WATER

TRANSPORTATION
Part II
 DEVELOPMENT OF CRUISE INDUSTRY
• In 1821, the first cruise ship was launched by King
Charles IV of Sweden.
• Curacao, the first ship to provide regularly scheduled
passenger service sailed under the flag of Ireland in 1824.
• In 1934, Great Britain launched the famous transatlantic
liner, the Queen Mary.
• The passengers of the Queen Mary were offered every
conceivable facility for comfort, safety and entertainment.
• It could carry more than 2,000 passengers, with a crew of
1,100.
• The Queen Mary and the Queen Elizabeth were used
to transport British assault troops during World War II.
• In addition to 1,000 member-crew, the Queen Mary
accommodated 15,000 soldiers.
• The Queen Elizabeth II was launched in 1967 and
made its maiden voyage in 1969.
• This ship carries passengers on a cruise a round the
during the winter, while from spring until December,
the Queen Elizabeth II makes regular transatlantic
crossings
• Transporting passengers across the Atlantic Ocean
was the main business of the big ships.
• A commercial jet aircraft transported passengers across the
Atlantic Ocean in 1958 for the first time, and marked the
end of the dominance of the big ships.
• Ship travel had become little more than curiosity by 1970
• Increased fuel price and decreased demand prompted many
cruise lines to cease operation
• Cruise Lines International Association (CLIA), the cruise
industry is the fastest growing segment of the travel
industry.
• Both ship numbers and passenger numbers are growing.
• The cruise industry enjoys a very high level of passenger satisfaction and repeat
business.
• Cruises achieve profitability through profit centers such as casinos, spas, alcoholic
beverage sales, shopping, shore excursions, and pre- and post-cruise packages.
• The main purpose of cruise is to provide a resort experience rather than
point-to-point transportation.
• It has established itself, though the modern-day cruise industry is barely 25 years
old, as an important component of the United States travel and tourism industry
• Often referred to as “floating hotels”, but to many people, a cruise is more than a
vacation at sea.
• To some passengers, a cruise is a romantic interlude, a honeymoon, or a wedding
anniversary.
• Ports of calls are the destinations at which a ship docks.
• A typical cruise fare includes meals, accommodations, entertainment,
recreation, and activities for children and teenagers
• Ward (2000) has given his justification on why people are attracted to cruise
• accommodation, meals and entertainment are included in the price;
• fly/cruise package holidays offer flights to the port of departure;
• a wide range of fitness and sports activities are available;
• a number of different interesting places can be visited without having to change
passenger’s accommodation;
• services like currency exchange and guided tours are provided; and,
• food, language and surroundings are familiar.
• Demand-supply relationship, Prosser (2000) indicates that there is no sector demonstrates
the dynamic character of tourism better than ocean cruise package holiday.
• In fact, ocean cruises have traditionally occupied a niche as an elite, high-cost sector of the
tourism market.
• Indeed, cruises seemed in decline as jet aircraft gave ready access to new destinations
worldwide by the early 1980’s.
• Yet cruise holidays became one of the fastest growing and profitable sectors of the tourism
industry.
• Prosser (2000), these shifts illustrate several fundamental attributes of tourism processes, listed as
the following:
• The importance of fashion, status, prestige and new experiences;
• Progressive market penetration from a trend-setting elite;
• Increasing dominance of transnational corporations;
• The use of economies of scale to reduce unit costs and so broaden the potential market; an
increased range of options around a core format; and,
• Demand and supply are dominated by more economically developed country (MEDC) –
two-thirds of world demand and cruise origins come from North America although cruise
itineraries are global.
i.

CRUISE TYPES AND CATEGORIES

Categories of cruise as indicated by Gee, Makens and Choy (1997):

i. Resort Cruises
• The majority with Carnival Cruise Lines, Norwegian
Cruise Lines, and Royal Caribbean Cruise Line
leading this category
• Ships are large; 1000-2000+ passengers.
• Food and beverage are plentiful
• Destinations are normally warm climate places
• Markets are highly segmented e.g. families with
children and homeowners
• Shipboard activities such as entertainment, aerobics
and bingo are emphasized.
Norwegian Cruise Lines
• Short itineraries: 3 to 7 days.
 ii. Deluxe or Luxury Cruises

• High level of personal service.

• Capacities vary from 125 to 950 passengers.
• Dining is elegant with crystal tableware and fine china.
• Cabins are usually suites.
• Itineraries are 14 days or longer with some as long as a
month.
• Entertainment consists of classical music, shows, and
educational lectures.
• A high crew to passenger ratio. For example, Seabourn
Cruise Line staffs 140 crew members to serve a maximum Seabourn Cruise Lines
of 200 passengers.
 iii. Adventure or Exotic Cruises

• Likely to explore narrow inlets and allow passengers to wade

ashore.
• Education is offered as entertainment with experts in various
fields giving onboard lectures covering topics of relevance to the
trip.
• Ships may be older and smaller having been retired as resort
cruise ship.
• Ports of call are out of the ordinary.
• Tourist-type shopping and sightseeing less important than
discovering new places and experiences.
• Basic dining services with substantial fare.
• Passengers are older, well-educated; many are professionals and
interested in environmental and international topics.
• Foster (1996), cruises are classified in four categories
i. Volume cruises
• Also called mass-market cruises, account for approximately 60 percent of all
cruise revenues.
• Three types: short cruises (2 to 5 days), standard-length cruises (7 days), and
longer cruises (9 to 14 days).
• Include budget and standard cruises.
• Accommodations and services are comparable to most standard hotels.
• Emphasize short itineraries and quick turnover (the number of times that new
passengers are brought on board) – fast turnover means more cruises can be
conducted over a shorter period of time generating more revenues.
• Examples of successful mass-market cruise lines: Carnival Cruise Lines, Kloster
Cruise Limited, and Cunard Cruise Lines
 ii. Premium cruises
• Also known as upscale cruises, account for about 30 percent of all cruise revenues.
• Range from one-week sailing up to three months.
• Accommodations, facilities, entertainment and meal service equivalent to the facilities of a first-class
resort hotel.
• Examples include Royal Viking Cruises and Cunard Cruise Lines.
iii. Luxury cruises
• Account for about 6 percent of the cruise market.
• Offer high level of elegance and comfort, the most expensive type of cruise.
• Luxury liners feature long itineraries and exotic destinations.
• Examples: Seabourn Pride, with capacity of 212 passengers, sails from New York to Europe, West
Africa, the Carribean, and South America all in one itinerary, in 6 to 12 months of cruising time.
• Other examples: Crystal Cruises, Renaissance Cruises, and Oceanic Cruises.
iv. Specialty cruises
• Include scuba diving, archaeology, whale-watching, biology cruises.
• Ships used for such cruises are specially equipped passenger vessels with only basic food
and beverage service.
• Popular among well-educated single travelers and couple without children.
• Examples of specialty itineraries include cruises to the Amazon River, Antarctica or the
Aleutians.
Carnival Cruise Lines Cunard Cruise Lines

Crystal Cruises Amazon River

• Nickerson (1996), cruise lines are certainly the largest component of the cruising industry
i. Sea cruises
• Range from one-day “see nothing” trips (as low as $70 per person) to three- month
around-the-world trips (may cost in excess of $24,000 for two people).
• Typical sea cruise is three to seven days and stops at various ports for the passengers to
experience local customs.
• Promoted as a vacation – the stops along the cruise are an added luxury to an aboard-ship
vacation of sun and relaxation in Mediterranean or the Caribbean or viewing glaciers and
scenic mountains along the Alaskan and Canadian coasts.
• On-board entertainment center, with swimming pools, 24-hour buffets, health spas, themed
special events and recreation centers.
• Destinations vary – the Caribbean and Mediterranean are the most popular warm weather
cruises; other destinations include: the Bahamas, San Juan, Mexico and Mexican Rivera, the
Canary Islands and Morocco, and the transcanal trips through Panama Canal. Other North
American trips include the Pacific coast from Los Angeles to Vancouver and the Alaska
vacation up to Skagway or Prince William Sound. Northern Europe is also popular for its
scenery in and around Norway and Sweden
• Gambling cruise to nowhere is another type of sea cruise, quite common along some U.S.
coastal area.
ii. River Cruise

• Can be short (two to three hours) or long trip (up to 12 days).

• The Mississippi River has two popular cruises: the Delta Queen and
Mississippi Queen; give travelers sense of a historic way of travel in
North America on paddle-wheel ships.
• Becoming a popular tourist attraction for many communities.
• Many riverboats are used for wedding receptions, company
retreat, and other group parties, some provide dinner as well as
entertainment on board.
• Winter season is a disadvantage for river cruise as many northern
freeze during this time; many riverboats must close down for the
season.
iii. Lake cruises and ferries

• Common in some of the Great Lakes.

• Combined as a ferry and a cruise, travel to a destination across the
lake, then turns around for the return trip.
• Ferries also transport vacationers’ vehicles across Lake Superior,
travel day or night across the lakes.
• Ferries are common in New York and Seattle, between Alaskan
and Canadian islands and the mainlands, across English Channel,
and around other spots where people need to get across of water
with their car for work or play on the opposite shore.
• Ferries go to areas where plane service is nonexistent and
automobiles have limited ways of reaching the destination.
• Short distance ferries usually have informal seating and decks
space for the passengers, while long distance ferries may have
cabins, food service and recreation rooms for passengers.
iv. Freight cruises

• Tourists can also travel via freighter lines worldwide.

• Accommodations are similar to cruise lines with little or no
on-board entertainment.
• Advantage: passengers will have a chance to see ports
around the world that are never be used by cruise ship.
• Attract adventuresome travelers who do not need
pampering and who like to view the world from a less
touristic stance.
• Passengers are limited to 12 or fewer, the chance of getting
on a freighter is limited.
• As travelers look for adventure in their vacations, freight
cruising will become more popular.
• Some freighters allowing passenger to disembark at
destinations of their choice and return by plane.
 v. Charter yachts and sailboats

• Chartering a yacht or sailboat was considered an

activity for the very rich, but now it is within the
reach of people with middle incomes.
• Either for a few hours or an entire vacation, charters
can be arranged.
• Charter can also be rented with the sailor included or
to experienced sailors who sail their own boats.
• As many owners of the boats cannot keep up with
the maintenance, they usually allow their boats to be
chartered – known as “yachtaminium”, a concept like
the time-share of condominium: time on a yacht is
purchased by the consumer who then can trade for
time on another yacht in another marina across the
country.
 CRUISE MAIN ROUTES
• Major cruise routes of the world can be located in seven regions of the globe. The
regions are
• The west coast of North America, including Mexico, the USA (including Alaska) and Canada
• The Mediterranean, divided between the western and eastern sectors
• The Pacific islands and Far East
• The Baltic Sea, northern European capitals and the North Cape
• West Africa and the Atlantic islands of the Canaries and Madeira
• Round the world.
 CRUISE LINES MARKETING STRATEGY

• Nickerson (1996) believes that cruise line marketing strategies should be based on the
marketing concepts of product, price, place, and promotion
1. Product
• The product is the ship, service and amenities on board, and the route.
• Product is provided with quality and service.
• Nothing that price, place, or promotion can do to keep customers to come if the
product is outdated.
• The ship as a product should be comfortable, appealing and interesting to the passengers:
• cabins, the hotel rooms afloat, must be comfortable and provide privacy for passengers when
needed; the rest of the ship should provide entertainment to the guests;
• the ship must also be equipped with large multipurpose rooms for meetings, conferences or
dancing;
• the ship must also have health spas, swimming pools, fully equipped gymnasium and other
recreational facilities;
• the dining room of the ship must be superb because eating on a cruise is one of the most popular
activities on the vacation;
• the ship must also have other rooms on board such as a doctor’s office or clinic, casino, and
clothing and souvenirs shop.
• The amenities on board start with quality service: ratio crew member to passenger should guarantee a
high level of service to every passenger; variety of services should be offered and performed
professionally.
• The route as a product is actually a key marketing strategy: shorter trips have
been added to the cruise line schedule to provide a cruising
• Opportunity for people on lower or fixed incomes – this strategy is actually
to obtain repeat customers since for people have taken a cruise, they are
more likely to take another one of a longer duration.
• The actual route and stops en route are also of considerable importance: for
warm weather cruises, they usually stop for several hours in one or more
ports to allow passengers to shop and experience other culture.
2. Price
• Price of cruise varies according to cruise duration, ship age or profile, season and
cabin choice.
• The longer the trip, the more it will cost.
• Season is also an important factoring price: most people want to get away from the
cold north in the winter and bask in the warmth of a tropical climate.
• For the ship profile, the older ships actually charge more than the newer ships: the
cabins of older ships are roomier, and other rooms are larger.
• The choice of cabin is also a factor in overall cruise price.
3. Place

• For marketing purposes, place refers to the port of departure.

• The port had a significant bearing on the target market area and the number of potential
customers e.g. ports in Florida such as Miami, Tampa and Fort Lauderdale drew customers
mainly from southeastern part of the United States.
• Today, the port’s target market is restricted only by the availability of fly/cruise or rail/cruise
packages.
• Recently, cruise ships have developed fly, cruise, and land packages that include airfare, cruise
ship, and accommodations and attractions in the port city or nearby city e.g.
• the Bahamas cruise combined with a three-day stay in Orlando to visit Disney World,
Magic Kingdom and EPCOT and the price on such packages is all inclusive.
4. Promotion

• Promotional activities are developed around product, price and place as well as consumer’s
knowledge.
• Promotion involves selling the shorter trips to first time cruisers and selling any trip to repeat
customers: involves advertising the fly/cruise and rail/cruise packages and setting a price the
consumer is willing to pay.
• Success in the cruise industry requires niche marketing, such as business or theme cruises.
• Also requires joint marketing efforts and creative strategies for selling to travel agents or directly
to the consumer.
• Cruise lines depend heavily on travel agency loyalty and spend a great deal of their promotional
efforts on a limited number of agencies that actively sell cruises: other agencies are reached
through direct mail, telemarketing, and travel shows.
• Promotion directly to the consumer is usually through newspaper advertisement.
 Thank You
“Life doesn’t require that we be the best, only that we try our best”