History of the cruise industry in Spain 1 – The annual growth rate between 1999 and 2004 has been close to 40%
In the 1970s, around 20,000 Spaniards chose a cruise for their holidays. This figure remained almost constant until the mid-1990s, when a sustained growth of 10% began. In 2001, for the first time, the number of Spanish cruise passengers reached 115,000. The growth was spectacular: more than 70% over 2000, which in turn represented an increase of approximately 20% compared to 1999. This growth resulted in around 250,000 Spaniards opting for a cruise for their holidays in 2004, some 50,000 more than in 2003. In 2005, Spain surpassed 300,000 cruise passengers for the first time.
Following the boom of 2003, with four new ships (two from Pullmantur, one from Iberojet, and one from Globalia), the fleet stagnated over the next three years, with only one additional ship per year, increasing from seven ships in 2003 to nine in 2005, five of which were time-chartered. This excludes the Pacific, which was chartered by Pullmantur Cruises to the Brazilian operator CVC Turismo and did not operate in the Spanish market in 2005.
For the Spanish market, the annual growth rate between 1999 and 2004 approached 40% (reaching 36.96%). During those years, annual growth of over 20% was expected for the next two years.
Royal Hispania: Spain's First Cruise Ship Venture.
In the 1980s, several attempts were made in Spain to create cruise lines, such as Real Marítima de Cruceros and Royal Columbus Lines, but these remained well-intentioned aspirations. On a different scale were the attempts of the Cremades Group, which established a company called Marflet Turística for this purpose.
However, the only venture that materialized came from Compañía Trasmediterránea. Between 1984 and 1985, it made its first real forays into the cruise market with the ship Las Palmas de Gran Canaria, sailing the Mediterranean and the Canary Islands. The same vessel was rebuilt as a cruise ship by Unión Naval de Levante in Valencia, chartered to Crown Cruise Lines, and renamed Crown del Mar in 1989. At the end of 1990, the charter was terminated, and Marítima Albatros decided to repatriate the Crown del Mar, which subsequently remained inactive for three years in Barcelona.
In January 1994, the Crown del Mar was sold to Trasmediterranea, which renamed it D. Juan, and that summer it began its first cruises. The D. Juan was the first Spanish-owned vessel to offer the typical circular cruise of the Western Mediterranean from Barcelona. This product remains the best-selling cruise in Spain almost twenty years later. In the 1996-1997 winter season, the D. Juan was also the first Spanish-owned vessel to offer cruises from Cuba, following a time charter agreement with Sol Meliá and Cubacán.
The operation of the D. Juan until 1999 was unprofitable for Trasmediterránea, as several management problems remained unresolved during those five years.
• Product definition. Even during the summer months, a consistent product was not offered. The attempt was made to cover many destinations with a single ship, when what the market demanded was a clear product with flagship ports of call.
• Marketing. Royal Hispania never gained the respect of travel agents due to the lack of professionalism in marketing the D. Juan, especially regarding pricing.
• The size of the D. Juan, which prevented mass distribution. With a single 400-passenger ship, large-scale marketing was unfeasible.
In any case, Royal Hispania was a step forward that addressed one of the most serious shortcomings of our cruise market: the lack of a national product aimed exclusively at the Spanish market.
Cruises from Spain: A Great Missed Opportunity.
The potential of the Spanish cruise market and the prevailing economic boom during the last five years of the 1990s encouraged a group of companies, all related to the tourism sector, to seriously study its potential. On September 30, 1997, six leading companies (Trasmediterránea, Unión Naval de Levante, Air Europa, Sol Meliá, Barceló, and Viajes Iberia) formed Cruceros de España (Cruises from Spain), a temporary joint venture created to study the viability of a cruise line for the Spanish market.
A year later, the report was available. Its conclusions were optimistic about the future of the Spanish market. By November 1998, only Trasmediterránea, Barceló, and Unión Naval de Levante (UNL) remained in the joint venture; these three companies should have been the founding partners of the Compañía Española de Cruceros (Spanish Cruise Company). Much was written at the time about the construction of a 1,000-passenger cruise ship at UNL's Valencia shipyard, with an investment of 25 billion pesetas. This ship would be based in Málaga, offering cruises to the Balearic Islands during the summer and the Canary Islands during the winter, starting in 2000. During those months, the possibility of the Norwegian Cruise Line (NCL) acquiring a stake in the newly created shipping company was also raised.
Up to that point, the plan had always envisioned ships of 30,000 gross registered tons, or 1,000 passengers. However, NCL made it clear to its partners that the ship to be built should be designed with criteria other than the maximum capacity of the Valencia shipyard in mind. This led to the Valencian shipyard's withdrawal from the joint venture.
On June 10, 1999, Spanish Cruise Line was finally established, representing Spain's largest venture in the cruise market, through a partnership between Trasmediterránea, NCL, and Barceló. In November of that year, Spanish Cruise Line was considering a tender for the construction of a new cruise ship, with a capacity of 1,200 passengers and a gross tonnage of 35,000. The first half of 2000 proved decisive for the future of Spanish Cruise Line, as a series of events led to NCL and Barceló's withdrawal from the company. In May, an alliance was formed between First Choice and Royal Caribbean, the world's second-largest cruise liner. Under this agreement, Royal Caribbean acquired a 20% stake in First Choice, and each party invested fifty million dollars to create a cruise line exclusively for the European market, Island Cruises, to which Royal Caribbean would sell the Viking Serenade. The ship was renamed Island Escape in 2002 and targeted at the British mass market, competing with Airtours, Thomson, and others. This led to the non-renewal of the charter for the cruise ship Bolero.
In February 2000, NCL, following a takeover bid by Carnival Corp., was acquired by the Malaysian Star Group, which brought Spanish Cruise Line to a standstill. Just a few months later, in the spring of 2000, NCL abandoned the Spanish Cruise Line project. Trasmediterránea once again found itself alone in its cruise line project for the Spanish market in the summer of 2000 and immediately began searching for partners. The technological partner was Festival Cruceros, which had an available ship, the Bolero. The commercial partner, with a profile similar to Viajes Barceló, was the Iberostar Group. Following the positive experience of Pullmantur Cruceros, Spanish tourism groups had grasped the potential of the domestic cruise market and the advantages of integrating with shipping companies.
Spanish Cruise Operators Today:
Following the business ventures of the previous decade, which for various reasons failed to take hold, three initiatives emerged at the beginning of this century that did succeed in making cruises a popular vacation product featured in tourism distribution channels. These initiatives did not originate from traditional shipping companies, but rather from large business groups in the tourism sector, which vertically integrated cruises into their conglomerates. These groups could offer combined packages that included air travel, transfers, and pre- and post-cruise accommodations.
At the beginning of this century, three initiatives emerged that did manage to turn cruises into a popular holiday product present in the tourist distribution media: Spanish Cruise Line/Iberojet Cruceros, Pullmantur Cruceros and Globalia.
Spanish Cruise Line/Iberojet Cruises:
On October 4, 2000, Spanish Cruise Line relaunched with the Bolero, operated by Festival Cruises. The product offered was once again a circular cruise in the Western Mediterranean, competing with Costa Cruises, MSC Cruises, and Festival Cruises itself. Spanish Cruise Line aimed to sell nearly 35,000 passengers in its first year.
The 2001 season was impacted by the arrival of the Oceanic and the events of September 11, which caused Spanish Cruise Line to fall short of its targets and cancel its winter season in the Caribbean. The year 2002 in the Spanish cruise market was marked by uncertainty surrounding the privatization of Trasmediterránea. Nevertheless, by focusing on its seven-night Mediterranean cruise product departing from Barcelona, Spanish Cruise Line carried approximately 30,000 passengers. Iberojet began 2003 by acquiring Festival's stake in Spanish Cruise Line, followed by the purchase of Trasmediterránea's shares. The company then strengthened its operations with a second ship, the Crown, which offered cruises from Valencia. This increased the company's capacity by almost 50%, based on passenger-days. Cruises ceased to be marketed under the Spanish Cruise Line name, and the Iberojet Cruceros brand was launched.
Iberojet Cruceros entered 2004 with a complete fleet renewal. Its primary objective was to offer a product distinct from Pullmantur's, positioning itself in the market as a four-star cruise line with new and attractive itineraries and improved ships, which from then on carried the "Grand" prefix, the same designation as a hotel chain within the Iberostar group. To renew its fleet, Iberojet Cruceros purchased the Grand Latino and the Grand Voyager that year, which offered week-long cruises from Barcelona and Valencia to the western Mediterranean starting in June 2004. The Majorcan tour operator maintained its 2003 strategy of offering two different embarkation ports and exceeded 40,000 passengers by the end of the year.
The Majorcan wholesaler began 2005 in the same way as the previous year: by investing one hundred million euros in the purchase of the Mistral. This acquisition also solidified Iberojet Cruceros' new strategy: modern ships with all the latest amenities, fast sailing, and so on. With three ships, Iberojet Cruises' offering grew by 271% compared to 2004. In any case, this fleet expansion allowed Iberojet to offer a similar range of services in 2005 to that of its main competitor, and to anticipate growth figures close to 100%, which means it could reach approximately 80,000 passengers in 2005. Furthermore, the addition of the Mistral allowed Iberojet to diversify its offerings, basing one of its ships in a foreign port for the first time, by deploying the Grand Voyager to the Adriatic in the summer of 2005.
Pullmantur Cruises: Following in the footsteps of Oceanic
Pullmantur, the wholesaler then owned by Gerardo Díaz and Gonzalo Pascual, was dedicated in the late 1990s to operating charter flights to the Caribbean and, to a lesser extent, tours of Europe, Tunisia, Morocco, etc. However, in 1997, Pullmantur launched a combined cruise and hotel package in the Caribbean, with flights included, in conjunction with Premier Cruises.
In 1998, this cruise line reached an agreement with Pullmantur, partially chartering the Rembrandt, which would offer seven-night Mediterranean cruises departing from Barcelona. This cruise was marketed to the Spanish public as <
In 2000, Premier Cruise Line offered the Seawind Crown, which was fully chartered by Pullmantur for three years, meaning eight hundred berths were filled weekly. The bankruptcy of Premier Cruise Line led to the Seawind Crown being impounded in Barcelona on September 18, 2000. For the second year in a row, Pullmantur found itself without a ship. The success of previous years had encouraged its management to opt for purchasing, rather than chartering, a cruise ship. Pullmantur, which had considerable goodwill built up over the past three years, had no ship with the 2001 summer season practically upon us… leaving the market entirely in the hands of other operators.
And then the Oceanic appeared, well into the spring of 2001. Pullmantur had always been clear that its flagship product for Spaniards was the week-long round-trip cruise departing from Barcelona every Monday until the end of 2001. These relatively inexpensive trips (around €600 on average) were what popularized cruising in Spain from that year onward.
In 2002, Pullmantur Cruises operated a second ship, the R Five Blue Dream, with an itinerary also based in Barcelona, very similar to that of the Oceanic, but offering a superior level of facilities and service. That year, Pullmantur also began offering the option to finance its cruises.
The 2003 cruise season looked challenging for Pullmantur Cruises due to increased competition and price wars. However, it was the first year in which Pullmantur operated in three destinations (Mediterranean, Caribbean, and Adriatic) with four ships. At the beginning of the year, Pullmantur Cruises purchased the Pacific and chartered a second ship from Renaissance Cruises, the R Six Blue Star. There was also talk that year of a new ship to be built at IZAR shipyard and an expansion of the Pullmantur Air fleet.
By the end of the year, Pullmantur Cruises was the undisputed leader in the Spanish market for the second consecutive year. 2003 was the first year with passenger numbers approaching one hundred thousand, representing growth of over 70%. Its flagship product continued to be the cruise from Barcelona, which that year was served by two ships. Cruises from Venice, which had a difficult start due to the Iraq War, were a resounding success. Finally, in its third destination, the Caribbean, the cruise plus hotel package was chosen by more than 80% of customers.
In 2004, Pullmantur Cruises maintained its market share with four ships: two departing from Barcelona, one from the Caribbean, and one in the Adriatic, following the positive reception of 2003. The R Five did not sail for Pullmantur, which compensated for its absence by adding the Holiday Dream at the beginning of 2004. Its use as a second ship departing from Barcelona, offering Mediterranean cruises, meant that the company maintained virtually the same offering as in 2003, with practically no significant real growth. Nevertheless, Pullmantur Cruises improved its ship occupancy rates, allowing it to surpass 100,000 passengers for the first time in its history, reaching 124,800.
In 2005, Pullmantur Cruises could have had five ships for the first time, but at the beginning of the year, it chartered the Pacific to the Brazilian operator CVC Turismo until 2007, thus maintaining its four-ship fleet. Only the extension of the charter for the Naútica Blue Dream, which began operating in March, and the year-long operation of the Holiday Dream allowed Pullmantur to increase its 2005 capacity by 15%. In addition, Pullmantur decided to serve a new destination in 2005, the Baltic, where it employed the Naútica Blue Dream for almost two months. Four ships, four destinations: Western Mediterranean, Adriatic, Caribbean, and Adriatic. However, for the first time, the combined passenger-days of the other two national operators exceeded Pullmantur's capacity, which could have meant a decrease in its market share, which in 2004 was almost 50%. Nevertheless, despite the competition, Pullmantur surpassed 140,000 passengers in 2005.
At that time, the company's future depended on securing a stable fleet of four ships in order to maintain its market share. Thus, they acquired the R Six Blue Star, the last of the defunct Renaissance ships that had not yet been sold. But in the medium and long term, given the contraction of the second-hand cruise ship market and the competition to buy the few ships that came onto the market, Pullmantur Cruises' future lay either in building new ships or in an alliance with a shipowner that had surplus tonnage.
Globalia
, José Hidalgo's company, decided in January 2003 to enter the cruise market by creating Globalia Cruises, in partnership with Festival Cruises, to whom they chartered the Flamenco. TravelPlan designed its cruises, which began in April 2003 from Barcelona, in direct competition with Pullmantur and Iberojet Cruises. They offered, with the same claim of a "Spanish product," including crew, food, and entertainment, an eight-day cruise from Barcelona through the western Mediterranean, with an itinerary almost identical to that of their competitors, vying for the first cruise passengers. This announcement revealed another difficult-to-understand aspect of Festival Cruises' strategy, since on paper they were chartering a ship to a direct competitor of their subsidiary, Spanish Cruise Line.
Globalia Cruises distinguished itself from the outset with a very aggressive sales policy, which included the lowest prices in the market. The bankruptcy of Festival Cruceros in 2004 meant that Globalia could not operate with two ships (Flamenco and Bolero), as originally planned. However, Globalia Cruceros eventually marketed the Flamenco from Barcelona, once again offering the most affordable cruise product in the Spanish market. 2005 was the first year in which Globalia operated with two ships, as TravelPlan announced at FITUR 2005 its intention to offer seven-night cruises from Valencia during the summer of 2005. To this end, it chartered the Ocean Countess between June and September of that year. With this charter, TravelPlan doubled its peak season offering, with an 84% increase compared to 2004, although still considerably behind its competitors Pullmantur and Iberojet Cruceros.
Pan-European Operators with a Presence in Spain:
In addition to the national operators in Spain, several European-based cruise ship owners held a significant market share. Unlike the national operators, these were cruise ship owners who only marketed cruise tourism products in their catalogs. They have large fleets with a much wider range of destinations, and their offerings emphasized the cruise experience itself: ports of call, destination, gastronomy, etc., but within a European setting. Therefore, they could not use the language and personalization for Spanish tourists as selling points.
Costa Cruises. The Pioneers in Spain.
Costa Cruises was the first cruise line to open its own branch in Spain in 1994, under the leadership of Giovanni Batista Bancalari. For the next eight years, Costa was the driving force behind the sector in Spain, building considerable goodwill and paving the way for other operators, both European and domestic.
Looking solely at the results of this decade, Costa Cruises maintained its numerical leadership in the Spanish market until 2001. In 2000, it was the leader in Spain with 28,900 cruises sold (double the number sold in 1998 and 45% more than in 1999). Furthermore, in that transitional year, it was also the leader in eight-day cruises in the Western Mediterranean. In 2001, Costa Cruises was once again the leader in Spain, with 36,400 cruises sold and €51,200,000 in revenue. In both cases, the increase was 20% compared to 2000. Their most popular products were the seven-night Western Mediterranean cruise and the Aegean cruises departing from Venice.
In 2002, Costa carried 43,000 cruise passengers, an 18% increase. That year, Costa Cruises passed the torch of market leadership in Spain to Pullmantur Cruises, although it remained the leading cruise line based in Europe. 2003 was a good year for Costa, which ended the year with 45,000 passengers (5% more than in 2002), after a year that began with a slowdown in sales due to the Iraq War.
For 2004, Costa Cruises focused on its brand-new Costa Fortuna sailing from Barcelona, and on destinations in Northern Europe, the Norwegian fjords, and the Baltic. Furthermore, at the time of the Festival Cruises crisis, Costa Cruises was the only company with the necessary capacity to capitalize on the situation. Its large fleet covered all European destinations, offering a product based on the advantage provided by its fleet size. That year, Costa Cruises sold more than 60,000 tickets, a third of which embarked in Venice, another third in Barcelona, and more than 12,000 enjoyed a cruise in Northern Europe. This situation led Costa to consider Barcelona for the christening of its new flagship, the Costa Magica, for the first time outside of Italy.
Costa Cruises considered dedicating a ship in its fleet (specifically the Costa Classica) exclusively to the Spanish market. A market study dissuaded the Italian cruise line from this plan, as Costa's target customer in Spain valued the prevailing European atmosphere and the quality of the ships themselves. In 2005, Costa Cruises reached 70,000 passengers in the Spanish market.
Festival Cruises
opened a sales office in Spain in 1997, selling only 700 tickets that year. Festival Cruises was also a founding partner of Spanish Cruise Line and later joined forces with Globalia in 2003.
Festival Cruises' own business experienced remarkable growth in Spain. In 2000, it sold around 7,500 cruises, thanks to an aggressive and imaginative campaign that increased its business by 257%. The following season, Festival Cruises sold around 16,000 tickets, but only offered cruises from Barcelona aboard the aging The Azur.
In 2002, cruises from Barcelona were operated by its most modern ship, the European Stars, delivered in April of that year. Furthermore, it also offered cruises from Valencia with the Mistral starting in May. These developments quadrupled Festival Cruises' offerings from Spanish ports that year. In addition, the Greek operator also offered Aegean cruises from Venice and Northern European cruises from Kiel.
In November 2003, Festival Cruises presented its new business strategy in Madrid, based on differentiation from its competitors and on quality. However, rumors about Festival's financial weakness were already circulating. These rumors materialized in January 2004 when all of Festival Cruises' ships were impounded due to outstanding debts. This crisis culminated in the company's demise, with all the ships in its fleet being sold at auction. Four months after its ships were impounded, Festival Cruises finally admitted bankruptcy. Ironically, the Festival Cruises crisis arose after the presentation of its best financial results. In 2003, 316,000 people (20,000 of them in Spain) enjoyed a Festival Cruises cruise (a 22% increase), and its revenue reached €335 million, 12% more than in 2002. However, it is clear that despite the growth in passenger numbers, the profitability of the business was questionable. Other cruise lines increased their sales in 2004 to capture this market share.
MSC Cruises
opened its own offices in Spain in 2003, hiring Mr. Bancalari, the former head of Costa Cruises in Spain. In its first year of operation, MSC Cruises sold more than 5,000 passengers. In 2004, MSC launched its new MSC Opera from Barcelona, after its delivery in the spring of that year, while also marketing two ships based in Venice. In its second season in the market, MSC Cruises experienced growth of over 160% in 2004 in the Spanish market, representing almost 12,000 passengers. Despite acquiring two of Festival Cruises' former ships, it was only able to operate the MSC Armonia from Venice. 2004 was a challenging year for MSC Cruises. On the one hand, it was a year of enormous fleet growth, both organically, with the entry into service of the MSC Opera, and through the purchase of two ships from Festival Cruises after its bankruptcy. Organizationally, the company saw a change in its top global executive, with the arrival of Pier Francesco Vago, while in Spain, Mr. Bancalari was replaced by Emiliano González as general manager.
During the 2005 season, MSC Cruises' flagship product was its Venice cruises. It was also the first year that MSC offered calls at Barcelona with two ships, the MSC Lirica and the MSC Sinfonia. By the end of the year, MSC had transported 25,000 passengers, more than double the number in 2004.
General Agents of Major Cruise Lines:
Major cruise lines, such as Royal Caribbean, Carnival, etc., that did not have their own representation in Spain, were present in our market through general agents. The first general agent was Ybarra, which marketed Costa cruises for many years until the Genoa-based shipowner's arrival in Spain in the early 1990s.
Central de Cruceros was created in December 1970 to centralize the cruise business of the Marsans Travel Agency, Viajes Meliá, and Wagons-Lits-Cook. Its cruise marketing activity was carried out in two ways: on the one hand, as a general agent for prestigious cruise lines such as Chandris, Grimaldi, Lauro, etc.; on the other hand, Central de Crucero chartered entire ships, generally during the summer months, to sell cruises in the Spanish market to destinations such as the Western and Eastern Mediterranean, Northern Europe, etc. It ceased operations in 1995.
The most important company at the time was Latitud 4, founded in 1985 by Antonio Wanguemert and other partners, which held the representation of Royal Caribbean International and Celebrity Cruises. Its catalog was very varied and offered a wide range of cruises departing from Spanish ports, especially Barcelona. Other wholesalers present in the Spanish market included Un Mundo de Cruceros, which offered cruises from Fred Olsen, Crystal, and others.
CONCLUSION
The cruise tourism sector maintained steady growth during those years, aided by the prevailing economic boom, with over ten and a half million passengers worldwide in 2005. Within this global context, the figures for the Spanish market were not significant, but its growth rate was, the highest in Europe, averaging over 30%, achieved primarily by domestic cruise lines. That year marked the peak of independent Spanish initiatives in this sector, which at that time needed to consolidate its market share. This process was accompanied by ever-increasing investment, with the incorporation of newly built ships specifically designed for the Spanish market remaining a challenge for our shipowners. Their entry as a global operator in other source markets, such as South America, was also seen as a way to improve ship profitability, especially during the winter months. Furthermore, there was a growing demand for operators to specialize, offering innovative products and destinations to a market that was showing its first signs of maturity.
But this development has not gone unnoticed by the sector's major multinationals, from global operators like Carnival Corp. and Royal Caribbean to European shipowners like Mediterranean Shipping Co. In this respect, the sector's globalization was (and is) ever-increasing, with a situation approaching oligopoly due to ever-increasing technological (ships, computer systems) and commercial (marketing, media, etc.) costs. In this scenario, the arrival of these giants in Spain was only a matter of time.
