Cruise

Introduction to the cruise industry

Identify factors that demotivate potential cruisers
Understand Selling Cruises and Cruise Products
Understand Planning the Itinerary and other key
operational concerns
Discuss the future of the cruise industry
CLIA (2012)
CLIA (2012)
CLIA (2012)
CLIA (2012)
Seasite.com
 The cruise industry has a US$15 billion turnover and
employs over 100,000 shipboard officers and crew as well
as approximately 15,000 employees ashore (Ward, 2001)
 About 16 million cruise passengers cruised in 2011 and
North American contributed 70% or 11.2 million
passengers. Annual occupancy rate exceeding 103% in
2011, demand in cruise industry continues to outstrip
supply in tying economic environments (CLIA, 2012)
 Forecast 17 million guests in 2012, a 4% increase over
2011 and commensurate with the added capacity of 12
new ships debuted in 2011

CLIA (2012); Gibson (2006)

 The industry’s growth is headlined by the Caribbean, the
dominant cruise destination as it accounted for 39.8% of
all itineraries in 2011. Passenger numbers continue to
remain consistent and high for the Caribbean, despite
other rising cruise destinations

 From a product standpoint, cruise ships offering an array

of feature-rich innovative facilities, amenities and
services that exceed the expectations of a growing
population of travellers.

CLIA (2012); Gibson (2006)

 Factor Reason
Cost Cruising is perceived to be expensive
Exclusivity Cruising is thought to be a domain for the
wealthy and elitist in terms of social groupings
Family Cruising is not felt to be for people with
prohibitive children but rather oriented toward older
groups
Claustrophobic The ship is thought of as a constraint and quiet
space a premium
Seasickness Concerns about coping with seasickness
influence decision making

Dickinson & Vladirmir (1997)

 4 types of cruises based on characteristics that define the on-board
lifestyle and overall vacation experience

1. First Class Cruise Lines/Mass Market Lines – resort-style

vacations
Cruise Lines
Carnival Cruise Line
Costa Cruise Line
Disney Cruise Line
Mediterranean Shipping Company
Norwegian Cruise Line
Royal Caribbean International
General characteristics
Large ships
Pax capacity: 2000-2500
Small cabins
Good food
Family friendly
Fitness/sports-oriented
3-7 nights itinerary
3-4 star service
Price point: $-$$$
Key Word: Quantity

Marvelcruises.com
2. Premium Cruise Lines – resort-style vacations

Cruise Lines General characteristics

Celebrity Cruises Medium-sized ships

Pax capacity: 1500-2000
Holland America Line Large cabins
Fine dining
Oceania Cruises Family friendly and adult-oriented
Spa-oriented
Princess Cruises
7-14 night itineraries
4-5 star service
Price point: $$-$$$
Key Word: Quality

Marvelcruises.com
3. Luxury Cruise Lines – high quality and personalized services

Cruise Lines General characteristics

Crystal Cruises Small ships

Pax capacity: 300-800 people
Cunard Line Huge cabins or Suites
Gourmet cuisine
Regent Seven Seas Cruises Not family-friendly
Spa-oriented
Seabourn (The Yachts of) 10 or more night itineraries
5-6 star service
Sea Dream Yacht Club Price Point: $$$$$
Key Word: Exclusivity
Silversea Cruises

Marvelcruises.com
4. Speciality Cruise Lines – unique experience at unspoiled places

Cruise Lines General characteristics

Amadeus Cruise West Very small ships

Waterways Pax capacity: 100-300
Mixed cabin accommodations
Delta Queen Norwegian
Mixed dining options
Steamboat Co. Coastal Voyages
Not suitable for most families
Orient Line Viking River Few fitness or spa options
Cruises 3-20 night itineraries
3-5 star service
Peter Deilmann Windjaman
Price point: $$$$-$$$$$
Barefoot Cruises
Key word: Adventure
Star Clippers Windstar Cruises

Uniworld Discovery World

Cruises

Marvelcruises.com
Walker (2013) classify the three segments of the cruise industry:

Mass market – income range between US$35,000-US$74,000 and

average cost per person between US$95-US$195 per day depending
on the location and size of the cabin

Middle market – income range between US$75,000-US$99,000 and

average cost per person between US$175-US$350 per day. Ships
can cater to 750 to 1,000 passengers. Examples are Princess
Cruises, Norwegian Cruise Lines, Royal Caribbean, Holland America
Lines, Windstar Cruises, Cunard Lines and Celebrity Cruises

Luxury market – income above US$100,000 and average cost per

person of more than US$400 per day. Examples of six-star vessels
are Sebourn Spirit, Seabourn Pride, Crystal Harmony, Radisson
Diamond, Silversea Silver and Wind.

Walker, 2013
 Cruise operators or Cruise brands
- dominate the cruise market (Berger, 2004).

- wholesalers and travel agents as retailers or brokers

(Dickinson & Vladimir, 1997).

- establish brand values and customized cruise products

to meet or ideally exceed passenger expectations.

- use travel agents as primary distribution channel, sell

directly to passengers, or online agencies.

Gibson (2006)
 Cruise operators or Cruise brands
- formed strategic alliances e.g. Luxury Alliance consists
of Crystal Cruises, Orient-Express Trains and Cruises,
Silverseas Cruises, Leading Hotels of the World, Relais
and Chateaux (Luxury Alliance, 2005)

- positive word-of-mouth is a useful marketing tool

e.g. Princes Cruises operate an incentive club ‘Captain
Circle’ offering priority discounts, special events on
board, preferential services and other benefits based on
level of membership (Princes Cruises, 2003)
- the cruise product has three economic features

Gibson (2006)
 Cruise operators or Cruise brands
- the cruise product has three economic features:
a. Heterogeneity (unique experience for individual pax)
b. Inelastic (perishable if not sold)
c. Complementary (series of complimentary services that
form the cruise experience)
(i) accommodation–cabins
(ii) dining on board–food and entertainment schedule
(iii) bars
(iv) casino-above 18 and proper dress code
(v) shops
(vi) beauty care and hair care

Gibson (2006)
 Cruise operators or Cruise brands
- Classifications by Status and Value (Bjornsen, 2003)
Definition Description
Megaliner Above 2000 pax

Superliner 1000-2000 pax

Midsize 400-1000 pax

Small Less than 400 pax

Boutique Special purpose, less than 300 pax

Sailing Vessel Ship powered by wind

River Barge Cruises on inland rivers

Gibson (2006)
 Cruise operators or Cruise brands
- Classifications by Status and Value (CLIA, 2005c)
Brands Description
Luxury Best quality in comfort, cuisine and attentive
services, e.g. Crystal Cruises ‘six star’ service
Premium Above-average food, service and amenities, more
family-oriented than luxury category
Resort/ Floating resorts with ice rink, golf range from
Contemporary mid-size to megaliner
Niche/ Unique cultural or adventure activities in specific
Speciality destinations for experienced travellers
Value/ Classically designed for new cruisers with fewer
Traditional facilities than megaships, self-service dining

Gibson (2006)
 The cruise tourism system (Davidson & Maitland, 1997)

Generating region – the place the tourists come from. Tourists faced
‘push factors’ e.g. Disposable income, leisure time, motivation.
Information formed ‘perceptions’ and stimulate further visits.
Destination region – the place tourists will go to

Gibson (2006)
 A good cruise destination or good port of call (Lloyds, 2003a)
- Analysis of attractors
Unique experience
Average 35ft water at low tide
Deep draft sheltered berths
Gateway port with easy access
to destinations
Port an attraction itself
Duty-free
Suitable as port of call
Island port with attractions
Exciting nightlife
Heart of the city location
Shopping
Capacity for megacruise ships
Accessible passenger loading
bridge, mobile passageway
Comfortable, efficient and secure
Dual-ship terminal
Warehousing storage
International airport nearby
Water sports and land sports
Gibson (2006)
 Analysis and Evaluation
- Besides Porter’s Five Forces, BCG Matrix, there are others:
a) Tourist Area Life Cycle (Butler, 1980)

Gibson (2006)
 Analysis and Evaluation
- Besides Porter’s Five Forces, BCG Matrix, there are others:
a) Tourist Area Life Cycle (Butler, 1980)
(i) Exploration-small number of tourists, access is difficult
(ii) Involvement-tourists number grow and interaction increases
with local community
(iii) Development-resort is promoted, more visitors and
imbalance of locals to tourists at peak times, facilities improved
(iv) Consolidation-tourism is a major contributor to local
economy, resort gained international reputation
(v) Stagnation-resort loses fashionable status, various social
and environmental problems arise

Gibson (2006)
 Analysis and Evaluation
b) Doxey’s Irridex (1975)

Gibson (2006)
 Analysis and Evaluation
b) Shaw and Williams (2002) suggest that Doxey’s Irridex
(1975) is useful in considering impacts on a local community by
reflecting the community’s reaction to tourism as an evolving
industry
(i) Euphoria – visitors are welcome and there is little planning
(ii) Apathy – visitors are taken for granted and contact becomes
more formal
(iii) Annoyance – saturation is approached and locals have
misgivings. Planning to improve infrastructure than limiting
growth
(iv) open expression of irritation and planning is remedial, yet
promotion is increased to offset deteriorating reputation of
resort

Gibson (2006)
 Logistics, Positioning and Planning
- Itineraries commence from the port of embarkation and
conclude at a port of disembarkation, which may be the same
or different place

- Many cruises are scheduled for 7, 10 or 14 days to correspond

with customer availability and to meet customer expectation for
duration

- Many itineraries are aimed to create an arrival time at port in

the morning and a departure time in the mid-to late-afternoon

- Ports that provide connection and location for cruise and tour
vacations

Gibson (2006)
 Logistics, Positioning and Planning
- Moutinho (2000) states that planning should be ‘integral’, that
is a multidimensional and systematic approach so it can be
viable in the long term

- Good tourism planning can provide long-term benefits to the

local population in terms of resulting tourist infrastructure
(transport, communication network, and commercial facilities).
Superstructure (hotels, restaurants, attractions can also benefit
the local population (Goeldner & Ritchie, 2003)

- Regulations must be considered in terms of mobility of people,

goods and capital, health and safety laws, environmental
protection, consumer protection, shipping, ownership of key
facilities and security

Gibson (2006)
 Logistics, Positioning and Planning
- Find out if the destination, products and services on board
meet the psychographic needs (values, motivation) and travel
preference of passengers
- Cruise itineraries are planned to ensure that:
a) fuel consumption is at an economically optimized rate
b) the arrival time and departure time is as per the schedule
c) the mix of destinations is approximately balanced to meet
consumer needs
d) regulations are compiled with
- Design and promote optional shore excursions through cruise
brochures, website, ship’s TV, word-of-mouth, promotions

Gibson (2006)
 Organizational chart

Hotelmule.com
 Customer service – quality of products and services

 Managing food and drink operations – food

production and service delivery systems include
menu, staffing and food hygiene standards

 Health, safety and security concerns

 Training and Learning on Board – upgrade staff’s

attitude and skills in serving passengers

Gibson (2006)
 Rising demand for cruising
means larger ships with
resort-like design, numerous
activities, and amenities such
as ‘virtual golf’, pizzerias and
caviar bars.
Sun Princess in Brisbane

 With only 10% of the cruise

market tapped and with an
estimated market potential of
billions, the cruise industry is
assured of a bright future

Walker (2013)
 Gibson, P. (2006). Cruise Operations Management.
Butterworth-Heinemann
 Walker, J.R. (2013). Introduction to Hospitality. 6th Edition.
Pearson
 Cruise Industry News-Asia Pacific Special Report 2012
 http://www.cruiseindustrynews.com/flip/asia2012/HTML/