The global cruise industry, a powerhouse in travel, is currently navigating a complex period filled with local challenges and significant strategic realignments, even as passenger numbers have bounced back strongly post-pandemic, reaching an impressive 35 million worldwide in 2024, though growth projections suggest a potential slowdown ahead.
As growth rates are expected to moderate, with estimates pointing to 3% in 2027 and 2% in 2028, the industry is increasingly facing pushback from popular destinations, where coastal cities and island nations are struggling with the impacts of mass tourism and the environmental toll of large ships, leading to new regulations and restrictions on port access.
A striking example of local sentiment directly influencing cruise operations unfolded recently in the Cayman Islands, where voters overwhelmingly rejected a proposal for a permanent cruise berthing facility in a national referendum, with approximately 65% saying ‘no’ to the dock and preferring the existing tender system, despite some tourism sector concerns about potential declines in cruise visits.
The National Trust for the Cayman Islands (NTCI), a local non-profit focused on protecting culture, heritage, and natural resources, had formally opposed the development. The Trust voiced deep concerns about a cruise dock in George Town and the threat mass cruise tourism poses to the economic, socio-cultural and environmental sustainability of Cayman. They stated their position clearly: “We want to make clear our position that the National Trust remains opposed to developing cruise berthing infrastructure because it is not in the best interest of the Cayman Islands.”
The Trust argued that the substantial cost of a permanent facility, estimated in the hundreds of millions of dollars, is not justified by the relatively modest revenue and job creation from the cruise sector when compared to stayover tourism, as 2023 statistics showed passenger tax income from cruise visitors at $12.8 million (1.2% of government revenue), significantly less than the $74 million (7%) from stayover visitors, and cruisers spending an estimated CI$95 per head compared to CI$600 by overnight guests.
Concerns were also raised by the Trust regarding the carrying capacity of the islands for mass cruise tourism and the potential damage to the higher-income long-stay sector if the focus remained on high volume. The Trust stated, “If we continue to open the floodgates to mass cruise tourism, we risk damaging our long-stay sector and jeopardising this far higher income.” They advocated for a more sustainable approach, suggesting a focus on new attractions, reducing overcrowding at marine sites, meeting visitor demands for cultural experiences, and creating new jobs for Caymanians.
The National Trust also pointed out that while around 1,500 people were in cruise-related jobs in 2024, it was estimated that more than half were on work permits. They suggested that Caymanians dependent on cruise income could be helped in other ways, noting the growth in the long-stay job market with three new hotels under construction. The NPO suggested allowing cruise tourism to “settle naturally at around the current level would be the ideal solution for Cayman both environmentally and economically.”
Instead of building piers, the Trust urged the government to “upgrade the shore-side cruise services into a state-of-the-art facility so that cruise visitors enjoy a far higher quality experience onshore.” They also suggested revisiting the revitalisation of George Town to showcase history and culture with features like tree-lined squares, cafés, restaurants, and shops selling local and regional products, arguing this would be “all at a fraction of the cost of a berthing facility.”
The grassroots group CPR Cayman, which spearheaded the anti-pier campaign, celebrated the referendum outcome as a triumph for sustainable tourism and urged for investment in enhanced tendering infrastructure, while pro-dock groups like the Association for the Advancement of Cruise Tourism (ACT) remain dedicated to championing ‘a sustainable and competitive cruise tourism industry,’ asserting that local businesses will continue to suffer without a pier.
The rejection of the pier also rendered a proposed workaround—allowing ships to operate casinos while docked as an incentive for overnight stays—moot, and this option is now off the table for the foreseeable future, meaning that for cruise passengers visiting Grand Cayman, the tender system will continue to be the only way to reach the shore.
Restrictions on large ships are not unique to the Cayman Islands. Cities like Nice, on the French Riviera, have issued decrees barring larger cruise ships from docking. Last year, voters in Bar Harbour, Maine, chose to maintain their limit of 1,000 passengers per day. While a ballot measure in Juneau, Alaska, to ban ships on Saturdays was rejected, it highlighted the ongoing debate about limiting cruise tourism impacts. Even busy ports face challenges; Port Canaveral in Florida suspended an expansion effort due to objections, and the port in Tampa has height restrictions.
Congestion is becoming a significant issue in high-demand ports, with PortMiami set to accommodate 12 ships simultaneously upon terminal completion, yet already experiencing a record of 10 ships on a single morning, prompting industry analysts to question long-term capacity, with one expert aptly remarking, “You can build new ships but where are you going to put them?”
The New Zealand cruise industry is also bracing for a substantial downturn, with forecasts predicting a massive 40% reduction in cruise visitation for the 2026/27 season, and major players like Royal Caribbean reportedly visiting 70% less than just a few years ago, attributed by the New Zealand Cruise Association to biofouling risks under new environmental regulations, regulatory uncertainty, a perception of New Zealand being a difficult operational environment, escalating costs making it the ‘most expensive place in the world for a cruise ship to visit,’ geopolitical disruptions, and the weaker Australian and New Zealand dollars.
Faced with these global challenges and slower projected growth, cruise lines are actively pursuing new strategies to attract passengers and find alternative destinations. One major trend involves developing private islands or exclusive coastal resorts.
Examples include Royal Caribbean’s Perfect Day at CocoCay and Labadee (currently suspended), its upcoming Royal Beach Club Paradise Island and Royal Beach Club Cozumel, and Perfect Day Mexico. MSC Cruises has remodelled Ocean Cay MSC Marine Reserve and plans a second private island nearby. Carnival is developing Celebration Key in the Bahamas, featuring its own pier capable of docking large ships. These private destinations offer structured environments that some frequent cruisers, like Ryan Rea from Miami, find appealing, describing them as “comfortable, safe and relaxing” where “You know you won’t get bothered.”
Cruise executives view these private developments as a way to expand their audience and increase demand. Josh Weinstein, president and CEO of Carnival Corp., stated that a private island or resort “gets a broader audience, it gets more customers, and it will ultimately result in more demand.” These locations also provide guaranteed docking space and allow companies to offer a wider range of curated activities and experiences, bringing in additional revenue.
A strategic pivot towards the luxury market is also underway, viewed as a segment with considerable potential, exemplified by MSC Cruises expanding its Explora Journeys luxury brand with all-suite cabins designed to emulate boutique hotels, and while these high-end voyages command premium prices, executives like Pierfrancesco Vago of MSC Group’s cruise division find justification in comparing onboard luxury ship costs to land-based expenses, questioning, “How can we be wrong?” given the ‘incredible’ land prices.
Cruise lines are also exploring other niches, including expedition cruising, such as Royal Caribbean’s Silversea brand developing an “Antarctica Bridge fly-cruise program” that includes hotel stays in Puerto Williams, Chile. Additionally, Royal Caribbean is set to enter the river cruise market in Europe in 2027 with its subsidiary Celebrity River Cruises, ordering 10 ships to compete with established carriers.
Even tariff policies, such as those President Donald Trump has previously implemented, are recognized as potential influencers on the industry, and while executives acknowledge uncertainties and ripple effects, some companies like Royal Caribbean Group have reported robust booking levels and increased onboard spending, indicating consumer resilience, possibly bolstered by cruising’s perception as an economical vacation choice and the effectiveness of customer loyalty programs.
The cruise industry is clearly in a period of adaptation. Facing external pressures from regulations and local opposition in some key destinations, alongside broader economic factors, companies are innovating through controlled environments like private islands, diversifying into luxury and expedition travel, and exploring new markets like river cruises. This blend of navigating challenges and pursuing creative solutions looks set to define the industry’s course in the years ahead.
