Source: Cruise Market Watch. Note: Excursions only cover those organized by the cruise line. Note: 2023 figures; financial breakdown of typical cruiser worldwide (across all cruise lines); average cruise duration: 8.0 days; median duration: 7.0 days.
While in 2023, the average revenue was about $2,202 per cruiser, the associated expenses were $1,862, implying a profit margin in the range of 12-13%. At the beginning of the decade, these percentages stood at 77% ($1,663) and 23% ($1,485), respectively, indicating that upgrading onboard amenities provides higher yields to cruise lines. The breakdown of revenues and expenses has the following characteristics:
- Revenue. The base fare paid by the average cruiser accounts for 69% of the revenue, implying that cruise lines can generate an additional 31% of revenue through onboard services, such as gambling, excursions, drinks, and personal services. Additionally, cruisers are spending on goods and services at ports of call, which are not accounted for here.
- Expenses. The main expenses related to ship operations include port fees and taxes (often levied per cruiser), ship maintenance, fuel (9%), payroll (13%), food & beverages, and the provision of onboard services. A standard cruise package includes food services as well as onboard services such as shows. Since booking ships is a marketing-intensive activity involving advertising, agent commissions account for a notable share of expenses (15%). Cruise ships are capital-intensive (a ship carrying 3,500 passengers costs more than $800 million, and the latest generation of mega-ships costs close to $2 billion), with approximately 13% of the expenses related to servicing the debt contracted for their purchase.