On Trend: River Cruises

You don’t have to be marketing the cruise industry to admire what’s going on in the river cruise category. It’s red hot and while still only a small slice (roughly 5%) of the cruise market, it’s the industry’s fastest-growing segment — enjoying double-digit growth and attracting over one million passengers a year. CLIA reports that their members alone will add 18 new river cruise ships this year.

As other categories of travel struggle to find significant new growth opportunities, river cruises are riding a wave of popularity that should carry them forward for years to come. A closer review of the industry reveals an evolving product that is well-positioned to connect to consumer trends and capitalize on shifts in the marketplace.

While it seems that everyone is chasing after Millennials, river cruises are taking advantage of the world’s aging population. The sweet spot for river cruises is the established and well-heeled 50-70-year-old audience with the financial wherewithal to afford the higher rates river cruises tend to charge. And, while they represent only 32% of the U.S. population, this 50+ audience controls 77% of America’s total net worth and has nearly $46 trillion of its wealth. By 2030, more than one in three Americans will be over 50. Just as significant, half of the populations of Germany, Italy and Japan will also be over 50, as will 40% of people in China. 



Equally important, this older traveler tends to be more seasoned and experienced and is now looking to discover places they’ve never been and to experience familiar destinations in totally new ways. The river cruise experience has the ability to appeal strongly to both desires.

With the average size of a river cruise numbering 200 passengers or fewer, it’s a product that speaks to a growing consumer shift away from mass appeal to things that feel bespoke, real and intimate. By comparison, most of the major ocean cruise lines now seem to be locked in a race to create and promote ever-bigger mega-ships that carry 3,000-6,000 passengers and are positioned as amusement parks and entertainment cities at sea. 

These massive ocean liners are the destination and they’re truly larger than life. They’re all about the floating experience, endless onboard amenities and activities that help the whole family to connect. Ports of call are really secondary to the overall marketing story. On a river cruise, the experience is just the opposite — the destinations are the stars and it’s much more about the land-based activities in the places you visit, the unique access and perspective the ship provides, the human scale and the calmer and more sophisticated style in which it’s all delivered.  

This stark contrast in style and focus helps to significantly differentiate river cruising from its ocean- going brethren and it’s fueling growing interest among cruisers and non-cruisers alike who want something that feels more personalized and unique.

Of course, a significant element of the river cruise industry’s growing attraction is the abundance of new product. One-third of all river cruise ships have been built in the past 10 years, and more than a quarter within the last five years. These have tended to be very beautiful, modern, sleek ships with high degrees of design and comfort built into their aesthetic. They’ve redefined river cruising with such features as larger cabins, more outdoor balconies, multiple dining options and elaborate spas. In fact, the recent TV ads from Avalon Waterways feature the unparalleled views from floor-to-ceiling windows in each stateroom.

Among the smart decisions the industry has made is to embrace all-inclusive pricing. Sure, it’s a premium-priced product, but most of the operators have wisely eschewed the extra charges that drive up the cost of ocean cruises and drive down customer satisfaction. By including the cost of food, drinks, land excursions and more, river cruises have further differentiated themselves from other categories of cruising and created a greater sense of value and predictability that appeals strongly to today’s traveler. 

Another thing the river cruise lines are increasingly doing well is creating itineraries and experiences that connect well to the growing curiosities and interests of the marketplace: Farm-to-table dining; art-filled itineraries seeing the scenery painted by Van Gogh and Monet; bicycling through tiny towns. The ease and convenience of traversing across multiple destinations in Europe or elsewhere, without needing to pack and unpack or battle through airports or drive unfamiliar roads, is very appealing to the growing numbers of aging travelers who simultaneously say they want to have an adventure but don’t want any hassles, stress or inconvenience.

While a study by Mintel last year found that younger travelers viewed river cruises as “staid” and not family friendly, it’s clear that cruise lines are working hard to overcome those perceptions. Just look at AmaWaterways, which recently developed a partnership with Disney and announced that their “Adventures by Disney” river cruise programs scheduled for this year have already sold out.

Of course, no industry is perfect. And there is at least one major obstacle that can bring river cruising to its knees — weather. Too much rain and the rivers can rise so high ships can’t get under bridges. Too little rain and the ships bottom out. 

Mother Nature aside, the forecast for river cruises has never looked better.

1 comment about "On Trend: River Cruises".
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  1. Ronald Kurtz from American Affluence Research Center, February 17, 2016 at 7:38 p.m.

    Excellent article with good data. 

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