TODAY'S NEWS HEADLINES 2023 

Rental affordability goes from bad to worse, with more to come.

Data shows renters in each capital city are now worse off than before the COVID-19 pandemic 2019, and rental inflation is expected to increase further.

According to Sydney Morning Herald, Rental affordability has gone from bad to worse over the past year, deteriorating in nearly every capital city as the Reserve Bank warns rent inflation will remain high for some time.

The annual Rental Affordability Index from SGS Economics and peak body National Shelter found renters in each capital city were worse off than before the COVID-19 pandemic 2019.

The index, which compares rents to household incomes, shows previously affordable suburbs in cities from Melbourne to Brisbane would now strain the average household budget.

National Shelter chief executive Emma Greenhalgh said more households in the cities and regions were under rental stress, and many places were the most unaffordable they had ever been.

“Rental affordability in Australia is going from bad to worse,” she said.

“In the past year, renters have been smashed with enormous rent hikes well beyond income growth.

“With vacancy rates so incredibly low, landlords have been able to pass on interest rate rises to tenants - and the pressure is only set to increase following last week’s rate rise.”

Separate data from the Reserve Bank, which this month lifted interest rates to a 12-year high of 4.35%, noted advertised rents had increased by 30%  since before the pandemic, well above rental inflation.

“Together with historically low vacancy rates and little sign that tight rental market conditions will ease in the near term, this is expected to keep rent inflation elevated for some time,” the RBA said in Friday’s statement on monetary policy.

Rental inflation neared 8% in the year to September and was expected to increase further, the RBA said.

A household is considered to be in housing stress once housing costs exceed 30% of its total income.

The Rental Affordability Index found Sydney had become the least affordable capital city alongside Hobart in the 12 months to June 30, as median rents rose by $100 to $650 a week, costing 29% of the average renter household’s income.

No coastal Sydney suburbs had acceptable rental affordability, it found, and inner-city locales were either unaffordable or extremely unaffordable. The average household needed to travel at least 15 kilometers from the CBD to suburbs such as Campsie, Lakemba, Rosehill or Parramatta to find acceptable rents.

SGS Economics & Planning principal Ellen Witte said this was a deep economic problem.

“Key workers in critical industries are traveling further and further and being priced out of their city,” she said. “We need a serious plan to provide the right housing at the right price to people who really need it.”

In Melbourne, rental affordability had dropped to 2018 levels, the report found. While an average rental property costs 24% of an average income, which is considered affordable, Witte said affordable pockets were disappearing.

“An entire corridor, stretching from Footscray in the inner west, north to Meadow Heights, was considered ‘affordable’ to the average rental household just last year,” she said.

“As of the June 2023 quarter, those options that cost less than 15% of a household’s gross income had all but vanished.”

What are Australia’s tax concessions on super & are they a problem?

Tax concessions on retirement savings are costing the budget billions, and some people are accumulating mega balances.

The Albanese government wants superannuation to be “equitable and sustainable”, leaving the door open to caps on balances or trimming tax concessions.

Now that Labor and the treasurer, Jim Chalmers, have started the “national conversation” around potential changes, we explain what the tax concessions on super are and why they are a growing cost to the budget.

How is super taxed while earning?

While workers are earning, their employer pays 10.5% of their income into their superannuation fund.

Both these mandatory and additional voluntary contributions (such as salary sacrificing) are generally taxed at 15%, which is significantly lower than most marginal tax rates, including the top rate of 45%.

Super contributions of up to $27,500 a year are taxed at 15% and above that at 30%.

The earnings on super savings themselves are generally taxed at 15% during the accumulation phase.

How is super taxed while drawing down?

In the retirement phase, people aged over 60 can access their super.

Those with a balance of less than $1.7m can generally access their super without paying any tax on the sums they withdraw.

Retirees with balances of more than $1.7m will generally be taxed at 15%.

What is the problem?

The average superannuation balance is $150,000, according to the prime minister, Anthony Albanese. For the most part, super tax concessions are not a problem - they are a deliberate design feature to encourage people to save more for retirement.

But some people are accumulating mega balances: 11,000 Australians are racking up more than $5m in superannuation, and 32 self-managed super funds have more than $100m in assets. Chalmers has noted that fewer than 1% of accounts have balances of $3m.

At the top end, superannuation is beginning to look less like a retirement savings scheme and more like an accumulation of wealth that isn’t spent but passed to the next generation, worsening inequality.

How much do super tax concessions cost?

According to tax expenditure statements, superannuation tax concessions cost the budget $52.5bn a year at the moment, just shy of the $55.3bn spent on the pension.

Chalmers has revealed that by 2050 super tax concessions will cost the budget more than the pension.

What could the government do?

In January, the assistant treasurer, Stephen Jones, told the Australian Financial Review that after legislating an objective for super, Labor would examine superannuation tax concessions.

Under one proposal championed by the Association of Superannuation Funds of Australia, super balances could be capped at $5m. That would mean high-income earners’ accounts in the accumulation phase could not benefit from tax concessions of 30% - which is the 45% personal tax rate less the 15% tax on fund earnings.

Another proposal would be to lower the rate at which the 30% rate of taxation kicks in from the current $250,000 income level and $27,500 super contributions.

Is this a broken promise?

During the election campaign, Chalmers said Labor didn’t “have any proposals for tax increases beyond working with other countries to make multinational tax fairer” - labeling any claims to the contrary a “scare campaign”.

Asked about capping balances, Chalmers reportedly said: “We don’t have any policies like that, that you just mentioned, and we took to the last election a bunch of savings out of superannuation, which we won’t be taking to the next election.”

The Coalition cites these and similar statements to claim Labor has broken its promise.

On Wednesday, Albanese told the National Press Club that Labor “said that we would not have any major changes in superannuation, and that is certainly our intention.” Nevertheless, it will continue the review into super.

What is the proposed objective of super?

The consultation paper, released on Monday, proposes to define the objective as “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.”

What has the response been?

The Coalition has rejected the element of “preserve savings”, by noting this would attempt to foreclose the possibility of using a portion of superannuation to buy a house. The Coalition proposed this at the 2019 election, and Peter Dutton recommitted to it in his 2022 budget reply.

Some have also cited Chalmers’s observation that “if we fail to act on areas like affordable housing, climate, the care economy and digital [economy], we will face the prospect of an economy that won’t sustain the growth that we need” to argue that the reference to “sustainable” includes investment in the green economy and housing.

The government insists the objective would not affect the duty of super funds to act in the best interests of members.

RBA ANNOUNCEMENT 

With inflation predicted to hit 7% by the end of the year, the Reserve Bank of Australia (RBA), has continued to increase the cash rate to try to keep inflation in order.

At its meeting today, the Board decided to increase the cash rate target by 50 basis points which means that the official cash rate is now 1.85%. 

Key highlights include:

• Inflation is forecasted to reach around 7.75% in 2022

• Consumer confidence has fallen and housing prices are declining in some markets

First home buyers feeling the pinch

According to Equifax - Australia’s leading credit reporting body:

Refinancing is on the rise: Mortgage demand fell in Q2 2022 and we expect demand will keep adjusting downwards from 2021 levels. The recent rate rises and the increasing cost of living have started to chip away at household savings. We’re also seeing refinancing trending upwards, as mortgage holders try to mitigate the impacts of rising interest rates. 

Insolvencies continue to climb: As interest rates rise, small business owners in certain industries will be under increased pressure, as they try to manage the impact of higher costs on both their personal and professional finances.

The 96 suburbs where house prices have doubled - or more - over the past five years

The 96 suburbs where house prices have doubled - or more - over the past five years

New analysis has once again highlighted just how significant this latest property boom has been, with house prices more than doubling in 96 suburbs around Australia.

And in some areas, the rate of value growth has been much, much sharper than that.

PropTrack data reveals the suburbs where the median house price increased by 100% or more between March 2017 and March 2022, based on at least 30 sales in a 12-month period.

“The past couple of years have been unusually strong for house price growth,” PropTrack economist Angus Moore said.

“The PropTrack Home Price Index shows that prices grew 23% in 2021 alone, and that is the third-fastest year of growth in 140 years.”

Sunshine Beach in Queensland saw its median house price explode by 191.6% over a five-year period, rising from $1.2 million in 2017 to $3.5 million as of March 2022.

It ranked as the country’s number one growth performer, driven by a significant imbalance between supply and demand.

Buyer demand across the Sunshine Coast has been intense, particularly over the past few years, sparked by the COVID-19 pandemic and strong interstate migration to the state’s southeast corner.

“Southeast Queensland has been a big beneficiary of the pandemic period, and the Gold and Sunshine Coasts especially,” Mr Moore said.

“We’ve seen a much larger than typical migration of people into the area, with many coming from Sydney and Melbourne.”

Another Sunshine Coast suburb, Sunrise Beach, also saw mammoth price growth, with its house median surging from $735,000 in 2017 to $1.75 million currently, up 138.1%.

The sought-after canal suburb of Minyama, about half an hour down the road, has seen its median house price jump by 131.2% to $2 million, up from $865,000 five years ago.

Meanwhile, Doonan, just outside Noosa, was another top performer, with its current median house price of $1.702 million rising 126.9% from $750,000 back in 2017.

As Mr Moore pointed out, the Gold Coast has also seen its market grow substantially in recent times, with the median house price in the suburb of Miami jumping 113.9%, from $694,000 in 2017 to $1.485 million now.

Other lifestyle-rich locations elsewhere in Australia also saw their real estate prospects boom, with Berridale in New South Wales coming in at the second spot on the list of the biggest growth performers.

The Snowy River locale, positioned close to the famed ski resorts of Perisher and Thredbo, saw its median house price rise from $212,000 to $600,000, up 183%.

Nearby Jindabyne, another favourite spot with skiers and snowboarders in the winter, has a current median house price of $1.405 million, up 167% from $525,000 five years ago.

“One of the big trends we’ve seen over the pandemic is that people have put more value on living near lifestyle locations ­­- the beach or near national parks - and having more space,” Mr Moore said.

“At the same time, many people have been able to work remotely. That means we’ve seen a real shift out of the inner-city and towards regional areas that can offer these benefits.

“That’s driven a lot of demand for regional property, and we’ve seen prices in regional areas consistently outperform cities.”

The beach hotspot of Byron Bay, beloved by Hollywood stars, local surfers, wealthy Aussie holidaymakers, and local influencers, has seen its median house price grow by 147% to reach $3.09 million, up from $1.25 million five years ago.

Another coastal enclave to perform strongly was Copacabana on the NSW Central Coast, where the median house price of $1.92 million has risen 127% from $845,000.

Bundeena on the outskirts of Sydney’s south had a 108% increase in its median house price, from $887,500 to $1.825 million.

And the median house price in ritzy Palm Beach on the Northern Beaches of Sydney is up 118%, from $2.77 million in 2017 to $6.05 million currently.

Anglesea on the Surf Coast was one of just two suburbs in Victoria to make the top 10 list, with its median house price jumping by a mammoth 145%, from $652,000 to $1.6 million.

Cape Paterson on the Bass Coast came in at the tenth spot, with a median house price increase of 143%, up from $370,000 five years ago to $903,000 currently.

In Greater Melbourne itself, Clyde North in the city’s southeast had a 109% increase in its median house price, up from $572,000 to $1.2 million.

It was the sole metropolitan suburb to appear in the list, with the remaining Victorian locations either on the Mornington Peninsula or in regional locations.

Locations in Tasmania also had a big five years, with three suburbs appearing in the top 10 national list and 31 in total rising by 100% or more.

Among them was the sleepy coastal pocket of Primrose Sands, where the median house price of $510,000 has risen from $200,000, up 155%.

Of the 96 suburbs to see their median house prices increase by at least 100%, 27 were in NSW, 23 were in Victoria, and 13 were in Queensland.

“Many of the fastest-growing suburbs, like Sunshine Beach, Byron Bay, and Anglesea are in areas that have really benefited from the sea- and tree-change trend over the pandemic,” Mr Moore said.

Western Australia recorded just one suburb where the median house price has doubled - Pegs Creek in the Karratha mining region.

The current median house price there of $460,000 is up a neat 100% from $230,000 five years ago.

South Australia was also home to just one of the 96 suburbs. Gilberton in Adelaide’s inner-north has seen its median house price jump 136% to $1.1 million, up from $465,000.

Pre Election Budget Criticised for Short Term Fixes Instead Of Long Term Solutions 

Good morning fellow members,

The big-spending pre-election budget provides short-term relief for households struggling with the rising cost of living pressures but has been criticised for failing to provide long-term solutions.

The budget delivers $8.6 billion worth of temporary cost of living measures at a time of rising inflation, with some experts warning they will add to inflationary pressures ahead of an interest rate hike that may come as soon as June.

While the budget attracted the usual mixed reaction, both the Committee for Economic Development of Australia and the Australian Council of Social Service slammed its reliance on short-term quick fixes.

CEDA chief economist Jarrod Ball said the budget's focus on temporary measures to alleviate rising costs of living will be welcomed by many.

"But the budget has only taken modest steps to permanently lift the capacity of households to navigate the growing pressures on the economy," Mr Ball said.

"The $8.6 billion of cost of living measures mostly benefit income earners and motorists, with many income support recipients receiving the least relief from cost of living pressures.

"With growing inflationary pressures and interest rate rises on the horizon, cost of living pressures will not dissipate any time soon and these measures do not provide a long-term solution."

More than 10 million low- and middle-income earners will get a one-off $420 cost of living tax offset, six million welfare recipients receive a one-off $250 cost of living payment, and the fuel excise has been halved for six months. 

ACOSS chief executive officer Dr Cassandra Goldie attacked the "flash in the pan budget", saying much of the assistance goes to people who don't need it and too little goes to those who need support.

"This budget is full of temporary fixes, when we need permanent solutions," Dr Goldie said.

The fuel excise cut would have been better spent lifting income support and boosting social and affordable housing, she said.

"Unfortunately, although the government says this is a cost of living budget, it fails to deal with the biggest cost of living, which is housing. Perversely, the housing measures it contains will very likely push up house prices and make housing affordability worse."

Treasurer Josh Frydenberg defended the cost of living measures, describing them as being targeted, responsible and delivered at a time when Australians needed it most.

"The measures we announced last night were responsible, they were targeted, they were temporary, and they were designed to provide the cost of living relief for Australians who need it most," Mr Frydenberg said on Wednesday.

The budget papers note inflation is expected to rise to 4.25% through the year to the June quarter of 2022, reflecting higher global oil prices and ongoing supply chain pressures as well as price pressures in the housing construction sector.

But Mr Frydenberg said inflation is then expected to start to moderate, which will help alleviate some of the cost pressures faced by households.

The fuel excise reduction is expected to reduce headline inflation by a quarter of a percentage point in the June quarter, he added.

Westpac Group chief executive officer Peter King said the budget strikes the right balance.

"With many Australians paying higher prices, this support will make a difference," Mr King said.

"Together with major commitments on infrastructure projects across the nation, more work on wage subsidies for apprentices and incentives for businesses to hire them, the budget strikes the right balance between providing much needed short-term assistance and lifting Australia's long-term growth potential."

The federal government is expected to soon call an election for May.

An interest rate rise is on the way

Some economists warned the budget's cost of living measures will add to inflationary pressures, although they have not changed their expectations for when the Reserve Bank of Australia will lift the cash rate from the record low 0.1%.

"The cost of living payments announced in the budget will add to near-term demand and inflation pressures in an economy where rising inflation is already a concern," Commonwealth Bank of Australia economists said, noting the fuel excise cut will reduce inflation in the second quarter.

CBA chief economist Stephen Halmarick said the extra stimulus the pre-election budget will apply to the economy is relatively muted.

"However, given rising inflation and strong employment and wages growth, we maintain our view that the Reserve Bank of Australia will raise interest rates in the near-term, with an initial increase to 0.25% expected in June this year, rising to a peak of 1.25% in early 2023," Mr Halmarick said.

AMP chief economist Dr Shane Oliver said the budget provides a "magic election pudding" of more spending but lower deficits.

"The pre-election cash splash... risks overstimulating the economy at a time when it is already strong, further adding to inflationary pressures and adding to the amount by which the RBA will have to hike interest rates," Dr Oliver said.

He said the extra stimulus in the budget increases the chance that the first rate hike in June will be a 40 basis points rise rather than 15 basis points. That would take the cash rate to 0.5%, with AMP expecting it to reach 1% by the end of the year.

Westpac chief economist Bill Evans said the total spending in the budget is a bit more than expected but he did not expect the measures to massively increase demand and change the RBA's thinking.

"It's a bit more than I expected but I don't think it's enough to say shock horror - the Reserve Bank governor will go to work tomorrow and say we must raise interest rates," Mr Evans said.

Mr Evans, who expects the first rate increase will be in August, noted the RBA board is still being patient and is in a "wait and see" mode.

National Australia Bank economists also noted "there is as much politics in this budget as economics", but said the budget did not change their expectations for monetary policy.

"The RBA will move soon to moderately increase rates - we expect that process to start by August this year," the NAB economists said.

Housing supply remains a key issue

Property industry groups have praised the budget's key housing measures but also warned supply remains a major issue in addressing affordability challenges.

The budget’s major housing initiatives were an additional $2 billion in low-cost financing to community housing providers and a significant expansion of schemes helping first-home buyers struggling to save a deposit as property prices surge.

Property Council of Australia chief executive Ken Morrison said Australia's economic recovery has been remarkable and the budget confirmed strong conditions are likely in the year ahead.

"However, it is clear that the budget results are contingent on a strong bounce back in population growth and there are risks that falling housing supply also becomes a looming drag on the economy," Mr Morrison said.

The budget highlights the extent of the housing supply crisis, predicting dwelling investment levels will drop from 5% growth in 2021/22 into negative territory (minus 0.5%) by 2023/24, he pointed out.

"Both HomeBuilder and the expanded Home Guarantee Scheme are welcome demand-side measures, and cannot address the supply-side issues which increase the cost of new homes," he said.

The Urban Development Institute of Australia said the budget backs the housing and construction industry to prime the economic recovery and start tackling the affordability crisis.

South East Queensland set for $1.8b

"CITY DEAL"

Courtesy Business News Australia 

A new South East Queensland City Deal worth $1.8 billion has been announced today by the State and Federal Governments, with funds to build infrastructure projects in the region.

As part of the City Deal, a new $450 million Gabba Brisbane Metro Station will be built, as well as investments in social and economic projects, a $150 million ‘Innovation Economy Fund’, funding for a waste management program, and $70 million for digital connectivity projects.

The City Deal is supported by a $667.77 million investment from the Commonwealth, $618.78 million from the Queensland Government, $501.62 million from SEQ Council of Mayors plus $75 million from the industry.

“This is a partnership for Queensland jobs and Queensland investment to deliver a stronger economy and a stronger future,” Prime Minister Scott Morrison said.

“South East Queensland is one of the fastest-growing regions in Australia, and with the population expected to continue to grow, it is crucial that we invest in the infrastructure it needs to thrive for decades to come.

“From Brisbane to Toowoomba, Ipswich to the Sunshine Coast and everywhere in between, this Deal delivers for South East Queenslanders.”

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Queensland Premier Annastacia Palaszczuk said the project will prepare SEQ for the 2032 Olympic and Paralympic Games, with more than 30 projects set to generate more than 2,000 jobs.

“I have always said we work best when we work together,” the Premier said.

“The City Deal provides the vital infrastructure to plan for our growing population.

“That includes new transport links for the Gabba in time for the 2032 Olympic and Paralympic Games. The winners are Queenslanders.”

Key projects in the City Deal include:

• $450 million for the Gabba Brisbane Metro Station, to deliver enhanced transport connections and support the 2032 Brisbane Olympic and Paralympic Games;
• $285 million for the SEQ Liveability Fund to deliver projects of social and economic priority for the councils;
• $150 million for the SEQ Innovation Economy Fund to support capital projects that promote and grow the region’s innovation economy;
• $105 million for resource recovery infrastructure to develop a region-wide approach to managing waste and progress the region to a circular economy;
• $70 million for digital connectivity projects to support place-based telecommunications infrastructure and improved digital connectivity.

Queensland Deputy Premier and Minister for State Development Steven Miles said the cooperation between all levels of government will ensure that the region has the right infrastructure in place as the population grows.

“We have seen a recent surge in people looking to call SEQ home, and by 2041, the region is set to grow to 5.4 million residents,” Miles said.

“A new Gabba Metro Station will improve linkages between cross-river rail and the Brisbane Metro at the Woolloongabba Olympic venue that create long-term improvements to the public transport network and transformational city-shaping opportunities.”

The announcement comes days after the Federal Government expanded its commitment to the jointly funded Perth City Deal, which is a major infrastructure project for the Western Australian capital that was originally signed in September 2020.

Both governments announced an additional $49 million to build the new Edith Cowan University (ECU) campus and $25 million each to the Swan River Bridge construction project.

The new funding from both the Federal and WA governments brings the total value of the Perth City Deal to $1.69 billion. In addition to the ECU build and the Swan River Bridge, the City Deal includes:

• Investment in Curtin University's Historical Heart Cluster, including the expansion of the Graduate School of Business and Law School and the creation of a healthcare and clinical training facility.
• Investment in Perth's cultural attractions, including the Perth Cultural Centre rejuvenation, the Perth Concert Hall Redevelopment and the WACA redevelopment and the public swimming pool. These investments will create vibrant, safe and attractive offerings delivering improved liveability, cultural and tourism outcomes for the city.
• Investment towards the celebration of Western Australia’s rich Aboriginal culture and history, including important community consultation and engagement, feasibility studies and preliminary design work for the Perth Aboriginal Cultural Centre.
• The CBD Transport Plan, is an investment to improve active and public transport accessibility and safety in the CBD, increasing the attractiveness and sustainability of the city for residents and visitors.

JANUARY/FEBRUARY 2022

FULL RECOVERY 2023 FOR CRUISE LINES

The global cruise industry is set to return to full service by August 2022, owing to climbing vaccination rates and border reopenings, whilst passenger volumes are forecast to return to pre-pandemic levels by 2023, according to the Cruise Line International Association in its 2022 report. 

Known as being the peak industry body for cruise operators, the CLIA represents nearly 50 global cruise companies, and close to 300 cruise ships from operators including Norwegian Cruise Lines, Carnival Cruise Lines, Royal Caribbean International - 3 out of 4 of Asia’s largest cruise operators (the last one being the now-troubled Genting Hong Kong). 

Pre-pandemic, Asia had 79 cruise ships operating in its waters, though this number slumped to 34 in 2020. 

Recovery in the waters

Looking into the industry’s recovery trajectory in 2022, CLIA said it projects 272 ships will be in operation globally in 2022, while another sixteen new ships are set to make their debut this year.

The cruise association was also optimistic about passenger volume recovery, with baseline projections pointing to pre-pandemic passenger volumes by 2023. Upside projections move this timeline to as early as the end of 2022.

Meanwhile, all three (downside, baseline, and upside) projections unanimously expect global cruise passenger volumes to exceed 2019 levels by 2024. 

Unfortunately, there is one major Asian cruise operator that is unlikely to be in a position to partake in the industry’s recovery.

Last month, Genting Hong Kong’s Dream Cruises unit filed a winding-up petition, with its parent company warning of a potential default on debts of $2.77 billion. The company’s Crystal Cruises is also said to be closing up shop and letting go of its U.S. employees only days after its ships were seized in the Bahamas for unpaid fuel bills, according to those close to the matter. 

Despite this, the CLIA remains confident of a solid restart of the cruise industry after nearly two years. 

Whilst 70% of cruise-related businesses and organizations reported layoffs and furloughs during the pandemic, approximately 60% of these businesses are now hiring, it said. 

Responsible cruise tourism spotlight

Interestingly, a large portion of this year’s State of the Cruise Industry report focuses on sustainability, the environment, health, and safety protocols, perhaps in a bid to encourage more governments to allow cruise shipping to resume in their localities. 

CLIA quoted the Global Economic Contribution of Cruise Tourism report from BREA in 2019, finding that every 24 cruisers create one full-time equivalent job. It also noted that 6 out of 10 persons who have taken a cruise say they have returned to a destination they first visited in a cruise ship. 

New technologies have already been employed in its members’ cruise lines to mitigate the potential spread of Covid-19.

These include the use of mobile apps to navigate ships, track kids, monitor onboard spending.

In MSC cruises, they’ve employed in-cabin voice-activated AI, acting as a receptionist for general inquiries. 

Cruise ships have also adopted e-mustering, rather than in-person mustering, RFID wristbands to use as a track and trace device, and other advanced cleaning and sanitization, ventilation and contactless technology. 

Passengers are also required to be fully vaccinated and undergo Covid-19 testing prior to boarding. 

The association has set targets in its pursuit of more environmentally friendly ships and voyages, including 26 LNG-powered ships by 2027. LNG is considered one of the cleanest marine fuels. 

Notable trends continue

Unsurprisingly, the Caribbean, Bahamas, and Bermuda remained the top destinations by average passenger volume between 2018 and 2020, accounting for 44% of passenger volume.

Asia took second place in this regard, accounting for 13% of passenger volume. 

This reflects the top five source regions for cruisers - with 51% of cruise passengers coming from North America, 21%  from Western Europe, and 12%  from Asia. 

The average age of the cruise tourist has also remained largely the same over the last three years, rising slightly to 47.6 years of age. The CLIA continues to see millennials as the most enthusiastic cruisers of the future, just in front of Gen-X.