After a strong, relatively stable first two months of Wave season, the Iran war is making a limited impact on the cruise industry in March.

Both Travelsavers and World Travel Holdings report that demand for Mediterranean cruises has decreased since the war began on the last day of February.

Also, cruise prices have slightly increased, said Josh Tolkin, senior vice president of supplier relations for World Travel Holdings, operator of the Dreams Vacations and CruiseOne agency franchises and one of the U.S.'s largest cruise sellers.

"Importantly, the impact appears localized to the Mediterranean market," he said. "Our broader cruise business continues to perform in line with expectations."

At Travelsavers, softening demand in the Mediterranean has been for close-in bookings, while bookings for 2027 Europe cruises continue to be strong, said vice president of supplier relations Lori Kostecki.

There haven't been swaths of cancellations, and there's still high demand for Caribbean, Alaska and Canada/New England cruises, she said, with some travelers choosing to "plan a little further out." Overall, March thus far has "remained largely steady," she said.

The Iran war is likely to introduce new "choppiness" to cruise booking trends, though it won't completely upend this Wave season's strength, said Deutsche Bank analyst Chris Woronka.

"There's going to be bad days and very good days -- a little bit less consistency and a little more volatility in the overall booking pattern," he said.

Cruise company stock prices have dropped as oil prices have surged during the war. Woronka expects that higher oil prices will result in higher cruise prices, and that could have an effect on bookings.

That doesn't mean people won't book cruises, it just means booking patterns will be less stable, he said.

"Companies like predictability and stability, and that's not really what you have at the moment," he said.

Booming luxury, river

The first two months of Wave were a story of strong bookings, particularly in the luxury cruise sector.

After a healthy January at World Travel Holdings, demand in February remained high, with results "even stronger year over year," Tolkin said.

Travelsavers and sister consortium Network of Entrepreneurs Selling Travel (NEST) reported expedition and river cruises performed particularly well in January and February. Expedition cruise sales were up 44% year over year, and river cruises were up 23%.

Travelsavers and NEST also said luxury cruise sales outpaced the premium (Celebrity, Princess and Virgin Voyages, for example) and contemporary (Carnival, Royal Caribbean, Norwegian Cruise Line and MSC) categories. Luxury cruise sales increased 15% year over year, while premium was up 7% and contemporary 4%.

Analysts have attributed this trend to the relative economic strength of wealthier Americans in what has been described as a K-shaped economy -- one arm of the "k" is significantly longer than the other.

Travelsavers also has seen triple-digit growth for sailings in the Americas, particularly for Panama Canal, Alaska and Canada/New England cruises, compared with 54% growth in Europe. 

Booking habits back to normal

Woronka said this Wave season has shown that booking habits are normalizing six years after the pandemic. The sense of urgency and feverishness, a phenomenon previously described as revenge travel, has mellowed, he said. 

Cruise clients have "been on many cruises now since the restart, and they're just seeing more inventory," he said.
One indicator of this normalization has been the scale of promotional deals in the last few months, such as an increase in cruise and air bundles, he said.

"You don't have to look too hard to find a better deal than you could have gotten a year ago," he said.

The deals aren't an indicator that the cruise market is in trouble but rather that it is coming down from an elevated period of demand while fleet sizes continue to grow.

"This is what happens after a certain period of time when people have been out there for a few years," Woronka said. "There is more supply, and this is just a natural normalization."