and guests rather than passengers. Its ships are intended to offer the space, service, dining and flexibility associated with a luxury resort while allowing guests to travel between destinations without repeatedly packing, unpacking and changing hotels. “Explora Journeys was really born to fill a white space in the market. We bring together the sophistication of the world’s finest hotels with the freedom and the perspective that only the ocean can offer,” said Anna Nash, President of Explora Journeys. “Luxury is a banned word. We like to talk about elegance and sophistication, but it’s truly how we make our guests feel. This unique positioning is resonating strongly, particularly with guests who are completely new to cruising.” South African high-end travellers are seeking more than lavish accommodation. Curated experiences, meaningful moments, health gains and exceptional service are becoming the true hallmarks of luxury travel. Luxury travel Anna Nash. Photo: Explora Journeys Explora III, the newest ship in Explora Journeys’ fleet. Photo: Explora Journeys To page 4