Online cruise distribution remains one of the remaining untapped vanguards among all online travel. With more than $40 billion in annual revenues and approximately 75% of bookings still conducted offline, according to our analysis, digitalizing the cruise industry represents an exciting growth opportunity.
Due to the extraordinary product complexity – with a vast menu of destinations, ships, cabin types and the necessity to often package flights, transfers, cruises as well as pre- and post-nights – global online travel agencies have yet to establish themselves as significant players in the cruise holidays space.
This unique market dynamic has allowed a few regional players to develop single-digit / low-double-digit percentage market shares in their fragmented local markets. Examples include Iglu and Cruise.co in the United Kingdom and Cruiseline in France, but even those players are still mostly reliant on call center sales and large manual back-office operations.
“Customers want and need a truly end-to-end online booking platform for cruise holidays” said Detlev Schäferjohann, the founder of e-hoi, the leading European cruise OTA based in Germany which has already expanded across eight markets in Europe.
“A fully integrated technology solution like our enables a high degree of personalization, driving 'touchless' bookings and conversions and automate fulfillment and production. In addition, as customers look for ease and convenience, dynamic packaging enables them to book the entire trip, including hotel, flight, transportation and the cruise itself in one booking.”
This clear trend towards online bookings perfectly mirrors the dynamics witnessed over the past two decades in other travel segments, including flights, accommodation and package holidays where online bookings now represent 63%, 54% and 52% of the overall market respectively, according to our analysis.
This digitalization trend accelerates a buoyant cruise industry that grew by 150% between 2003 and 2019 and has rebounded impressively after COVID, where the market surpassed its 2019 levels in 2023. Customers appreciate the high value-for-money factor, high degree of comfort, convenience, experience and versatility a cruise holiday offers.
Strong underlying growth is underpinned by the growth of the silver generation in the U.S. and Europe as well as an increasing participation from millennials, Gen X and Gen Z in the cruise holiday market. This is complemented by the continued wave of new cruise ships being commissioned around the world.
Despite the massive opportunity, currently there is not a one single global online cruise distribution platform.
“We are determined to change that” added Detlev. “Our strong focus on technology has allowed us to conclude seven acquisitions across Europe and migrate those businesses in efficient post-merger integration processes 100% onto our platform, enabling tremendous synergies and growth levers. Dynamic packaging and automation of back-office are key to the realizing economies of scale and deliver superior profits.
We are currently growing organically at 20% per year, and we are eager to pursue several acquisitions in Europe as well as in North America, which will benefit from our technology and commercial engine. We are eager to get to a one billion total transaction value over the next 18 months.”