Expedition Cruising – Goldmine or Bubble? Part 2


by Hans Lagerweij

A few years ago I wrote an article about the exceptionally fast developments in the expedition cruise industry. With 32 new ships on order at the time, this niche segment of the cruise market was facing a huge expansion and was positioned as “the next big thing in travel”. With such high expectations about future growth, I asked if Expedition Cruising was the goldmine promised or a “bubble”. Now a few years and one global pandemic later, it is a good time to reflect back on that question.



Needless to say, the COVID-19 pandemic hit the cruise industry hard, like every travel industry-related business. All expedition vessels were laid up for more than a year and future demand was heavily affected. And although the Western markets have recovered rapidly in the last year, the Asian markets, notably China, remain affected. Five years ago, China was seen as a big opportunity for the expedition cruise industry. However, the Chinese outbound market was closed for a long time, only recently reopening. At this stage it is unclear if the market will recover soon, or how fast. Indications are that a rapid surge is not expected.


While mainstream cruising was retiring older ships, this did not happen in expedition cruising. In fact, the nostalgia of the old expedition cruise ship experiences, and the loyal following of some of these older vessels have, leads to ships being reused over and over again. A great example is the famous 40-year-old Polar Pioneer, once retired by Aurora Expeditions, and now back on the scene. This means that most new ships are additional capacity, not replacing any old tonnage.


The only ships withdrawn from the market seem to be the Russian-owned scientific vessels and icebreakers. Though, this was not driven by the pandemic, but by the war in Ukraine and the pre-COVID insolvency of One Ocean Expeditions, an operator using mainly Russian scientific ships.



So how is the industry doing? Companies like Lindblad Expeditions and Hurtigruten recently announced record bookings, which sounds promising. At the same time, both companies have two additional vessels in service, so a record number of bookings is not just a great performance – it is a necessity to fill the ships. Informal chatter indicates most expedition ships operated last year with occupancy levels between 60 to 70%, significantly lower than five years ago. Both Hurtigruten and Hapag Lloyd (part of TUI Travel) reported occupancy levels in this range.
What is more worrying than the lower occupancy levels is the increase in incidents. Four travelers lost their lives in Antarctica last season, all 4 were American citizens. This led to formal investigations by the US Coast Guard. Without any in-depth knowledge of the individual cases, the number of fatalities is concerning, which could affect the reputation of the industry. Also, accidents like these, question the motives to travel to Antarctica, which is the prime destination of expedition cruises.


In the original article, staffing was highlighted as a potential issue “in 2020-2022 there will be a significant shortage in knowledgeable and skilled staff”. Unfortunately, this prediction came true, escalated by the pandemic. During the pandemic when ships were laid up, many ship-based staff had to accept jobs on shore, and after the ships returned to service, they were reluctant to return to the seas. Those returning to seas, especially the expedition team members, were welcomed by some significantly higher salaries, driven by the competition between companies. This added to the companies rising costs due to inflation.



The number of price-driven promotions currently offered in expedition cruising suggests that the segment is not a goldmine yet. The pandemic took a big toll on the industry, which has not fully recovered. Occupancy levels are not where they should be, while costs are significantly higher. However, there are new cruise segments that show promising growth, especially the area of “ultra-luxury yachts” offered by luxury hotel brands. The Ritz-Carlton Yacht Collection launched their first vessel, with two more ships on order. Four Seasons announced their entrance into the market, as well as Aman and recently Accor’s Orient Express. Expedition cruising is still regarded as a “new travel trend”, driven by more visibility and a bigger scale. One thing is certain; the small ship cruise industry will keep rapidly developing in the years to come.


Please note: This article contains the sole views and opinions of Hans Lagerweij and does not reflect the views or opinions of Guidepoint Global, LLC (“Guidepoint”). Guidepoint is not a registered investment adviser and cannot transact business as an investment adviser or give investment advice. The information provided in this article is not intended to constitute investment advice, nor is it intended as an offer or solicitation of an offer or a recommendation to buy, hold or sell any security. Any use of this article without the express written consent of Guidepoint and Hans Lagerweij is prohibited.


Learn how Guidepoint can help with your research needs