Cruise Industry

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					  The Cruise Industry

An Overview of the Industry and
          the Market
    Short History of Cruising
• 1966: Norwegian Caribbean Line
  marketing cruises from Miami to the
• 1969: Royal Caribbean Cruise Line
• 1970: 500,000 North Americans take
• 1972: Carnival Cruise Lines formed.
    Short History of Cruising
• 1983: Premier Cruise Lines (The Big Red
  Boat) founded.
• 1988-91: Carnival takes control of Holland
  America, Windstar, and Seabourn.
• 1998: 5.4 million North Americans take
• 1999: Royal Caribbean launches the world’s
  largest cruise ship, Voyageur of the Seas.
        The Cruise Market
• The North American cruise passenger
  market has shown continued growth
  from 1970 to 2005; 500,000 to over 5
• North Americans constitute the largest
  share of the world cruise passenger
             The Cruise Market

Source: Berlitz Complete Guide to Cruising
The Cruise Market
Millions of North American Passengers
        Cruise Destinations
• According to CLIA,      Caribbean/Bahamas =
  the proportions of       42%
  cruise ship capacity    Europe = 20%
  sailing various         Alaska = 9%
  regions in 1999 was:    Panama Canal = 6.6%
                          Pacific coast of
                           Mexico = 5.5%
                          Bermuda = 3.2%
                          Other = 13.7%
• The official association of cruise lines
  operating in the North American market,
  located in New York city. Founded
  around 1975.
• Has 25 cruise line members, operating
  127 ships and representing 97% of the
  North American cruise market.
• Operates training programs for travel agents.
• Appoints CLIA-Affiliated Travel Agencies and
  Certified Cruise Counselors.
• Promotes cruising to and provides
  information on cruises to travelers.
• Conducts research on the cruise market and
  keeps cruise demand and cruise line capacity
         The Cruise Lines
• CLIA estimated there are 30 cruise lines
  operating 140 ships serving the North
  American market with a total capacity of
  154,841 berths.
New Cruise Ship Construction
• According to CLIA, 60 new ships will be
  added by 2005.
• Several new cruise ships will
  accommodate 3,000 or more
  passengers (e.g., Carnival, Royal
  Caribbean) and cruise at speeds of 27
  knots per hour (about 31 mph).
        Cruise Ship Organization

Source: A cruise ship is not just a floating hotel, Mitchell R. Less
  Cruise Line Marketing and
    Distribution Strategies
• Cruise lines almost exclusively use
  travel agencies as a source of
  reservations. There is a strong bond of
  mutual dependence between cruise
  lines and travel agents.
• Cruise lines are great at relationship
  and database marketing,
      Cruise Line Marketing and
        Distribution Strategies
• Cruise lines are especially good at
  programming through theme cruises:
Cunard: Murder Mystery, The Monte
  Carlo Murders, Tribute to Gershwins.
Norwegian: Sports Afloat Cruises,
  Sports Illustrated Afloat Cruise.

Crystal: Big Band & Jazz Series, Wine
 & Food Festival.
  Cruise Line Marketing and
    Distribution Strategies
Holland America: 50s Sock Hop,
 $25,000 Bingo, Health and Wellness.
Seabourn: 20th Century Fox Film
Silversea: Le Cordon Bleu Academy.
American Hawaii: Pearl Harbor
 Remembrance, Whales in the Wild.
    Trends in the Cruise Industry
             and Market
•  According to Vicki Freed, Chairman,
1. Cruise lines will continue to add
   unique design features to ships.
2. Cruise lines will continue to find better
   ways to present an itinerary and to
   better serve passengers.
 Trends in the Cruise Industry
          and Market
3. The passenger mix will include more
    first-time cruisers, families, and young
4. The cruise industry will continue to
    grow and evolve.
5. Cruise vacations will increase in
    Trends in the Cruise Industry
             and Market
•    Cruise lines will continue to build new
     ships and add to the mix of onboard
     entertainment and recreation features.
•    Increased regulation of cruise line
     industry by U.S. government agencies.
•    Continuing growth and popularity of
     theme cruises.
   The top five U.S. cruise port
             cities are
• Miami, Fort Lauderdale, Port Canaveral,
  Los Angeles and New York
           Cruise Industry
• Fastest Growing
  Segment of the
  Travel Industry
• Since 1980 had an
  average growth rate
  of 7.6%
• Expanding fleets
           Cruise Industry
• Fastest Growing
  Segment of the
  Travel Industry
• Since 1980 had an
  average growth rate
  of 7.6%
• Expanding fleets
The Love Boat
       • 1977-1986
         Television Series
       • Princess Cruise
  Impact on Traditional, Land-
        Based Resorts
• Cruise lines already offer strong competition
  to traditional resorts, but have not greatly
  penetrated the U.S. vacation market yet. Only
  11% of Americans have ever cruised.
• 75 million say they want to cruise in the next
  five years; 56% of all American adults.
• Major increase in cruise line capacity
  expected, so competition to traditional resorts
  will increase in future.

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