InsureandGo, a leading travel insurer, has observed a significant 170% rise in travelers aged 26-40 purchasing cruise travel insurance during the first seven months of this year compared to the final seven months of last year. Furthermore, there has been a 119% increase in single travelers of all ages opting for cruise cover.
The data also reveals a remarkable overall increase of 96% in cruise travel insurance purchases from all customers, with an extraordinary 336% surge in August compared to the same month last year, following the NSW Government's decision to end Covid-19 protocols for cruises.
Expanding Appeal and Mitigating Risks
Cruise operators have recognized the need to diversify their offerings and appeal to various customer segments. For instance, Virgin Voyages now provides an exclusive over-18s-only cruise featuring a tattoo parlor, interval training workout classes, and a casino. On the other hand, Disney Wonder has gained immense popularity among families looking for a fun and memorable cruise experience.
To address concerns about the risk of infectious outbreaks, cruise operators have implemented enhanced measures. Princess Cruises, for example, has upgraded their air filtration systems, designed to replace air within public spaces every six minutes.
Increase in Demand and Domestic Travel Confidence
Despite facing severe challenges during the Covid-19 pandemic, the cruise industry in Australia saw a ray of hope with the lifting of the cruise ship ban in April last year. This positive development, coupled with growing confidence among domestic travelers, has contributed to the increased demand for cruise travel.
The Cruise Lines International Association (CLIA) predicts that cruise passenger volumes will reach 106% of 2019 levels this year, with an estimated 31.5 million passengers.
Interestingly, while the demand for cruise cover rises, domestic insurance purchases in Australia decreased by 22% in January to July, compared to the final months of the previous year. This decline can be attributed to increased domestic traveler confidence following years of disruption caused by Covid-19 restrictions, flight cancellations and delays, and mishandled luggage.
In June, domestic routes saw a significant 47% reduction in the average cancellation rate compared to the previous year.
Catering to Domestic Travelers' Needs
In response to the growing demand, Southern Cross Travel Insurance, whose CEO is Jo McCauley, now offers optional cruise cover for domestic travelers. A notable 23% of Australian travelers plan to embark on a domestic cruise this year, while 39% are considering purchasing domestic travel insurance for their upcoming trips.
The strongest demand for cruise cover comes from families with children aged eight years and older (26%), closely followed by empty nesters (19%). The primary motivations behind obtaining this insurance are the potential for unforeseen cancellations or lost baggage.
With a record number of 70 cruise ships scheduled to operate in Australian waters from now until April, more Australians are considering domestic cruises as an attractive getaway option.
Given the costs associated with domestic cruises and the increased awareness of potential cancellations due to unforeseen circumstances during the pandemic, Ms. McCauley emphasizes the importance of cruise cover and the peace of mind it provides.
Southern Cross Travel Insurance has already processed over $190,000 in domestic travel insurance claims over the past year. The most significant claim paid out was $10,000 for a customer who required hospitalization due to a blood infection and had to cancel their organized tour to receive treatment.
It's important to note that Southern Cross cover does not include medical and evacuation coverage. Customers are advised to contact their private health insurer and Medicare to ensure they have adequate coverage for medical emergencies.
