04/19/23

The German Cruise Market

A Growth Story

Stefan Mathias

-Projektmanager-

Peter Deilmann Reederei & Co. KG

Neustadt in Holstein

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German Cruise Market

Content:

1. Peter Deilmann Reederei GmbH & Co. KG

2. Development in figures

3. Simple breakthrough strategies for the German cruise market

4. Can short cruises accelerate market growth?

5. Trends and outlook

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German Cruise Market

1. Peter Deilmann GmbH & Co. KG (PDR)

• In operation: nine river cruise vessels and one ocean cruise vessel (MV Deutschland)

• All vessels flying the German flag – MV Deutschland the only cruise vessel registered in Germany

• German Cruise Tradition as registered trade mark

• For 35 years on the cruise market

• 40.000 guests per year

• Focus on ultra-luxury-segment

• MV Deutschland rated „5-star superior“ by DEHOGA

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2. Development in figures

Source: ”DRV Der Kreuzfahrtenmarkt 2007”. Figures from 2008 on are estimated.

Pax development German cruise market

254283

306331

392428

537

639

705

763

840

920

1000

379

583

-100

100

300

500

700

900

1100

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Gu

es

ts in

th

ou

sa

nd

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German Cruise Market

2. Development in figures

Average Age 48.9 years

Average Per Diem 201.5 €

Average Duration 9.35 days

Cruise Operator Pax 2007 %

AIDA 259,000 34

MSC 105,000 14

Costa 100,000 13

All the Rest 298,753 39

Total 2007 762,753 100

Conclusions:

• Shorter scheduled cruises attract younger target groups

• German market still discount resistant

• International major players gain market dominance

• Great opportunities for niche operators

• Growth strictly capacity driven

• Still only 1% of all Germans per year go on an ocean cruise (UK 2%, US 3%!!)

61 %

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3. Simple breakthrough strategy for the German market

3.a. Deployment of constantly increasing tonnage into German cruise ports

for embarkation/disembarkation

Example: Costa Croicieres

COSTA MARINA

Until 2005 from Kiel

28.000 GT

800 Pax

COSTA CLASSICA

2006/2007 from Kiel

53.000 GT

1.300 Pax

COSTA VICTORIA

2008 from Kiel

76.000 GT

1.900 Pax

COSTA MAGICA

2009 from Kiel

102.500 GT

2.700 Pax

Still missing in German ports: NCL, RCCL.......

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3. Simple breakthrough strategy for the German market (cont.)

3.b. Germans still prefer a “German” ship

Examples: AIDA, Phoenix, TUI Cruises...

AIDA

9 vessels until 2012

Phoenix

4 vessels in 2008

TUI Cruises

Former ”Celebrity

Galaxy” in 2009

Peter Deilmann

”Traumschiff”MV Deutschland

since 1998

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German Cruise Market

3. Simple breakthrough strategy for the German market (cont.)

3.c. Germans like variety of destinations

• Germans are experienced in travelling -> destination is often of same interest as the vessel!

• Germans have been everywhere -> add ports apart from mainstream, but with attractive cultural, historical and scenic spots to visit!

• German cruise guests become more active and self-organized -> focus on selection of shore excursions -> mix of traditional and innovative tours!

• As long as destinations count, smaller niche operators will still be successful (examples: Transocean, Hapag-Lloyd, Phoenix, Deilmann, Delphin, Plantours etc.)

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4. Can short cruises accelerate market growth?

4.1 Definition of “short cruising”

Cruises with duration of up to 4 nights

4.2 Chances and challenges of “short cruising”

Chances:

• Higher per diems and on-board spend

• Attracts cruise first timers (new target groups)

• Easy to sell

• Lower costs of logistics

• Event character (party cruises etc.)

• According to short- and city break travel trend

• Excellent promotion tool

Challenges:

• Strong competition from cruise-ferry operators (Color Line, DFDS etc.)

• High operational costs

• Too often -> wear-out effect

• Limited destinations

• Core market is regional, close to port

• High marketing costs

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4. Can short cruises accelerate market growth? (cont.)

4.3 Conclusions

Short cruises ….

• ... are suitable to enrich a cruise programme, but should not be offered too often

• ... attract new customers and cruise first timers to come on board (low risk)

• ... are a useful tool to operate special events at sea

• ... might be an opportunity to extend the summer season

• ... lack variation in itineraries

• ... need special marketing efforts as they lead to a higher number of cruises per year

• ... make only sense when starting from/ending at strong regional markets

• ... face stronger competition from cruise-ferry-offers and city-break opportunities than long cruises

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5. Trends and outlook

Limits of growth:

• Market potential in Germany is estimated to be 2 million passengers p.a. (2.5%)

• Price development due to rising costs -> price elasticity of demand?

• Climate development and political changes -> more no-sail areas?

• Do niche operators still have the financial power to increase and refurbish tonnage?

• Do new-builds become simply unaffordable? -> Steel and technical components up to 20% per year!

Fuel for growth:

• Societies of the Western world become older. Germany: Baby Boomers new cruise target group

• New-builds are highly innovative and operate with lower fuel costs per passenger

• Mass market orientation of large cruise operators -> marketing and sales intensified

• Travel trends: 50’s and 60’s -> era of individual travel by car, bus and rail

70’s to 90’s -> era of tour operator package tours by plane

00’s to ? -> era of cruising ??? !!!

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6. Aktivitäten zur besseren Nutzung des Kreuzfahrtbooms

Big ship day in Kiel

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Thank you for your attention and patience!!