New Zealand itineraries, driven by P&O Cruises' longer season and more short coastal options, led the strong domestic growth (up 177 per cent) followed by the South Pacific (up almost 50 per cent) and Asia (up 27 per cent).
The association's Australasia managing director, Joel Katz, said New Zealand outperformed other established key markets as more ships came to this region.
The market was well on track to reach the target of 100,000 passengers by 2020, with just 3 per cent growth a year needed to reach that number.
Long-haul fly cruise to Europe fell in 2016 by 10 per cent largely reflecting the impact of geopolitical events. The number of Kiwis cruising the Mediterranean fell by 13 per cent to 8553.
''Although it [Europe] remains a strong destination it has fallen and that is driven by geopolitical events. The benefit of that is that the local market has increased,'' said Katz.
Around the world 25 million people took a cruise last year.
While New Zealand was one of the smallest cruise markets in passenger numbers, with less than half a per cent of the world's cruisers, it is ''certainly punching above its weight in terms of growth and market penetration''.
The most popular destinations for Kiwis are the South Pacific, followed by New Zealand.
Together the destinations account for almost 57 per cent of New Zealand's cruise passengers - a growth of 80 per cent year-on-year.
Katz said the Government and other authorities needed to ensure that there was adequate infrastructure planning to sustain the growth.
In Auckland during summer the biggest cruise ship to ever visit, the Ovation of the Seas, had to anchor in the harbour because the cruise berth was not long enough.
"With many of these local cruises calling at the regional ports around the New Zealand coastline, local communities benefit from the injection of valuable tourist dollars into the local economies.''
New Zealand and Australian visitors spent $85 million here last year.
Cruise ship companies have attracted flak for not investing in infrastructure themselves.
Katz said that in other places the industry does.
''It is happy to put its money where its mouth is - the important thing is that the infrastructure is incorporated into the overall strategy and that allows the conversations to be had.''
The annual source market report is based on data received from CLIA's cruise line members, which account for more than 95 per cent of the world's cruise passengers.
P&O is introducing winter cruising next year while rival Royal Caribbean says its Radiance of the Seas will offer more cruises from Auckland, with three new 'open-jaw' itineraries to/from Melbourne and Sydney.
RCL Cruises' managing director, Adam Armstrong, said that the record breaking growth in Kiwis cruising was a testament to the strength of the ocean cruising market in this country.
"New Zealand is of particular importance to us as source market because Kiwis love to travel - near and far. In 2016, we saw a 20 per cent increase year on year for Kiwi cruisers on domestic itineraries, as well as a 20 per cent uplift for Kiwis on Caribbean cruises," said Armstrong.
