Millennials and Gen Z are the new 'golden' generation choosing cruises

For many years, cruising was considered a vacation for older people. This perception seems to be changing in recent years as more young people choose this type of vacation, driving demand and creating new opportunities for the industry.

Half of Royal Caribbean Cruises' passengers are millennials or Generation Z, making them the fastest-growing age group in the customer base, according to CEO Jason Liberty. Other companies are seeing similar growth, according to the Cruise Lines International Association: The average age of cruise passengers has fallen for two years in a row after virtually stagnating since 2016.

“Even honeymooners are asking about cruises,” says Eric Hruband, head of CIRE Travel in New York, whose cruise business has quadrupled in the past two years, a feat that would have seemed impossible just a few years ago.

The biggest beneficiary of the shift has been Royal Caribbean, which has emerged from the pandemic faster than its peers. Its stock price has risen nearly 600%, well above its coronavirus-era low in March 2020. Carnival shares have risen 88%, while Norwegian Cruise Line Holdings shares have risen 142%.

Two new Royal Caribbean ships, the largest in the world, with luxury restaurants and Adults-only areashave helped the company attract a wider audience, says Patrick Scholes, CEO of Truist Securities. The company’s profits in 2024 will be 50% higher than before the pandemic, according to data compiled by Bloomberg, while its peers’ profits will fall by about the same percentage.

In any case, cruising is making a strong recovery. Cruise ships carried 31.7 million passengers last year, up 7 percent from 2019, according to CLIA. International tourism fell 12 percent over the same period.

Cruises accounted for 7.2 percent of U.S. tourist spending this year, up from 5.8 percent in 2019, Bank of America Institute senior economist David Tinsley wrote in a report last May, noting that the rise in cruises is “hurting” hotel occupancy to some extent.

The biggest appeal of cruising for people in their 20s and 30s is that The cost-to-service ratio is usually cheaper than other holiday options. “There's no more affordable way to really see the world,” said Melissa Newman, a university professor and cruise blogger who has visited 30 countries on more than 20 cruises over the past nine years.

According to Norwegian Cruise Line, the price to book a cruise in 2023 was 40% lower than a similar vacation. Industry analysts estimate that figure to be around 20%, again well above historical averages.

New cruise passengers, which are up 12% in 2022 and 2023 compared to the previous two years, are often informed via social mediaAccording to Deloitte's 2024 Travel Forecast, 42% of Gen Z travelers and 26% of millennial travelers use video content on social media to plan their trips (compared to just 12% of Gen Xers).

A big advantage of cruising is that the package price includes food, drinks, etc. According to the NerdWallet Travel Price Index, as of January 2023 Vacation spending is 13% higher than before the pandemic.

The cost of eating out or renting a car has increased by more than 20% since 2019And while airfare prices have remained relatively unchanged, tickets are less likely to include carry-on luggage and other amenities as they once did.

The growing interest from young people comes at a better time for the cruise industry, given the debt it was saddled with in 2020 and 2021 due to the pandemic's “life-freezing” impact. “I don't think it's a fad or a trend. I think it's how this group of customers wants to experience this right now [проведения отпуска]”I believe the trends we are watching are fundamental changes in consumer behaviour,” said Virgin Voyages' Saverimuttu.

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