River cruise operators: COVID-19 challenges and near-term headwinds
Some of the key trends for river cruises include attracting younger generations, from mid-20 to 30 year olds, which has “opened up a lot of revenue”. What’s more, “they’re also lowering the age group for river cruising from about mid-60s down to about the mid-40s.” One benefit of targeting more generations is a stronger recovery potential. “The more the age groups that you can go after, the better you can rebound and more steady a company can be.”
River is one of the fastest-growing segments in cruising and, before coronavirus hit, 2020 was forecasted to be a strong year. There has been strong demand, with most ships running at almost full capacity before the pandemic. “We’ve seen people are already encouraged and want to book a cruise as soon as this pandemic is over, for either later this year or next.”
What needs to happen before operators restart was also discussed, including potential difficulties. Alongside adopting new practices, such as thermal cameras and social distancing, broadcasting this to the public will be important. In addition, Viking issued a press release about its cancellation policy, offering both refunds and 125% credit. The specialist believes that most people opt for vouchers, which helps keep money within the company.
The main two competitors are AmaWaterways, which has “probably one of the best ship designs for rivers on the market”, and Uniworld, which is targeting Millennials with its U brand. Another notable player is Silversea. Although Viking is considered luxurious, Silversea is higher-end and more of a competitor on the ocean side.
To access all the human insights from Third Bridge Forum’s Viking Cruises – Coronavirus Impact on River Cruise Industry & Long-term Challenges Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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