Market for cruise ships in UK

Question

Market for cruise ships in UK

Population of the UK (65 million)
Break down by categories: A (5%), B (middle class 25%), lower middle class (30%), rest of the population (40%)
Assume no one from the rest of the population goes on cruises. Assume that everyone that wants to go from class A and B that want to go on a cruise can go
Class A - 1.3 million —> on average 10% of people go on cruises every year. Cruises get more popular as people age
Class B = 16.25 million —> 5% of people go on cruises every year. Not sure on assumption as to why here
812,000+130,000 = 942,000
Average cruise costs - 2000 pounds.
18.8 billion.
Is this number too high. Did I do anything wrong in my assumptions?
Thank you in advance!

Answer 1

Hi there,

I just have a few comments:

"Rest of population" means nothing. Do you mean low income/poor?
No need to do middle and lower middle. Just do high, medium, and low income. It's generally good to know the income + age bands of your country!
I don't understand point #3...of course even low income would go...in fact that's the main demographic that does go on cruises!
For #4, where did you get 10%? Need to try and reference something (your friends/family, something you've read, take it as a % of all vacations, etc.)
For #5, same comment as above
To test your assumptions, reference another market (i.e. the size of the UK travel industry, which you would know)

Answer 2

I would probably include an age segmentation as well. Yes, cruises are more relevant to the wealthy socioeconomic segment but it's also correlated with age and families.

Secondly the frequency is also another factor that I would say differs by segement. Cruise once a year does feel very frequent and probably only the case for the over 65 and upper-middle class segement who can afford both time and cost.

Lastly, based on the above two points, I would be tempted to even look it by number of married adult couples (instead of general population) if you were able to get that number. Perhaps more difficult for back-of-the-envelope market sizing but that would be the more relevant segementation for the industry

Having said this, there's never a "right" answer for market sizing and so just one ex-consultants view, although I did work extensively in the travel sector including cruises.