Cruising into retirement

Joel Katz, Managing Director of Cruise Lines international Association Australasia, talks about the growing number of people spending their retirement living on a cruise ship

Introduction, Cruising into retirement

Ross Greenwood:  Welcome back to Work.Life.Money right around Australia. Great to have your company. Can I tell you, have you been on a cruise? Well, if you’re over a certain age, not being rude about this, but it’s actually true. If you’re over the age of 60, you are more likely to have been on a cruise than if you’re under 40. That’s what the stats show, but Australians generally are increasing their cruise numbers dramatically and very significantly.

Over the past year in 2016, the cruise market grew by 21% in one year. There was 1.28 million Australians who took a cruise during that year. Now, most of those people went to ports that are relatively close to Australia, but there is no doubt that just as it’s being a big growing area overseas, Australia now is a key cruise market. That’s also why many of the big cruise companies choosing to base ships here year-round. That means there’s more capacity, more opportunity to cruise, more deals around the place as well. Quite clearly, as I said, as you get to a certain age, the prospect of a cruise becomes even more enticing. You want to pack your bags, the food’s there, you don’t have to cook for yourself. Fantastic. It is a great way to do it. Let’s go to Joel Katz, who is the chief executive, managing director of the Cruise Line International Association of Australasia.

Joel, many thanks for your time.

Interview, Joel Katz, Chief executive, Managing Director, Cruise Line International Association of Australasia.

Joel Katz: Thanks, Ross.

Ross Greenwood:  Just explain to me what is it. What was the tipping point in the cruising industry in Australia that suddenly made these numbers took off as they have?

Joel Katz: Well, Ross, as you said, almost 1.3 million Australians took an ocean cruise in 2016. That’s the equivalent of 5.3% of the population, so one in 20 Australians taking a cruise. Really, when it comes to cruising, Australians are world leaders. This is due to a wide variety of reasons. One, the incredible range of cruise ships and itineraries that are available on our doorstep today and also around the world. Travelers are increasingly realizing that cruising is a great value holiday, with all your meals, your accommodation, your entertainment included in the one fare as you said. It’s also an incredibly relaxing and stretch-free way to travel. You only have to unpack once and the destinations will essentially come to you.

Ross Greenwood:  All right. Tell me about the demographic, because that split says that those people who are older are more likely to take cruises. If I go on a cruise, am I necessarily going to run into a whole bunch of older people? Maybe I’m of the age as well. I’m getting close to it. I’m going to be careful what to say, but you understand what I’m trying to say.

Joel Katz: Yes. No, not really. Australian cruises are coming from across the age spectrum which, again, underlies the wide variety of cruising destinations that are on our side. We are seeing cruising really appealing to all, to all ages of Australians. Traditionally, cruising has been the domain of the older generation. As the wide variety of cruising options become more available, cruising is really appealing to everybody.

Ross Greenwood:  All right. Now, there’s a strange thing here that comes up, and that is, in the United States, and I know that the prices in the United States because they’ve got so much more inventory or so many more cabins to get rid of there, so there are all sorts of enormous deals. One of the American academic stock increased suggested from North Western University in Chicago that over the average 20-year retirement phase that a person goes through, a cruise ship would cost only, give or take, US $2000 more than the cost of assisted living. In other words, what this person is suggesting is that it’s almost as cheap to go and live on a cruise ship, and spend your retirement years as it is to go and check yourself into a bit of retirement accommodation.

Joel Katz: Well, there certainly are some examples of retirees who do choose to spend, let’s call it, their semi-retirement on board cruise ships and they book back-to-back cruises. It’s certainly an affordable way to spend your retirement.

Ross Greenwood:  Hang on, Joel. You’re serious. This is actually a real thing? This is not something that’s made up. There are legitimately people who will go from cruise to cruise and, therefore, their principal accommodation is on a cruise ship.

Joel Katz: Yes. I’ll just give you some examples of that. In fact, some of our more prolific cruises have actually written books about their retirement cruise ships.

Ross Greenwood:  Because you’d be looking at this in terms of the various companies and they’d have, effectively, not frequent cruises. You’re saying that some of these people have done dozens and dozens of cruises over the course of their retirement years.

Joel Katz: Absolutely. There’s a lady who, when her husband died in the US, she sold her home and moved onto a cruise ship. Starting with Holland America, she then moved to Crystal where she’s been living for the past seven years, I believe.

Ross Greenwood:  Wow. One of my experiences — I’ll tell you a little story of where the people on the Queen Victoria, the Queen Mary, the big cruise ships, fantastic cruise ships. They’re wonderful. Of course, they do have people of a certain age there. Many older men and women might be there. On the dance floor, which is [unintelligible 00:05:40] club out there, they have people who they hire, the staff, to go and dance with the guests. I like that. You’ve got some company. You’ve got someone to go and have a dance with. This is the type of service that an organization that’s very services-oriented really has a view about it, I guess, Joel.

Joel Katz: Yes. As I said, there really is a shift and an experience for everyone. For that particular demographic, you are interested in those kinds of activities. Those ships exist for the younger generation. There are more active ships for those that are looking for enrichment. There are the expedition-style ships. Really, there’s never been as much choice as there is today for all demographics.

Ross Greenwood:  Tell me what price has done because, obviously, there are now more cruise ships in Australia, especially in the summer months when a lot of the Northern Hemisphere ships tend to come to Australia, but also those permanent ships now stationed here. Does that mean that the deals, the prices out there are now a bit sharper than what they might have been a few years ago, when to go on a cruise was seen to be a relatively expensive thing to do, is now not that way, is it?

Joel Katz: Yes. Again, there are pricing levels for all levels of passenger, depending on exactly what kind of experience you’re looking for. Ranging from family-style ships through to the luxury all-inclusive ships, and then the boutique, more exploratory- or expedition-style ships in the middle. The one thing that we do recommend is always to book early, to get the best price, and to get the level of stateroom and sailing that you want. Of course, we always recommend that you book through a clear travel agent who will always be able to get you the best deal.

Ross Greenwood:  I’ll tell you what, it’s a great story. Just remember that it costs some 1.3 million Australians. This year 2017, we will go on a cruise at some stage that will pick up people who will go two, three, four, or even a dozen times. The fact of the matter is it’s growing very strongly. Joel Katz, the managing director of the Cruise Line International Association of Australasia.

Joel, we appreciate your time here on the program today.

Joel Katz: Great. Thanks, Ross.

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