The Middle East cruise industry is poised for continued growth with the 2024-2025 season set to attract over one million cruise tourists to the Arabian Gulf through key ports including Dubai, Abu Dhabi, Doha, and Jeddah, a great testament to the region’s expanding maritime tourism sector. Saudi Arabia is the fastest growing regional market, projected to reach $89.5 million by 2030 and expected to register the highest CAGR over the next five years.
Aside from well-known international cruise lines such as Royal Caribbean, MSC Cruises, Costa Cruises, TUI Cruises Virgin Voyages, and Celestyal Cruises, the region now has its very own first homegrown cruise brand, AROYA Cruises, which cruises from Jeddah in Saudi Arabia. The sector is supported by the Cruise Arabia Alliance, established in March 2024 by the maritime and tourism authorities from Dubai, Abu Dhabi, Bahrain, and Oman. This partnership aims to promote the Arabian Gulf as a premier global cruise destination by enhancing port infrastructure, improving passenger experiences, and attracting more cruise lines to the region. With the growth and development of the cruise sector in the region, the landscape is increasingly competitive. Interestingly enough, despite the industry’s ability to deliver millions of memorable passenger experiences every year, cruise lines have been comparatively slow to adopt the shift in tools and philosophy needed to maximize revenue from their cabin accommodations. The result? A vastly competitive environment with cruise lines willing to undervalue ticketing to ensure a ship full of passengers who’ll (hopefully) spend enough onboard to cover the difference and then some. It’s a tough balancing act filled with missed revenue opportunities. And it’s one we believe can be fundamentally shifted through the use of similar, tried-and-true revenue science principles widely adopted across airlines and hotels. One of the key challenges is the inability to effectively forecast demand. A cabin ticket can’t be sold after the ship departs, resulting in cruise lines focus in filling ships and maximizing onboard spending, rather than maximizing revenue across cabin categories. Predicting premium cabin demand early could improve pricing and promotions. Revenue management systems, used in hotels and airlines, enhance financial performance by analyzing demand and adjusting prices, distribution, and promotions for smarter, category-specific pricing. In addition to forecasting demand, cruise lines often need more defined market segments that group similar booking (and spending) behaviors. Revenue management can look at factors such as booking channel, product offerings (and conditions), source market and agency vs direct bookings which can serve as key indicators for segmentation-based forecasting. With enough insight into segment-based demand, cruise lines can develop strategies that ultimately lead to getting the most valuable mix of passengers on board as possible. But there’s just one problem-it takes a ton of time-consuming, error-prone work to make this happen manually or extensive staffing and high labor costs that typically only the large lines can take of. Particularly at the scale and frequency needed to respond effectively for an entire fleet of ships booking months or years in advance. To pull off the necessary data crunching and subsequent shifts in selling strategy effectively, cruise lines need to enlist the power of advanced automated tools. By harnessing revenue management technology, cruise lines can navigate the tides of an ever-evolving industry, optimizing performance across their vast and diverse itineraries. By ensuring each route and cabin is dynamically priced with precision, they can maximize profitability while delivering smooth sailing and unforgettable experiences for passengers. By Crystal Pernici, Global Director, IDeaS Cruise RMS