The world’s biggest cruise groups are pouring money into private destinations for their customers as booming demand rubs up against a backlash against overtourism in many popular spots.
The biggest operator, Carnival, is in the midst of developing the $600mn Celebration Key on the island of Grand Bahama. The “first-ever exclusive destination to be purpose-built” for the company will open next year.
Meanwhile, rival Royal Caribbean is planning to spend a similar amount building the 200-acre Perfect Day Mexico resort on Mexico’s Caribbean coast in Mahahual. It will have beaches, water parks and other entertainments and is scheduled to open in 2027.
Another major operator, Norwegian Cruise Line, is building a two-ship pier to its own private island Great Stirrup Cay to allow it to double visitor numbers to 700,000 from 2026.
By 2025 passenger capacity at cruise company-owned private islands in the Caribbean will have more than doubled from 2019, according to Christian Savelli, cruise analytics director at Tourism Economics.
The industry is hoping to emulate the success of Royal Caribbean’s Perfect Day CocoCay private island, which reopened in 2019 after a $250mn redevelopment. Barclays’ analysts attribute a nearly 8 per cent rise in the cruise operator’s net yield — the main industry measure of profitability — to this relaunch.
“One of the value points of us adding more [of] these destinations or creating them is to really spread or distribute our guests more broadly,” chief executive Jason Liberty told the Financial Times. This can help reduce congestion in traditional hotspots.
Royal Caribbean is also developing two beach clubs on islands in the Bahamas and Mexico to be opened by 2026, which are smaller than the larger Perfect Day resorts.
The Miami-based cruise line is “taking pressure off of the system . . . [by] putting up new experiences” for its guests at destinations where otherwise “there is not enough to do”, Liberty added.
“You deliver the experience, you have the [passenger] volume, and people want to pay more money to go to those destinations. So we see a higher return profile on the destination than we do on the ships.”
Norwegian chief executive Harry Sommer recently said the new pier on Great Stirrup Cay should ultimately generate “higher guest satisfaction, higher revenue, higher repeat rates [that] becomes a virtuous cycle”.
Operators are spending money to build their own resorts as they try to balance a rise in demand since the pandemic and a backlash against the growing number and size of cruise liners in crowded tourist destinations.
In 2023, 31.7mn people worldwide went on cruise trips, up 7 per cent from 2019, according to the Cruise Lines International Association. It expects passenger numbers to have reached 39.7mn by 2027. Carnival, Royal Caribbean and Norwegian all recently increased their profit forecasts for this year, driven by rising bookings.
Savelli said passenger numbers were growing faster in the Caribbean than in all other major regions including the Mediterranean, driven by the popularity of private resorts.
While more people want to go on cruise trips, fewer locals are happy to see big ships full of people in places that already have a lot of tourists.
Larger cruise ships have been banned from docking in Venice and earlier this year the city started charging day-trippers an entrance fee of €5. In September, authorities in Ibiza announced that no more than two cruise ships would be allowed to dock at the same time. Alaska is set to impose a cap on the number of cruise passengers visiting the major port of Juneau from 2026.
Royal Caribbean’s Liberty played down congestion caused by cruise ships, blaming Airbnb and local population growth instead. But Bob Levinstein, chief executive of cruise holiday marketplace CruiseCompete.com, said overtourism worries had “cruise lines thinking more seriously about how they can have more control over the destinations, and private islands are a smart way to do that”.
You must be logged in to post a comment Login