ABTA's Senior Public Affairs and Research Manager Stephen D'Alfonso spoke at this week's PSA conference, here he gives us an insight into the cruise industry.

The travel industry is constantly evolving. Our capacity for change is part of our genetic makeup, and our industry has been at the cutting edge of how retailers can and should respond to a changing marketplace.                                                              

As the Passenger Shipping Association (PSA) winds down after 19 years and transforms itself into CLIA (Cruise Lines International Association) UK & Ireland, change is certainly afoot in the cruise sector.

As a sector, the cruise industry has seen phenomenal growth since the launch of the PSA in 1994. I had the opportunity to attend and speak at this week’s PSA Conference in central London, where among other things, the annual Cruise Review was published. More than 1.7 million British passengers took an ocean cruise in 2012, up from 270,000 passengers when the PSA was launched in 1994. 2012 was a record year in spite of the Concordia tragedy and the sluggish UK economy, and the cruise sector now accounts for one in eight package holidays sold. It is poised for further growth in 2013.

The trends motivating consumers in their 2013 holiday choice are applicable to the whole of the holiday market – including cruise. In my presentation, I highlighted the sustained popularity of the package holiday for the security it brings; the hunt for the ‘good value’ holiday where customers can exert control of their budget; and the strength of the luxury holiday as three trends characteristic of the current market. Travel business, including cruise companies, are delivering what consumers want; yet challenges remain.

One of the key challenges I outlined at the PSA conference is Air Passenger Duty (APD). The unrelenting rise in APD since 2007 has not only impacted negatively on the traditional resort-based package holiday, but is increasingly impacting on cruise. The Cruise Review highlights how in 2007, 65 per cent of the cruise market was fly-cruise passengers, yet this has dropped to just over 50 per cent in 2012. A vibrant network of UK ports, as both points of call, and embarkation points, is to be welcomed of course. Yet fly-cruises continue to be a very popular consumer choice and further APD rises could impact negatively on the variety of product available.

Through this period of change, ABTA will continue to work with our cruise members and ensure they have a strong voice in Parliament, not only on APD, but on any Government policy that might influence our Members’ ability to grow and compete and the product that they are able to offer.