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Carnival’s cruise industry recovery: challenges, progress, and optimistic outlook.

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Embarking on the adventure to delve into the recovery of Carnival’s Cruise Industry, I find myself navigating through a vast ocean of obstacles, advancements, and a hopeful perspective.

Despite the turbulent waves caused by the COVID-19 pandemic, Carnival Corporation has shown signs of progress, with a nearly 50% increase in revenue in the second quarter of 2022. Occupancy rates are improving, ship capacity is back to 91%, and booking volumes are at their highest since the pandemic began.

Join me as we navigate the path to a strong and sustainable recovery in the cruise industry.

Table of Contents

Key Takeaways

  • Adapting to new protocols and navigating through variant waves are major challenges in the cruise industry recovery.
  • Despite significant financial losses, Carnival Corporation has seen progress in occupancy rates and booking volumes, with 91% of ship capacity back sailing with passengers and booking volumes reaching the highest levels since the start of the pandemic.
  • Increasing vaccination rates among travelers have had a positive impact on Carnival’s recovery, restoring confidence to travel and cruise and leading to a surge in booking volumes.
  • Strategic planning, including navigating changing market dynamics and overcoming challenges such as new protocols and high fuel prices, is crucial for a strong and sustainable cruise industry recovery.

Challenges in the Cruise Industry Recovery

I’m facing challenges in the cruise industry recovery, such as new protocols and variant waves, high fuel prices, and difficulty returning to pre-pandemic levels.

These operational challenges have required us to adapt and implement new protocols to ensure the safety of our passengers and crew.

Additionally, the fluctuating fuel prices have put a strain on our financial performance.

Despite these challenges, we remain optimistic and are actively working towards overcoming them.

As part of industry-wide recovery initiatives, we are focusing on increasing our fleet capacity and transferring ships to meet the growing demand.

We have also seen progress in our booking volumes, with the second quarter of 2022 showing nearly double the volumes compared to the first quarter.

While there is still work to be done, we are confident in the recovery of the cruise industry and our ability to navigate these challenges.

Carnival’s Financial Performance During Recovery

Despite the challenges faced, there has been a significant increase in revenue for Carnival Corporation during the recovery period. Carnival’s financial challenges were evident, with a net loss of $1.8 billion for the three months ended May 31 and total losses of over $3.7 billion in the past six months.

However, there is hopeful progress as revenue increased nearly 50% in the second quarter of 2022. To overcome these financial challenges, Carnival has implemented various financial recovery strategies. One strategy is the expansion of their fleet and the transfer of three ships from the Costa Cruises brand to Carnival Cruise Line. Additionally, newbuilds like the Carnival Celebration and Carnival Jubilee will increase capacity to accommodate the growing demand.

These strategies, coupled with the highest booking volumes since the start of the pandemic, show promising signs for Carnival’s financial recovery.

Occupancy Rates and Sailing Capacity Updates

With 91% of ship capacity back sailing with passengers, occupancy rates across all ships and fleets reached 69% in the most recent quarter. This is a significant improvement compared to the earlier stages of the pandemic when many ships were docked and empty.

However, the cruise industry still faces challenges in terms of sailing capacity. The ongoing protocols and variant waves continue to impact the industry’s ability to operate at full capacity.

Despite these challenges, there are optimistic occupancy rate projections for the future. Carnival Cruise Line expects occupancy rates to approach 110% in the third quarter, indicating a strong rebound in demand.

As the industry continues to navigate through these sailing capacity challenges, it is encouraging to see progress and a positive outlook for the occupancy rates in the coming months.

Fleet Expansion and Ship Transfers for Recovery

The fleet expansion and ship transfers aim to accommodate the growing demand in the cruise industry. Carnival Corporation is taking proactive measures to meet the increasing passenger demands by transferring three ships from its Costa Cruises brand to Carnival Cruise Line.

Additionally, the introduction of newbuilds, Carnival Celebration and Carnival Jubilee, will further increase the capacity of the fleet. These strategic moves highlight the company’s commitment to recovery and meeting the surging demand in the market.

As the industry shows signs of progress, with the highest booking volumes since the start of the pandemic and a significant increase in revenue in the second quarter of 2022, the fleet expansion and ship transfers will play a crucial role in Carnival’s optimistic outlook for the future.

With these initiatives in place, the company is well-positioned to cater to the growing number of cruise enthusiasts and regain its pre-pandemic levels of success.

Booking Volumes and Recovery Progress

I’m seeing promising signs of recovery in the cruise industry. The highest booking volumes since the start of the pandemic and a significant increase in revenue in the second quarter of 2022 indicate a positive shift in the industry’s outlook.

Booking trends have shown a remarkable improvement. Booking volumes in the second quarter were nearly double that of the first quarter. This surge in bookings reflects growing consumer confidence and a strong desire to experience the joy of cruising once again. It’s an encouraging sign for the industry’s recovery.

As we continue to navigate through these challenging times, it’s crucial to monitor these booking trends and adapt our strategies accordingly. By staying informed and data-driven, we can ensure a successful rebound for the cruise industry.

Overcoming New Protocols and Variant Waves

Navigating through the challenges of implementing new protocols and mitigating the impact of variant waves requires careful planning and adaptability. As the cruise industry continues to recover, Carnival Corporation is focused on overcoming these obstacles to ensure a safe and enjoyable experience for passengers.

Addressing High Fuel Prices and Inflation

Addressing high fuel prices and inflation requires careful financial planning and proactive measures to mitigate their impact on the cruise industry.

As fuel costs continue to rise, it becomes imperative for cruise lines like Carnival Corporation to develop strategies that can help offset these expenses. One approach that Carnival has taken is to invest in more fuel-efficient technologies and alternative energy sources. By incorporating these innovations into their fleet, they can reduce their reliance on traditional fuels and lower their overall fuel consumption.

Additionally, Carnival has implemented price adjustments and operational efficiencies to help mitigate the effects of inflation. These measures not only protect the company’s bottom line but also ensure that cruise vacations remain affordable for passengers.

The impact of high fuel prices and inflation on the cruise industry is significant, as it affects the overall cost of operations and ultimately the prices that passengers pay for their trips. By actively addressing these challenges, Carnival is setting an example for the industry and demonstrating its commitment to sustainability and customer satisfaction.

Returning to Pre-Pandemic Levels: A Difficult Journey

Returning to pre-pandemic levels has been a challenging journey for the cruise industry. It requires adapting to new protocols and navigating through variant waves. The difficulties faced by the industry are evident in the financial performance of Carnival Corporation. With a net loss of $1.8 billion for the three months ended May 31 and total losses of over $3.7 billion in the past six months, the road ahead is indeed long.

However, there is some progress to be noted. Occupancy rates are slowly increasing, with 91% of Carnival Corporation’s ship capacity back sailing with passengers. Booking volumes are also on the rise, reaching the highest levels since the start of the pandemic.

While there are challenges to overcome, there are signs of progress and an optimistic outlook for the future of the cruise industry.

Optimistic Outlook for Carnival’s Recovery

After facing numerous challenges, Carnival Corporation’s recovery timeline is showing signs of progress and an optimistic outlook. One key factor impacting this recovery is the increasing vaccination rates among travelers. As more individuals get vaccinated, the confidence to travel and cruise is being restored.

This has resulted in a surge in booking volumes, with the second quarter of 2022 seeing nearly double the booking volumes compared to the first quarter. Additionally, Carnival Cruise Line expects occupancy rates to approach 110% in the third quarter, indicating a strong demand for cruising.

The fleet expansion and ship transfers, such as the addition of newbuilds like the Carnival Celebration and Carnival Jubilee, are aimed at accommodating this growing demand.

With vaccination rates playing a crucial role, Carnival’s recovery is on a positive trajectory.

The Path to a Strong and Sustainable Cruise Industry Recovery

Navigating the path to a strong and sustainable cruise industry recovery requires strategic planning and adapting to changing market dynamics. Overcoming challenges such as new protocols, variant waves, high fuel prices, and inflation is crucial.

Carnival Corporation’s financial performance reflects the industry’s struggles, with a net loss of $1.8 billion for the three months ended May 31 and total losses exceeding $3.7 billion in the past six months. However, there are signs of progress.

Occupancy rates are gradually increasing, with 91% of Carnival Corporation’s ship capacity back sailing with passengers and a 50% revenue increase in the second quarter of 2022. Fleet expansion and ship transfers, along with the highest booking volumes since the start of the pandemic, indicate growing demand.

Frequently Asked Questions

What are some of the specific challenges faced by the cruise industry in its recovery.

Some specific challenges faced by the cruise industry in its recovery include implementing new protocols, dealing with variant waves, high fuel prices, inflation, and the difficulty of returning to pre-pandemic levels.

How Has Carnival Corporation’s Financial Performance Been Affected During the Recovery Period?

Carnival Corporation’s financial performance has been challenged during the recovery period, with a net loss of $1.8 billion and total losses of over $3.7 billion. However, there is progress with a 50% revenue increase in the second quarter of 2022.

What Is the Current Occupancy Rate for Carnival Corporation’s Ships and What Are Their Expectations for the Third Quarter?

Currently, Carnival Corporation’s ships have an occupancy rate of 69% across all fleets. However, they expect occupancy to approach 110% in the third quarter, indicating optimistic expectations for increased demand and recovery in the cruise industry.

Can You Provide Some Details on the Fleet Expansion Plans and Ship Transfers That Carnival Corporation Is Undertaking?

Carnival Corporation is undertaking fleet expansion plans and ship transfers to accommodate growing demand. The company is moving three ships from Costa Cruises to Carnival Cruise Line and adding newbuilds like Carnival Celebration and Carnival Jubilee to increase capacity.

How Have Booking Volumes Been Progressing for Carnival Corporation and What Does It Indicate About the Recovery of the Cruise Industry?

Booking volumes for Carnival Corporation have been progressing steadily, indicating positive progress in the recovery of the cruise industry. The company experienced its highest booking volumes since the start of the pandemic, with volumes in Q2 nearly double that of Q1.

cruise industry management

Meet Asra, a talented and adventurous writer who infuses her passion for exploration into every word she writes. Asra’s love for storytelling and her insatiable curiosity about the world make her an invaluable asset to the Voyager Info team.

From a young age, Asra was drawn to the power of words and their ability to transport readers to far-off lands and magical realms. Her fascination with travel and cultures from around the globe fueled her desire to become a travel writer, and she set out on a journey to turn her dreams into reality.

Carnival Cruise Line: Transformative Growth and Enhanced Experiences

Coast Guard’s Recommendations for Cruise Ship Medical Evacuations

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Meet Asra, a talented and adventurous writer who infuses her passion for exploration into every word she writes. Asra’s love for storytelling and her insatiable curiosity about the world make her an invaluable asset to the Voyager Info team. From a young age, Asra was drawn to the power of words and their ability to transport readers to far-off lands and magical realms. Her fascination with travel and cultures from around the globe fueled her desire to become a travel writer, and she set out on a journey to turn her dreams into reality.

cruise industry management

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Gratitude at sea: norwegian cruise line’s gift to educators.

An image showcasing educators on a luxurious Norwegian Cruise Line ship, surrounded by breathtaking ocean views, as they express joy and gratitude through genuine smiles, laughter, and heartfelt gestures of appreciation

Riding the waves of appreciation, Norwegian Cruise Line reveals their sincere present for teachers.

As a teacher, I am thrilled to share the news of their Giving Joy program, a celebration of our dedication and impact.

This extraordinary initiative offers free cruises to deserving teachers, granting them a well-deserved escape and a chance to connect with fellow educators.

With nominations open until June 9, 2023, let’s embark on this journey together, as we honor those who shape minds and hearts.

  • Teacher Appreciation Week is celebrated from today until May 12, 2023.
  • Norwegian Cruise Line launches the Giving Joy program during this week, which offers free cruises to teachers.
  • The program awards the top 20 teachers with the most votes a seven-day cruise for two, and three grand prize winners are invited to attend the exclusive Christening voyage of Norwegian Viva.
  • The Giving Joy program has donated over $350,000 to local schools and teachers with brand partners’ support and has had a positive impact on educators and their teaching.

The Giving Joy Program: A Celebration of Teachers

I’m excited to learn about the Giving Joy Program, which is a celebration of teachers and aims to reinforce the connection between travel and education.

This program is a wonderful way of celebrating educators and showing appreciation for their hard work and dedication. Norwegian Cruise Line has created this program to honor teachers and provide them with an opportunity to experience the joy of travel.

Through the Giving Joy Program, teachers have the chance to win free cruises, allowing them to relax and recharge while exploring new destinations. It’s a fantastic way to recognize the important role teachers play in shaping the minds of future generations.

This program truly highlights the value of teacher appreciation and the positive impact it can have on educators.

Free Cruises and Grand Prize Winners: Honoring Educators

Winners of the Giving Joy program receive a seven-day cruise for two as a reward for their dedication as educators. It is truly an honor to be recognized and celebrated for our hard work and commitment to excellence in teaching.

As a grand prize winner, I had the incredible opportunity to attend the exclusive Christening voyage of Norwegian Viva. This experience was a testament to the value of honoring educators and celebrating their impact.

The Giving Joy program not only rewards us with a well-deserved vacation, but it also acknowledges the important role we play in shaping young minds. Through this program, Norwegian Cruise Line is showing their appreciation for educators and giving us the chance to relax, rejuvenate, and create lasting memories.

I am grateful for this recognition and the opportunity to continue making a difference in the lives of my students.

Inspiring Testimonials: How the Giving Joy Program Impacts Educators

Listening to testimonials from previous recipients of the Giving Joy program, it is evident that the program has a profound impact on educators and their teaching practices. One teacher, Shannon Cooke, shared her experience as a 2022 Giving Joy winner and how it transformed her teaching. She had the opportunity to meet other teachers with similar goals and visions of education. Shannon incorporated her NCL cruise trip to ancient ruins in Mexico into her sixth-grade Civilizations unit. The travel experience enriched her lessons and made history come alive for her students. The Giving Joy program not only recognizes and thanks educators for their dedication but also provides them with opportunities to connect with fellow educators and infuse their teaching with travel experiences. It truly is a gift that keeps on giving.

Incorporating travel experiences into education can have a transformative effect on both educators and students. It allows teachers to bring real-world examples and cultural experiences into the classroom, making learning more engaging and relevant. The Giving Joy program not only provides teachers with free cruises but also offers them the chance to explore different destinations and immerse themselves in diverse cultures. These experiences not only broaden their horizons but also inspire them to create meaningful and memorable lessons for their students. By connecting educators with travel experiences, the Giving Joy program empowers teachers to become lifelong learners and encourages them to instill a sense of wonder and curiosity in their students.

Nomination and Voting Process: Recognizing Outstanding Teachers

As a supporter, I can nominate deserving teachers for the Giving Joy program until June 9, 2023. This program is a wonderful opportunity to show appreciation for educators who go above and beyond in their classrooms.

It not only recognizes their dedication but also promotes the importance of teacher appreciation and the value of travel in education. By nominating teachers, we can help them have a chance to win a free cruise vacation and incorporate their experiences into their teaching.

The Giving Joy program reinforces the connection between travel and education, allowing educators to explore different cultures and bring those experiences back to their students. It’s a fantastic way to thank teachers for their hard work and provide them with an opportunity to grow both personally and professionally.

So let’s take the time to nominate those outstanding teachers who deserve this recognition and support the promotion of travel in education.

Impact and Recognition: Norwegian Cruise Line’s Appreciation for Educators

Supporting the Giving Joy program allows me to acknowledge the impact and recognition it brings to educators worldwide. The program not only provides free cruises to deserving teachers but also fosters a sense of community support.

Just imagine the scene: a teacher, beaming with joy, stepping onto a luxurious cruise ship, surrounded by fellow educators who share the same passion for teaching. As they sail through crystal-clear waters, they engage in meaningful conversations, exchanging ideas and experiences.

One teacher might share how they incorporated their cruise trip to ancient ruins in Mexico into their curriculum, igniting a newfound interest in history among their students. Another might express how the program has not only provided them with a well-deserved vacation but also affirmed their dedication to the teaching profession.

The Giving Joy program truly recognizes and celebrates the incredible work of educators, creating lasting memories and experiences that enrich both their personal and professional lives.

How Can Teachers From Outside the U.S. and Canada Participate in the Giving Joy Program?

International teachers can participate in the Giving Joy program by being nominated by the public. Eligibility criteria for international teachers are the same as for teachers from the U.S. and Canada.

Are There Any Restrictions on the Destinations or Itineraries of the Free Cruises Awarded to Teachers?

Yes, there are restrictions on the destinations and itineraries of the free cruises awarded to teachers. The specific details and limitations can be found in the contest terms and conditions on the website.

How Are the Top 20 Teachers Determined in the Voting Process?

In the voting process, the top 20 teachers are determined based on the number of votes they receive. The criteria for selecting these teachers are the highest number of votes from the public.

Are There Any Limitations on the Number of Times a Teacher Can Be Nominated for the Giving Joy Program?

There are no limitations on the number of times a teacher can be nominated for the Giving Joy program. As long as they meet the eligibility criteria, they can receive multiple nominations.

Does the Giving Joy Program Offer Any Additional Benefits or Resources to Teachers Beyond the Free Cruises?

Yes, the Giving Joy program offers additional benefits and resources to teachers beyond the free cruises. It provides opportunities for teachers to network, explore new destinations, and incorporate their experiences into their teaching.

Exciting Disney Cruise Line Sailings In 2022: Europe, Alaska, And The Caribbean

An image capturing the magic of Disney Cruise Line's 2022 sailings: A sun-kissed Mediterranean port with majestic castles in the backdrop, Mickey and Minnie waving from the ship, and families eagerly exploring the enchanting destinations

By a happy coincidence, right when I was daydreaming about my upcoming holiday, Disney Cruise Line revealed their thrilling cruise itineraries for 2022!

Get ready to set sail on epic adventures in Europe, Alaska, and the Caribbean. From exploring the Greek Isles and Mediterranean on the Disney Magic to immersing yourself in the stunning Alaskan scenery on the Disney Wonder, there’s a cruise for every wanderlust-filled heart.

And let’s not forget the Caribbean, with its crystal-clear waters and white sandy beaches. Get ready for a magical journey with Disney Cruise Line in 2022.

  • Disney Cruise Line will offer sailings to Europe, Alaska, and the Caribbean in 2022.
  • The Caribbean itineraries will include stops in Nassau, Bahamas, and either Grand Cayman or Cozumel.
  • Alaska cruises will depart from Vancouver and allow passengers to experience the stunning scenery and unique culture of the region.
  • Europe sailings will include trips to the Greek Isles, Mediterranean, Baltic, British Isles, Iceland, and Norwegian fjords.

Sailings in 2022

I’m excited to hear that Disney Cruise Line has announced new sailings for 2022. These sailings include destinations in Europe, Alaska, and the Caribbean. Cruising in 2022 offers a multitude of benefits. You have the opportunity to explore stunning scenery and enjoy a wide range of onboard activities and entertainment.

Disney Cruise Line’s sailings in Europe will take you on a grand tour of the continent. You have options to sail through the Greek Isles, Mediterranean, and even northern Europe. This allows you to visit the Baltic, British Isles, Iceland, and Norwegian fjords.

In Alaska, you can immerse yourself in the unique culture and wildlife. You also get to experience the beauty of the Alaskan scenery.

For those looking for a Caribbean getaway, Disney will be sailing from Miami. They offer three- and four-night cruises to Nassau. They also have five-night cruises with stops at Grand Cayman or Cozumel.

These destinations are definitely top choices for 2022 cruises.

Caribbean Itineraries

Starting in summer 2022, I’ll be sailing from Miami on three- and four-night cruises to Nassau, Bahamas, with the option of visiting Grand Cayman or Cozumel on five-night cruises. The Caribbean is a paradise of stunning destinations, and these itineraries allow guests to experience the best of the region.

Picture yourself on a luxurious Disney cruise ship, sailing through crystal-clear turquoise waters, and feeling the warm Caribbean breeze on your face. As you dock in Nassau, you’ll have the opportunity to explore the vibrant culture and beautiful beaches of the Bahamas. And on the five-night cruises, you can choose to visit either Grand Cayman, known for its world-class diving and stunning Seven Mile Beach, or Cozumel, with its ancient Mayan ruins and vibrant marine life.

To give you a taste of what awaits you on these Caribbean itineraries, here’s a sneak peek at some of the highlights:

These are just a few examples of the incredible experiences that await you on a Disney Cruise Line sailing to the Caribbean. From the beautiful beaches of Nassau to the underwater wonders of Grand Cayman and the rich culture of Cozumel, these itineraries offer something for everyone. So pack your bags and get ready for the adventure of a lifetime!

Alaska Cruises

As I set sail on my Alaskan adventure, the breathtaking scenery unfolds like a majestic painting. Towering glaciers, snow-capped mountains, and pristine wilderness stretch as far as the eye can see.

Alaska offers a plethora of top attractions that will leave you in awe:

  • Glacier Bay National Park: Witness the beauty of massive glaciers calving into the ocean, surrounded by stunning fjords and diverse wildlife.
  • Denali National Park: Explore the vast wilderness and catch a glimpse of North America’s highest peak, Mount Denali.
  • Inside Passage: Cruise through this scenic route, dotted with charming coastal towns and picturesque landscapes.
  • Tracy Arm Fjord: Marvel at the dramatic cliffs, cascading waterfalls, and floating icebergs in this narrow fjord.

The best time to visit Alaska is during the summer months, from May to September, when the weather is milder and outdoor activities are abundant. Don’t miss the opportunity to experience the unique culture and wildlife of Alaska during your Disney Cruise Line voyage.

European Adventures

During my European adventure with Disney, I can’t wait to explore the stunning Greek Isles and Mediterranean. The thought of sailing through crystal-clear waters and discovering ancient ruins fills me with excitement.

I envision myself strolling through the historic streets of Athens, marveling at the iconic Parthenon and Acropolis. The Mediterranean cuisine is another highlight that I eagerly anticipate. From the fresh seafood in Barcelona to the delectable pasta dishes in Rome, my taste buds are ready for a culinary journey.

I can already imagine savoring the flavors of olives, feta cheese, and tzatziki sauce. The combination of breathtaking scenery, rich history, and mouthwatering food makes this European adventure with Disney a dream come true.

I can’t wait to embark on this once-in-a-lifetime experience and create memories that will last a lifetime.

Disney and Royal Caribbean Resorts

I can’t help but imagine myself lounging on the sandy shores of the beach resorts offered by Disney and Royal Caribbean. I can escape the worries of everyday life and embrace the serenity of the ocean waves.

These two renowned cruise lines have expanded their offerings to include beach resorts that cater to every vacationer’s needs. When comparing the amenities at Disney and Royal Caribbean resorts, it’s clear that both provide a wide range of activities and luxurious accommodations.

Disney resorts are known for their immersive theming and family-friendly atmosphere, while Royal Caribbean resorts offer a more upscale experience with gourmet dining options and world-class spas.

Additionally, the location and accessibility of these resorts differ. Disney resorts are located in popular vacation destinations such as Florida and the Caribbean, while Royal Caribbean resorts are situated in exotic locations like the Bahamas and Mexico.

Ultimately, the choice between these two resorts will depend on personal preferences and desired vacation experiences.

Disney Cruise Ships

Now that we’ve explored the exciting resorts offered by Disney and Royal Caribbean, let’s dive into the world of Disney Cruise Ships. These magnificent vessels are packed with features and amenities that are sure to make your cruise experience unforgettable.

From world-class dining options to exhilarating onboard activities, there is something for everyone on a Disney cruise ship.

One of the standout features of Disney Cruise Ships is their incredible itineraries. Whether you’re dreaming of exploring the stunning Alaskan scenery or sailing through the Greek Isles and Mediterranean, Disney has a cruise itinerary to suit your desires. You can embark on an eight, nine, or twelve-night cruise from Rome to Greece, or opt for a Mediterranean voyage from Barcelona, Spain, visiting must-see locales.

With so many options, you can choose the Disney cruise ship and itinerary that best fits your preferences and embark on a magical journey at sea.

So, let’s dive into the world of Disney cruise ship features and itineraries. Get ready for an adventure like no other!

Features of Disney Cruise Ships:

World-class dining options

Onboard activities for all ages

Disney Cruise Ship Itineraries:

Explore the stunning Alaskan scenery

Sail through the Greek Isles and Mediterranean

Holland America Line Ships

One of the popular cruise options to consider is Holland America Line Ships. These ships offer a unique blend of age and history, along with a wide range of amenities and activities.

Holland America Line has a fleet of modern and luxurious ships that cater to different preferences and interests. Each ship has its own distinct character and charm, making every voyage a memorable experience.

From the newest additions to their fleet to the well-established vessels, Holland America Line offers a variety of options for travelers. Guests can indulge in world-class dining, relax in luxurious accommodations, and participate in a multitude of onboard activities and entertainment options.

Whether you’re interested in exploring new destinations or simply enjoying the onboard amenities, Holland America Line has something for everyone.

Cruise Week Report

Experience the benefits of sea days during a cruise and discover why they are enjoyable with Norwegian Cruise Line.

Sea days provide a unique opportunity to relax and rejuvenate while enjoying the onboard amenities and activities.

One of the pros of cruising solo is the freedom and independence it offers. You can choose to socialize with other passengers or enjoy some quiet time alone. Additionally, solo cruisers often have the advantage of discounted rates or waived single supplement fees.

Understanding the cost of luxury cruises is essential when planning your vacation. While luxury cruises may come with a higher price tag, they offer unparalleled service, exquisite dining options, and top-notch amenities. Whether you choose to relax by the pool or indulge in a spa treatment, luxury cruises provide a truly pampering experience.

Embark on a Norwegian Cruise Line voyage and embrace the joy of sea days and the luxury of a cruise vacation.

Are there any discounts or promotions available for Disney Cruise Line sailings in 2022?

There are discounts and promotions available for Disney Cruise Line sailings in 2022. Take advantage of the current offers to save on your dream vacation. Check the availability and benefits of these discounts and promotions to make the most of your trip.

Can I bring my own food and drinks on board a Disney Cruise Line ship?

Yes, you can bring outside food on board a Disney Cruise Line ship. However, there are restrictions on bringing alcohol. It is best to check the specific guidelines provided by Disney Cruise Line for more information.

What is the dress code for dining on a Disney Cruise Line ship?

The dress code requirements on a Disney Cruise Line ship vary depending on the dining location. While formal attire is suggested for certain restaurants, most dining areas have a casual dress code.

Are there any age restrictions for certain activities or amenities on Disney Cruise Line ships?

There are age restrictions for certain activities on Disney Cruise Line ships. For example, the AquaDuck water coaster has a minimum height requirement, and the teen and adult-exclusive areas have age restrictions. However, most amenities are available to guests of all ages.

Can I use Disney gift cards to pay for my Disney Cruise Line reservation?

Yes, you can use Disney gift cards to pay for your Disney Cruise Line reservation. It’s a convenient and flexible way to use your gift cards for other Disney experiences. Plus, there are many benefits of using gift cards for vacations.

As I reflect on the exciting sailings that Disney Cruise Line has announced for 2022, I can’t help but marvel at the coincidence of it all. From the stunning Alaskan scenery to the vibrant Caribbean destinations, and the grand tour of Europe, there truly is something for everyone.

It’s as if the universe has aligned to bring us these incredible opportunities to explore new cultures, witness breathtaking landscapes, and create unforgettable memories.

So mark your calendars, because 2022 is shaping up to be a year of incredible adventures with Disney Cruise Line.

Enhancing Denali: Holland America Line Expands Alaska Experience

An image capturing the grandeur of Denali National Park, with Holland America Line's cruise ship sailing through pristine waters, surrounded by towering snow-capped peaks and vibrant wildlife, showcasing an unforgettable Alaska experience

I’ve always held the conviction that the most authentic way to truly absorb the essence of a destination is by diving deep into its natural wonders and vibrant culture.

And when it comes to Alaska, there’s no better way to do that than with Holland America Line’s Land+Sea Journeys. They’ve just announced an exciting expansion of their Denali operation, adding 99 new guest accommodations and creating a vibrant gathering area called Denali Square.

With stunning views, thrilling adventures, and the opportunity to explore both the Inside Passage and the Yukon, this is one Alaska experience you won’t want to miss.

  • Holland America Line is expanding its Alaska Land+Sea Journeys, adding 99 new guest accommodations at Denali operation.
  • The new accommodations include 55 junior suites with balconies and larger living areas, enhancing the overall Denali experience for guests.
  • Denali Square is a gathering area at the McKinley Chalet Resort, offering guests a place to relax, shop, dine, and enjoy music and entertainment.
  • The McKinley Chalet Resort serves as a base camp for adventures at Denali National Park, offering activities such as flightseeing, ATV adventures, hiking trails, and river rafting.

Expansion of Denali Operation

I’m excited to announce that Holland America Line is expanding its Denali operation. We are adding 99 new guest accommodations, including 55 junior suites with balconies and larger living areas. This expansion is aimed at enhancing the Denali wilderness experience for our guests.

The new accommodations will be open for the 2019 summer Alaska cruise season. They will be located at Denali Square, a gathering area at the McKinley Chalet Resort. Here, guests can relax, shop, dine, and enjoy music and entertainment while taking in the breathtaking views of Mt. Healy and Denali National Park.

The three-story building features a rustic-chic décor. Each floor has a central, open-air lobby, and the third floor offers a public deck space with panoramic views. We are thrilled to provide a central hub for our guests to enjoy their stay and immerse themselves in the beauty of the Alaska wilderness.

Denali Square

Located just west of Denali Square, the McKinley Chalet Resort offers guests a central hub to relax, shop, dine, and enjoy music and entertainment. Denali Square is a vibrant gathering area at the resort, where guests can immerse themselves in the Alaskan experience. With stunning views of Mt. Healy and Denali National Park, it provides the perfect backdrop for a memorable vacation. The square features a variety of shops and restaurants, allowing visitors to indulge in some retail therapy and savor delicious meals. Additionally, live music and entertainment performances add to the lively atmosphere. Denali Square truly captures the spirit of Alaska, providing a vibrant and enjoyable space for guests to unwind and create lasting memories.

New Accommodations

The new accommodations at Denali Square offer rustic-chic décor and balconies for private enjoyment of the Alaska wilderness. Nestled in a three-story building, these accommodations feature cozy furniture and open-air lobbies on each floor.

But the real highlight is the private balconies that come with each junior suite. Step outside and soak in the breathtaking views of the surrounding mountains and Denali National Park. The rustic-chic decor adds a touch of elegance to the rooms, creating a cozy and inviting atmosphere.

For even more panoramic views, head up to the third floor’s open public deck space, complete with tables and loungers. It’s the perfect spot to relax and take in the splendor of the Alaskan wilderness.

McKinley Chalet Resort

At the McKinley Chalet Resort, our 68-acre hotel property on the Nenana River, we offer a reception hall, dining facilities, and stylish guest rooms.

The resort serves as the perfect base camp for adventures at Denali National Park. Our guests can enjoy a wide range of activities such as flightseeing, ATV adventures, hiking trails, and river rafting.

The resort boasts stylish décor and premium amenities in all accommodations, providing a comfortable and luxurious stay.

Whether you’re exploring the breathtaking landscapes of Alaska or relaxing at our resort, you’ll find everything you need for an unforgettable experience.

Our goal is to ensure that our guests have access to top-notch amenities and a wide variety of activities, making their stay at the McKinley Chalet Resort truly exceptional.

Land+Sea Journeys

During my Land+Sea Journey, I had the opportunity to explore the stunning landscapes of Alaska and visit must-see sites like Denali National Park and Dawson City. The Land+Sea Journeys offered by Holland America Line are the perfect way to experience the beauty of Alaska.

Here are three reasons why you should consider an Alaska cruise for your next wilderness exploration:

Unforgettable Scenery: From the towering glaciers to the snow-capped mountains, the scenery in Alaska is breathtaking. Cruising through the Inside Passage allows you to witness the beauty of this untouched wilderness firsthand.

Wildlife Encounters: Alaska is home to a diverse range of wildlife, including bears, whales, and eagles. On an Alaska cruise, you have the chance to spot these incredible creatures in their natural habitat.

Cultural Immersion: In addition to the stunning scenery and wildlife, an Alaska cruise also offers the opportunity to learn about the rich culture and history of the region. From visiting native villages to exploring gold rush towns, there is so much to discover.

Embark on an Alaska cruise and let the wilderness of this incredible destination captivate your senses.

Alaska’s Interior Adventure

Exploring Alaska’s interior on a Land+Sea Journey allowed me to discover hidden gems and immerse myself in the rich culture and history of the region.

From the breathtaking wildlife to the scenic hiking trails, every moment was filled with awe and wonder.

As I ventured through the rugged wilderness, I encountered magnificent creatures such as bears, moose, and eagles.

The beauty of the landscape was unparalleled, with snow-capped mountains, crystal-clear lakes, and lush forests stretching as far as the eye could see.

The hiking trails offered a chance to truly connect with nature, as I trekked through untouched wilderness and marveled at the stunning vistas.

Each step brought me closer to the heart of Alaska, where adventure and serenity coexist in perfect harmony.

Klondike Gold Rush Country Exploration

As I continued my journey through Alaska’s interior, I couldn’t help but be drawn to the allure of the Klondike Gold Rush Country. The history of this iconic event fascinated me, and I was eager to explore the remnants of this historic era.

Stepping into the Klondike Gold Rush Country felt like taking a step back in time, as I learned about the hardships and triumphs of the gold seekers.

The region offered incredible wildlife spotting opportunities, with chances to see majestic creatures like bears, moose, and eagles in their natural habitat.

Exploring the Klondike Gold Rush Country allowed me to immerse myself in the stories of the past while embracing the beauty of the present. It was a truly unforgettable experience that highlighted the rich history and natural wonders of Alaska’s interior.

How Many Total Guest Accommodations Are There at the Expanded Denali Operation?

At the expanded Denali operation, there are a total of 99 guest accommodations. During the land+sea journeys, guests have the opportunity to visit must-see sites in the Yukon and Alaska’s interior.

What Types of Amenities Are Available at Denali Square?

At Denali Square, you can indulge in a variety of dining options, from casual to fine dining, while enjoying live music and entertainment. It’s the perfect place to relax, shop, and soak in the stunning views of Denali National Park.

Are There Any Specific Activities or Excursions Offered at the Mckinley Chalet Resort?

At the McKinley Chalet Resort, there are a variety of activities and excursions offered. Guests can choose from flightseeing, ATV adventures, hiking trails, and river rafting, providing a thrilling and adventurous experience.

How Many Days Are the Land+Sea Journeys Typically?

The average duration of Holland America Line’s Land+Sea Journeys varies depending on the itinerary. Popular options include 3-, 4-, or 7-day Inside Passage or Glacier Discovery cruises, combined with overland tours to Denali National Park and the Yukon.

What Are Some of the Must-See Sites in the Yukon and Alaska’s Interior During the Land+Sea Journeys?

During my Land+Sea Journey, I was able to explore the must-see sites in the Yukon and Alaska’s interior. Highlights included Denali National Park, where I saw breathtaking wildlife and scenery, and Dawson City, with its rich history and gold rush heritage.

As I reflect on my time exploring Alaska with Holland America Line’s Land+Sea Journeys, I am truly amazed by the expansion of their Denali operation.

The addition of 99 new guest accommodations, including stunning junior suites with balconies, has enhanced the overall Denali experience.

The newly created Denali Square serves as a vibrant gathering area where guests can indulge in shopping, dining, and entertainment.

Imagine standing in this central hub, surrounded by the breathtaking beauty of Alaska, while enjoying live music and the laughter of fellow travelers.

It’s a scene straight out of a dream.

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As an affiliate, we may earn a commission from qualifying purchases. We get commissions for purchases made through links on this website from Amazon and other third parties.

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Port Economics, Management and Policy

A comprehensive analysis of the port industry

Chapter 8.1 – Cruise Ports

Authors: dr. athanasios pallis, dr. jean-paul rodrigue, and dr. theo notteboom.

Ports and destinations have developed an interest in hosting cruise activities. Cruise ports and terminals are undergoing transformation, aiming to achieve growth.

1. An Expanding Cruise Port System

With the growth in cruise shipping and businesses, cruise ports are gaining importance. The port is vital for assuring schedule reliability and allowing a continuous passenger (dis)embarkation and transfer to onward journeys and day excursions. This highlights the considerable financial contribution of cruising to port cities or nearby touristic destinations. Once cruise lines express an interest in a destination, allowing for economic and geopolitical conditions, its viability relies on port and shore characteristics. The presence of sufficient port-specific and port-related infrastructures, the absence of intense use that might lead to congestion and disruption, and the modernization of infrastructures to provide efficient and effective port services are crucial parameters allowing the usage of a port as part of an itinerary.

Ports also realize the opportunity to provide services to an industry that offers to local economies more than returns to the port itself. With the direct and indirect impacts of many cruise-related activities, including passengers and crew spending, on port cities or nearby touristic destinations, interest in increasing the number of cruise passengers has been supported by broader communities and decision-makers. Admittedly, passenger and crew spending contributes significantly to the cruise hosting economies. Cruise line expenditures for goods and services in support of their operations and the many other indirect and induced effects provide additional motivation for hosting cruise activities. The rising importance of port-city integration coincides with the growth of the industry. Cruise activities are part of the agendas promoted by port authorities and other port-managing organizations to link their port with visible benefits for the local economy. All these contribute to the use of different cruise itineraries and reduction in the high level of concentration of the  global cruise port system which has been observed in the past.

In the 20 th  century, the global cruise port system has been characterized by a high level of regional concentration as well as a clustering of port visits. However, in the 21 st  century, this concentration has diminished rapidly, as expansive global itinerary building in cruise lines and a growing interest in advancing cruise activities by many cruise ports has increased the number of ports hosting notable levels of cruise activities.

cruise industry management

2. Typologies of Cruise Ports

Ports offering services to cruise lines vary in many respects as the aim of cruise shipping is different from that of cargo shipping. Cruise lines focus on the provision of amenities to cruise passengers , rather than just transportation services. The presence of these two elements, transport, and tourism, results in multiple criteria for a typology of cruise ports . The first group of criteria is similar to those observed in cargo port markets. Τhe second group reflects the peculiarities of the cruise market, including the catalytic influence of the tourism element.

cruise industry management

A. The port element

Depending on their  role in cruise itineraries , cruise ports fall into the following categories:

  • Home ports (turnaround ports or hub ports) are the ports where passengers begin or end their cruises. Most commonly, they are both the commencing and the ending point of a designed itinerary. About 80% of all cruises end up in their port of origin, meaning that cruises are usually set up as loops. There are a growing number of homeports where passengers ican begin or end their journey.
  • Ports of call (transit ports) are an intermediate stop en route to another destination. Cruise vessels call for a few hours before continuing their itinerary, offering their guests the opportunity to visit the port-city and nearby touristic attractions.
  • Hybrid ports blend the two categories as they are the starting and ending point for some cruise itineraries but also act as an intermediate point for other cruise itineraries.

Within the Spanish market, which is the biggest in Europe, Barcelona fulfills the function of a homeport. Seville, Valencia, Palma, and Gran Canarias play dual roles. There are even some ports, like Malaga, which can primarily play the role of port-of-call, but have also been used as a homeport.

The state of cruise port development provides a second typology criterion. The siting and setting up of cruise port facilities are subject to constraints usually not found for cargo port activities. Cruise lines expect specific levels of services and space as more than ten square feet are needed to serve each passenger check-in in less than 15 minutes and disembarkation in less than 20 minutes. Architects and builders are developing specialized terminals with many aesthetic characteristics. This is a major transformation, as most cruise terminals were reconversions of port facilities used for cargo operations, particularly if those sites were adjacent to downtown. However, the move from multi-purpose terminals or temporary docking facilities towards specialized cruise terminals is not universal. Sometimes, scarce port-land only allows for one pier to be dedicated to cruise. Alternatively, cruise lines can develop their own ports of call, such as private islands in the Caribbean .

The terminalization of cruise ports implies advanced, autonomously operating cruise terminals of considerable size (e.g., Port of Barcelona ), accompanied by the presence of cruise terminal operators that assume responsibility for operating, and in some cases constructing and developing these terminals.

The uninterrupted growth of cruising has resulted in the opening of a window of opportunity to several firms, including cruise lines and, specialized cruise terminal operators such as Global Ports Holding , wishing to undertake new or additional investments in the cruise business, and sometimes to follow a path of internationalization. The leasing of cruise terminals to third parties and the development of new terminals have become common. In some ports, cruise lines are directly involved in the financing, building, and operations of terminals). In other ports, local cruise terminal operators (frequently being port agents) are joined by other companies that have developed interests in taking control over cruise ports and specialized purpose vehicles (SPVs) built by terminal operating companies. This led to the emergence of international operators.

As cruise activities in ports gain operational autonomy, public authorities are pursuing various partnerships with third parties, aiming to finance and develop growth strategies. Cruise port governance  has in many cases been revisited, with more actors involved than just the managing entity of the port.

cruise industry management

Two additional classifications of cruise ports are based on the transportation element of cruising and facilitate a better understanding of the heterogeneity of the cruise port industry. The first is the size of the cruise ports. With many ports becoming very large entities handling more than one million passenger movements per year, cruise ports might be classified as being of significant size, or very large, large, or medium, or even a small cruise port – one that hosts very few calls and passenger movements per annum.

The other criterion is the seasonality of cruise activities (i.e., Low, average, high, very high), which refers to the extent that cruise activities in a region and cruise vessels call at a particular port during just a few months of the year.

B. The tourism element

Cruise ports also fall into three main categories depending on their role in tourism within their regions. They can be a destination port where few, if any, excursions occur outside the port area and the touristic attractions of the linked port-city. They can also be a gateway port that mostly serves as a point of embarkation or a balanced port offering a combination of port area amenities and inland excursions. Each of these categories implies different development strategies to service the market.

A different classification results from the level of tourist attractiveness of each cruise port and its linked port-city and destination. Some of the ports are marquee ports that, due to exceptional touristic attractions close by, are essential destinations for cruises in the region. Others are discovery ports , commonly seen as having the potential to attract the interest of prospective cruisers.

Accessibility stands as another relevant classification of cruise ports. The dominant means of reaching the port, such as flight and cruise, drive and cruise, or train and cruise, influences the type of operations and infrastructure the port needs to provide.

C. Cruise port services

The services offered to cruise lines at a cruise port differ depending on the function of the port along an itinerary. The services expected to be on offer at a transit port are a subset of those available at home ports. Generic facilities expected by all cruise ports include entrance and berthing facilities. The second group of services is offered to the cruise vessels and cruise lines, and the third group of services is provided to cruise passengers. A home port is expected to provide additional services that assist cruise passengers and their activities.

cruise industry management

3. The Competitiveness of Cruise Ports

Cruise ports serve a derived demand , such as the wish of cruisers to visit a specific destination. Nonetheless, the competitiveness of the infrastructure and services offered at a cruise port can also affect the decisions of cruise lines to include in their cruises itineraries more calls at this port. Seeking to develop a new product, cruise lines have added new cruise ports to itineraries and seek to attract land-based holidaymakers or returning customers. This search continues and is associated with destination features, such as tourist attractions, shore excursion potential, and security. However, ports and their facilities, such as berth access, land infrastructure, and logistics, maritime services such as pilot and tugs, and landside operations such as security, procedures, and luggage handling, affect the growth of cruising in a given port. Besides, cruise ports do not necessarily have a monopoly in the offered amenities and access to inland touristic attractions. Substitution remains a possibility.

It is less costly for ports to develop a cruise terminal than it is to develop other port facilities, such as container terminals. Superstructures and processes are less demanding in terms of sophistication. However, the quality of port facilities (infrastructure), the efficiency of services and operations, and the levels of port fees (costs) can explain only part of the attractiveness of a cruise port. With cruise passenger satisfaction being the foundation of cruise shipping, a cruise port relies on additional factors if it is to become a port of call and host cruise passenger movements.

First, the extent to which the port is geographically well-positioned for integration into cruise itineraries, which involves the distance between cruise ports. The location of the destination remains fundamental. Ports located in must-see destinations still need to be part of an appealing itinerary to be a popular cruise destination. A second factor is the tourist attractiveness of the destination . This is primarily determined by characteristics of the area (climate, socio-cultural and natural factors, or proximity to touristic attractions), with the port industry and stakeholders having only a secondary influence. The third factor is the accessibility of the destination . Port proximity to an airport with airlifts to source markets, a train station with good connections, and highways supporting the increasingly popular drive and cruise concept might determine the potential to host home port traffic.

Taking it for granted that a port has applied all the steps to enhance security levels, the next factor is the quality of port services and services offered. Port fees stand as a success factor as well. The last two factors are generally the most easily adaptable compared to other success factors. Nevertheless, a cruise port that performs more weakly on location, tourist attractiveness, and accessibility than another port is not likely to match performance by making changes in facilities, services, or fees.

A. Port choice and itineraries

Cruise ports aim to be part of different cruise itineraries since cruise lines sell itineraries, not destinations, implying greater flexibility in selecting ports of call. The selection of an itinerary by cruise lines is the outcome of several commercial considerations:

  • Potential revenue generation and costs , such as shore excursion revenues plus shipboard revenue, port costs, and fuel costs (including the impact of fuel-related regulations).
  • Operational considerations , such as geographic location (competing and complementary ports on the itinerary), the distance between ports of call (cruise ships can cover up to 280 nautical miles per night), infrastructure, days of the week that a cruise might call, evening and overnight calls.
  • Brand positioning (exotic ports of call for premium services).
  • Guest interest and satisfaction (customer-oriented industry).
  • Marketability (with itineraries being as strong as the weakest port).
  • Economic trends and market research include evaluating changes in disposable incomes and the demographics of the customer base.

Once the above criteria have generated a shortlist of alternative options, attention turns to the cruise ports to be included. Cruise lines are interested in selecting ports that:

  • Are not congested.
  • Provide quality port facilities.
  • Apply transparent berthing policies and other facilities.
  • Have the potential to attract cruisers from diversified passenger source markets.

Geographical proximity and connectivity to other cruise ports are vital. Synchronizing a cruise port location with the time and speed preferences of cruise lines, particularly the possibility of being included in itineraries involving several ports, is vital. This formula is the outcome of the fact that ships ideally travel at 18 knots for 14 hours. This means that the maximum overnight travel distance is 250 nautical miles, whereas, with a speed of 20 knots, the maximum overnight travel distance increases to 280 nautical miles.

Ports are carefully considered with a view to maximizing the commercial potential and utilization of onboard assets. Ships are constantly moving between ports of call, and shore leaves are of low duration, such as 4.3 hours on average in the Caribbean, even if a cruise ship stays at a port 10 to 12 hours. A standard cruise itinerary is a loop beginning and ending at a hub port (also called a turn port or port of embarkation) and typically lasting seven days  with 3 to 5 ports of call depending on their respective proximity. Cruises of 10 to 21 days are also offered, but they tend to have lower profit margins as customers tend to spend less as the cruise progresses.

The distribution of cruises by the number of days duration reveals the characteristics of cruise itineraries. The share of cruise lasting seven days is dominant (47%), with other prevalent duration in the range of 3 to 5 days. This illustrates a scheduling issue for cruise shipping lines as they maximize their asset utilization through a continuous turn of cruise ships. For instance, a ship usually finishes a weekly cruise early in the morning and begins a new one on the evening of the same day. In the 8 to 12 hours window between the end of the inbound cruise and the beginning of the outbound cruise, passengers must check out and disembark, facilities are cleaned, waste discarded, stores replenished, the ship refueled, basic maintenance performed, and outbound cruise passengers must check-in and embark. The design variables of itineraries within this time frame mainly concern the number and order of port calls, the synchronization with the (international) air transfers at the turn ports, vessel speed, and vessel size.

cruise industry management

Since the cruise industry appears fundamentally to be driven by supply, supply saturation , as opposed to demand saturation, often constrains future developments and imposes limitations on an industry that continued to grow rapidly until the COVID-19 pandemic. While large hub ports can accommodate additional port calls, it is the smaller “exotic” or “must-see” (marquee) ports that cruisers are seeking to visit that present challenges for additional capacity. Berth availability and the  ability of small communities to accommodate large tourist influxes of short duration has become a salient issue. However, the massification of cruise ships is creating a scale and scope challenge for several cruise ports facing the dilemma of the generation of tourism income and the environmental and social disruptions associated with large cruise ships. This leads to further market segmentation between large ports visited by mega-ships and smaller ports by smaller ships offering a specialized cruise experience.

This is likely to incite further involvement of the cruise industry in terminal operations , a trend that has already started taking place. The next step involves developing new cruise terminals co-located with service amenities such as hotels, attractions, condominiums, and shopping malls. Paradoxically, a similar trend was observed in container shipping in recent decades as several shipping lines became, through parent companies, terminal operators. Irrespective of ownership structure, the emergence of transnational cruise terminal operators (currently observed at a limited scale) might further transform the industry in the coming years. While a further fragmentation of itineraries is likely to occur, closer integration between the cruise port and the cruise shipping industry is expected.

B. Infrastructure upgrade

The availability of adequate port infrastructure and the organization of cruise hosting operations efficiently and securely remain among the conditions for generating the interest of cruise lines including a port in a cruise itinerary. Cruise ports need docks able to accommodate the new generation of cruise ships efficiently. Requiring new infrastructures poses significant challenges, especially to those ports that face land scarcity or the need for regular dredging of their basin. In the latter case, there is a need to minimize the potential impact on the sea flora and fauna (through land reclamation) and process and use the dredging operation products.

The optimal design and planning of cruise ports and their terminals underline long-term arrangements between ports and cruise lines. When securing the long-term commitment of one or more cruise lines, the cruise port is incited to provide adjustments to its operations. Such long-term commitments are defined through negotiations between ports and cruise lines.

Once the port infrastructure is in place, and the port is operational, the managing entity of the cruise port needs to develop a strategy for growing homeporting activities and the desired cruise market segments. Competition for both transit and home port cruise businesses is growing, with ports and destinations working to evaluate the benefits of each option in order to direct their efforts to the most convenient business opportunity. The most significant challenges in the search for competitiveness are:

  • Developing relationships with cruise lines , with the aim of securing a long-term engagement.
  • The accommodation of calls by larger in size cruise ships .
  • The evolution of relationships with people and businesses around the ports offering improved services to the passengers and cruise ships calling at the port.
  • Exploitation of the potential to overcome the seasonality of hosting cruise activities via year-round cruising.

A common denominator in these efforts is the need to enhance the economic, social, and environmental sustainability of the cruise activities attracted.

C. Relationships with cruise lines

Improving relationships with cruise lines is the major challenge for cruise ports. The most important issue to be addressed is the offering of attractive shore excursions . Ports and cruise lines need to align their priorities. Subsequently, they coordinate their efforts and engage service providers, authorities, and stakeholders, in organizing transportation infrastructures and tourist services ashore to increase options available to cruise passengers. The potential for multiple shore excursions incites itinerary planners to include the port in the offered cruise programs.

The long-term engagement of cruise lines to the use of a cruise port is a strong indication of its prospects as a destination. To expand its presence in the cruise market, a port may need to adapt to organizational structures, operational procedures, and governance regimes, or strategies. The presence of cruise lines for more than a few calls, and the commitment for a multi-year presence, appear crucial. The availability of landside transportation is another issue creating controversy between ports and cruise lines, with ports and destinations having to collaborate to resolve any bottlenecks.

The demand for port services does not depend on port operations. Cruisers are primarily interested in agile transportation to the port-city or the tourist destination. Less discussed are unexpected call cancelations by cruise lines, which are high on the agenda for cruise ports. Perhaps contrary to what may be expected, other arrangements appear to be more challenging than tariffs. Two significant challenges to be jointly addressed by ports and cruise lines include the cooperation between ports and cruise lines when scheduling itineraries and berth allocation.

Berth allocation  is a long-term planning issue for ports, with vital social implications. The practice refers to the planning of which cruise vessels will visit the given port on a specific day for a particular time span. Ports need to arrange the slot to be reserved for a particular vessel call two years in advance . The reason is that the cruise line needs to define its cruise itineraries and then inform travel agents who will need to sell the cruise to potential customers. For several reasons, such planning does not always happen. Given the limitations imposed by the geographical distances between ports included in an itinerary and the lengths of cruises, having several operators berthing for the same hours is not rare. The problem of berth allocation is even more critical in smaller, secondary cruise ports. In small, picturesque destinations, cruise calls might mean relatively unpleasant situations of a crowded location for certain days or hours, or even distortion of other tourist activities. In bigger ports, this might take the form of congestion at the arrival of bigger ships on which thousands of people are cruising.

The arrival of two average-size cruise vessels at a given port means more than 6,000 passengers disembarking at the same time. Yet, in some cases, congestion in small and medium destinations is produced simply because of a small additional number of calls. Without effective planning, these destinations may be subject to the pressure and the negative effect of too many passengers who can barely be accommodated which does not allow for a positive experience. In several cases, the presence of cruises is marked by seasonality, reducing the problem that smaller tourist destinations face.

However, while the debate on how best to apply berth allocation is at the top of the agenda between key stakeholders, this debate remains in many respects inconclusive. Technical issues related to its application (time scale, details of the berthing allocation) and also the need of all ports included in an itinerary to synchronize with the system, the diverging needs of each cruise line, the treatment of double bookings and cancellations of booked cruise berths, are all vital. With the number of players involved, this discussion is complex to resolve.

D. Scale of cruise port calls

The early goal of the cruise industry was to develop a mass market since cruising was, until then, an activity for the elite. A way to achieve this was through economies of scale as larger ships could accommodate more customers and create additional opportunities for onboard revenue sources. The first dedicated cruise ships began to appear in the 1970s and could carry about 1,000 passengers. By the 1980s, economies of scale were further expanded with cruise ships that could carry more than 2,000 passengers. Today, the biggest cruise ships have a capacity of over 6,600 passengers, with the capacity of each of the 50 biggest cruise vessels in operation having exceeding 3,000 passengers. For instance, the Oasis-class ships, which as of 2018 accounted for the largest cruise ship class, have a draft of 31 feet and a capacity of about 6,600 passengers, and a crew of 2,200. Comparatively, a containership of 2,500 TEU requires a draft of 33 feet, while a containership of 8,400 TEU requires a draft of 46 feet. Draft issues that have plagued container ports are a much more marginal constraint for cruise shipping. Additionally, cruise ships can anchor and use tendering services, which opens a wide array of ports of call. However, the standard deviation is significant, and such numbers need to be treated with caution. The current order book suggests a clear stabilization trend regarding maximum vessel size and underlines that  there are limits to economies of scale in cruise shipping.

Cruise ships tend to have a low draft since they do not carry cargo; they have more volume than weight . This confers the advantage of accessing a large number of ports and therefore multiple itinerary options since the setting up of a pure cruise port rests on criteria that are different from commercial ports. Cruise ports tend to be located close to either city centers (cultural and commercial amenities) or natural amenities (e.g., a protected beach). On average, these sites do not have very deep drafts, and dredging would be socially or environmentally unacceptable. For instance, the Oasis-class ships, which as of 2018 accounted for the largest cruise ship class, have a draft of 9.3 meters (31 feet) and a capacity of about 6,600 passengers, and a crew of 2,200. Comparatively, a containership of 2,500 TEUs requires a draft of 10.6 meters (33 feet), while a sovereign class containership of 8,400 TEUs requires a draft of 14 meters (46 feet). Draft issues that have plagued container ports are a much more marginal constraint for cruise shipping. Additionally, cruise ships can anchor and use tendering services, which opens a wide array of ports of call.

cruise industry management

The growth in cruise ship size imposes physical restrictions on destination ports. Ports must guarantee sufficient draft and berthing lengths, and cruise terminals capable of handling efficiently large volumes of passengers. To receive a mega cruise ship, a cruise terminal must guarantee at least 10 meters of draft, 425 meters of berth length, and a navigation channel 132 meters wide, assuming good weather and other navigational conditions. Limits might also relate to landside operations, such as space for the apron area, the ground transportation area, road communications, the capacity of destinations to serve more cruisers, and the social acceptance of the further growth of cruising. Physical limitations of piers’ berth lengths and drafts have historically limited cruise development. Many ports do not meet these requirements and would require major upgrades to host mega cruises.

E. Seasonality of cruise activities

Despite the remarkable growth of cruise activities, the seasonality of many cruise itineraries implies that an array of cruise ports are used during a peak season but may receive limited, if any, cruise ship calls outside the main season. A 40 weeks cruise season is considered by many as the maximum duration per year, but is uncommon. One of the implications is that cruise terminals remain unused for a lengthy period. Those responsible for developing cruise ports might also be more skeptical about allocating more port areas to cruising. The reason is that this is an activity marked by seasonality when other factors, such as the port land scarcity, and the request for more space by cargo port activities, add pressures to devote available port land to cargo. Societal pressures for year-round utilization, so that the port-city and related destinations that enjoy cruise tourism benefits, put pressure on ports to develop conditions for expanding the cruise season.

Cruise lines set itineraries to maximize customer satisfaction (and revenues) but must consider the seasonality of the demand. The planning of vessel deployment targets maximum capacity utilization in combination with the maximization of earnings per passengers and minimizing expenses (mostly via lower fuel consumption). Seasonality is a fundamental market characteristic, and implies imply that ports host cruise vessel calls deployed as part of three different types of itineraries :

  • Perennial , responding to a region that is served throughout the year due to the resilient demand (with high/low periods) and stable weather conditions; the Caribbean and, to a lesser extent, the Mediterranean and its adjoining seas, are such markets. Perennial markets can have a seasonality implying that although they are serviced throughout the year, there are periods of lower demand.
  • Seasonal , to serve periodical market potential in periods with good weather conditions; with the Baltic, Norway, Alaska, and New England standing as typical examples. Ideally, cruise lines would prefer to service only perennial markets since this would represent a close to optimal use of ship assets. However, like the tourism industry in general, seasonality is an important component of the demand for cruises meaning that some markets are serviced for a few months, mainly during the summer.
  • Repositioning, between perennial or seasonal markets , a practice evident between the Caribbean and Mediterranean, and Alaska and Hawaii, though following the globalization of the market in recent times this has expanded to additional markets (i.e., the Mediterranean and the Indian Ocean).

The repositioning strategies of cruise lines involve cruise itinerary scheduling based on the coupling of cruise markets and deploying a cruise vessel in both markets for specific periods. This coupling is based on the proximity of markets, cost issues, and the sourcing of passenger patterns. For instance, North Asia and South East Asia are two such markets, with their coupling based on the same sourcing of passengers, the demand for the same product, warm alternative weather, and low-cost repositioning. The coupling of North Asia and Australia provides a warm alternative, robust yields, and low-cost repositioning. An Australia/Pacific-Alaska coupling is justified on grounds of the same sourcing of passengers, the same product offered in both markets, and warm alternative weather for cruise passengers at different times of the year. Finally, the coupling of the Mediterranean market and the North America/Caribbean markets is based on the same sourcing of passengers, the offering of the same product, the warm alternative, and the low-cost repositioning of the vessels. For cruise ports, this coupling of markets implies cruise calls by deployed ships and cruise passenger hosting in parts of the year only.

Some cruise regions are less affected by seasonality, with the Caribbean one of the few perennial markets. The number of monthly passengers is relatively stable throughout the year in markets serviced by North American ports with passengers totaling between 800,000 and one million per month, with a December/January peak season. However, a closer look reveals specific seasonality patterns. The Caribbean market and its sub-regions dominate to account for more than 90% of the passengers during the high winter season and around 55% of the passengers during the low summer season. The seasonality of Alaska, Bermuda, and Canada/New England is also evident, with cruise lines attempting to optimize the utilization of their assets year-round by repositioning to take advantage of seasonality. An unexpected pattern is a lack of seasonality for the Bahamas, mainly the outcome of the leading cruise lines building private ports reserved for their exclusive use.

Seasonality does not restrict the development of a cruise region, such as for the Mediterranean and its adjoining seas , a most dynamic cruise region. Between May and October, each month accounted for 10%-12% of the traffic. In total, 75% of the cruise passenger movements that occur annually in this cruise region happen during these six months. The total passenger movements registered during the three winter months (December, January, February) stand at only 7% of the total annual movements. This has incited discussions on achieving year-round but with limited outcomes. Winter activities are linked with single-call operations of a different size than in the rest of the year. In the Mediterranean, fewer than 850 calls out of an annual total exceeding 12,500 happen from December to February. However, for these months, each call is associated, on average, with more passengers. January is the month with the highest rate of passengers per call (2,314 passengers), followed by February (2,153 passengers) and December (2,095 passengers). Cruise lines develop fewer itineraries, as repositioning vessels take place, with cruises marked by a substantially higher level of utilization. From a port and destination perspective, respective adjustments of operations are essential.

cruise industry management

Due to seasonality, cruise terminals can represent an underutilized asset prone to risks. For many ports, the cruise terminal remains a temporary facility with berth(s) supporting other uses when cruise ships are not calling. An approach is to use a cruise terminal as a multi-purpose facility, often built for another rationale that can include an adjacent hotel, convention center, events hall, or any other revenue-generating infrastructure that would gain by being on the waterfront.

F. Cruise ports: competition and co-opetition

The growth of the cruise industry results in the evolution of complex relationships between cruise ports . The central element is the fact that cruising develops based on itineraries rather than destinations. There is an interdependent relationship between competition and cooperation between two or more rival ports competing in a given market.

Ports located in the same region compete to be included in the itineraries scheduled by cruise lines. Yet not all compete for the same market. The reason is the development of distinctive cruise market segments, such as contemporary, premium, and luxury cruises. Either by choice or due to capacity and destination restrictions, several ports target a specific market segment. Contemporary and luxury cruises stand as the most popular market segments. The competition is more intense between ports of the same category. Cruise lines are interested in creating itineraries that include ports of different sizes. Each port provides various experiences, permitting passengers to select from options for accessing their departing port. For example, competition develops between marquee ports to be part of as many itineraries as possible or between different destination ports. There is also competition between small ports or between ports enabling drive-to-cruise. With the number of ports entering the market increasing, this competition is intensifying. Thus the increase in market size allows for sustaining a wide range of activities.

In the case of home ports, competition is even more intense than in ports of call. In this case, the geographical location of the competing ports turns out to be of limited importance. Especially when the ports are marquee ports, the geographical concern is limited to the location of other ports able to confirm attractive itineraries. In the case of home ports, features and facilities of the cruise port and the destination are most significant, as are the quality and the variance offered by the existing chain of suppliers (i.e., bunkering, provisioning) having the capacity to serve homeporting calls.

While competing, cruise ports also develop cooperation practices as a critical strategy to establish their market position. This also takes place among cargo ports, but in the case of cruising, ports do so to the extent that their relationship can be described as the perfect case of  co-opetition . This refers to competing entities generating a number of advantages and opportunities produced through active inter-organizational relationships. The key concept is to collectively benefit from the growth of the cruise industry via networking and promotion of regions as cruise destinations, next to individual ports. Recalling that the size of the market has rapidly expanded and changed in the last decade alone, sharing knowledge on best practices about cruise port development and management is also part of the observable cooperation of cruise ports. Among the drivers behind co-opetition is the knowledge that cruise lines select itineraries, not individual destinations or ports. Co-opetition can lead to some forms of commercial partnerships between ports with a view to improving itinerary attractiveness and promoting certain ports of call combinations. In this vein, co-opetition develops between marque ports and nearby ports-of-call, between boutique destinations, intending to attract the deployment of vessels in the region and the offering of more itinerary building alternatives.

4. Home Ports

A cruise port is, in principle, interested in being a homeport for one or more cruise lines, as the total impacts on the port city are generally regarded as more significant. This is due to three reasons:

  • The tendency of cruise lines to purchase goods and services from port suppliers.
  • Passengers are likely to stay longer in the city and overnight at local hotels.
  • The spending of crew members .

A cruise passenger spends six to seven times more at a home port than at a port-of-call. Further, the modernization and upgrade of cruise vessels have resulted in a significant downturn in the average expenditures per cruise passenger ashore and an increase in the share of onboard expenditures. Still, homeporting continues to have a major impact on the selected port and the associated city and touristic destination. In the late 2020s, research at the major cruise port of Europe revealed that the benefits of homeporting in Barcelona , Spain, were on average €202 spending per cruise passenger hosted, with an overnight stay in a hotel, compared to a respective €57 average expenditure of cruise passengers without an overnight stay. Comparatively, a holiday tourist would spend an average of €156 in the city with an overnight stay in a hotel. Cruise Lines International Association (CLIA) estimates passenger spending before boarding a cruise at $376 and $101 for a port of call.

A. Criteria for selecting a home port

The criteria for selecting a home port relate to the characteristics of each port and the criteria that a cruise company uses to identify and assess a potential home port. Despite the case-by-case approach in determining a home port, there are some major conditions that a cruise port must fulfill.

Cruise lines use sophisticated selection criteria to select a homeport. At the same time, cruise ports and related decision-makers assess their potential and develop their governance, management, and operational strategies, in a way that will fit the expectations of cruise lines. For most users, a cruise involves two travel segments, the first being air travel to the home port airport (with a return trip), and the second is the cruise itself. Therefore, it is essential that a well-connected airport with significant airlift capacity services the home port, representing a touristic destination. This is the case for Miami, Fort Lauderdale, and San Juan, which have well-connected airports and acts as home ports for Caribbean itineraries. Barcelona and Civitavecchia (near Rome) are major home ports for the Mediterranean that are also well serviced by air transportation. Poorly connected airports are commonly associated with higher airfares, which impair the competitiveness of the city for mass tourism. There are several customer benefits linked to having more cruise embarkation points available such as drive-to convenience (particularly in North America) and fewer airport hassles. Availability of more drive to ports also increases the likelihood of cruising, which is why cruise lines will call ports along the American Gulf Coast and Eastern Seaboard such as New York, Tampa, Galveston, Baltimore, and New Orleans.

Changes in existing homeporting choices are becoming more common, even in established, comparatively stable cruise markets. The increasing scale of cruise vessels, the larger scale of port operations to serve more visitors per call, and the provision of a new cruise product underscored by market segmentation , are all conditions resulting in re-planning existing itineraries or scheduling new ones. Local socioeconomic characteristics might also work towards reforming itineraries. A notable example are the changes in the Adriatic Sea due to new regulations applying to the major homeport of Venice. In emerging cruise regions, such as Australia, South America, and the Far East, the planning of new itineraries is even more frequent. The setting and the size of the cruise market might change further following the standstill produced by the  COVID-19 pandemic  in 2020 and the first half of 2021. The new conditions and protocols for serving cruise vessels will probably add to the evolution of new itineraries. They might further alter the criteria taken into consideration when a cruise line decides which port to use as home port.

None of the ports with minimum infrastructure and enhanced in-port and destination experiences for deployed vessels in a specific geographic cruise region have renounced being a home port in this context. Knowing the criteria for being selected by cruise lines is essential for both existing and aspiring home ports. In particular, as few parameters might be taken for granted, the geographical location seems to be of limited importance as vessels deployed in a region have the option to select one of many departing options. Cruise ships might prioritize the attractiveness of destinations or the need to access appropriate port infrastructures, superstructures, supplies, and services to facilitate the ship and the passengers. The deployment of ever-larger cruise ships generates further incentives for homeporting, at least in destinations that have yet to reach their carrying capacity.

A potential home port might decide to invest in increasing cruise traffic and the related added-value supply chains. Favoring cruising and fulfilling a social function may harm cargo activities as homeporting demands space within the port zone. The docking or anchorage facilities are usually limited, and the coexistence of the two industries becomes complicated by individual requirements. A cruise development strategy also demands substantial capital for financing infrastructure improvements , as cruise operators demand better facilities to cope with increasing size and passengers volumes. These also put pressure on adjusting operations and strategies. However, although generally described as a placeless business, the offering of cruises relies heavily on local attractions. Cruise lines, ports, and cities are highly interrelated and need to establish collaborations such as joint ventures where cruise lines invest in ships, while destinations invest in port facilities and tourism attractions. Further strategies that eliminate any challenges associated with the use of public space in port cities hosting substantial numbers of homeporting cruise activities need to be elaborated.

The development of transport and tourism capacities is also critical. These concerns need to be addressed when there is a better understanding of the exact implications of the ever-increasing size and capacity of cruise vessels and its impact on the resulting scale of operations.

cruise industry management

Variation exists between regions as regards the embarkation preferences of passengers . In the US, driving distance from home, parking and customs immigration procedures are top of the list, along with a convenient airlift into the port city, cruise terminal facilities, and options for pre/post stays and interest in the surrounding port area. However, while driving up to four hours is acceptable in the US, in Europe, the respective limit is lower to a maximum of two hours. On the other hand, Europe has shorter train access to ports. Major markets such as the UK and Germany have taken advantage of convenient train-to-cruise patterns of less than three hours, such as at Southampton and Kiel.

Home ports tend to be linked with specific source markets . This is due to proximity, access options, and not least, the preferences of cruise passengers for visits to specific destinations. In Europe where multiple home ports exist, Americans use Southampton, and Dover in the UK, Barcelona in Spain, and Venice, and Civitavecchia in Italy extensively. British passengers depart from the UK (Southampton; Dover), Spain (Malaga, Mallorca), and Malta. Germans depart from Hamburg, Kiel and other nationalities (Italians, Spanish, French, Scandinavians) take advantage of the presence of home ports in their countries.

Each cruising area has its home ports, with the balance of traffic between homeporting and transit passenger movements varying from port to port. The biggest home ports in terms of size are located in the USA, the primary source market for cruise passengers. The biggest of all is Miami, with passengers moving in and out of a cruise trip standing at 50% of the total movements. From Miami (southern Florida), proximity favors Caribbean ports , with the frequency of visits declining further into the Southern Caribbean. The ratio of 50:50 of transit/home port passenger movements is observed in two other major home ports, Port Everglades and Port Canaveral. For home ports such as New York and Galveston, passengers beginning or returning from a cruise represent the total of cruise activities.

In the Mediterranean , the leading home port of Venice has the highest level of homeporting (87%). For Barcelona and Savona, the share of homeporting movements is lower, whereas the share is lower than 40% for the Balearic Islands and Civitavecchia. Three of the five major home ports (Venice, Civitavecchia, Savona) are in Italy. The country is strategically located at the center of the Mediterranean Sea, allowing the development of cruise itineraries to both the West and the East Mediterranean. It is a major source market for cruise passengers and well connected to other major source markets, like Germany and France. Regarding the rest of northern Europe, the major homeport is Southampton, UK, and Hamburg, Germany. The proximity to cruise source markets plays a vital role in the rising of these home ports, as the UK is the largest source market in Europe and Germany holds second place.

cruise industry management

5. Localization of Cruise Supply Chains

Supplying cruise ships is another important element of the economic footprint of cruising. It relates to both the direct supply of goods and services through local companies and the infrastructure required to support the logistics of non-local supply, usually by container. The dramatic changes in the onboard cruise product, along with the growing size and design of cruise ships have contributed to changes in its supply chains and logistics . The latter has been facilitated by technological advancements and re-engineering procurement processes. For instance, prior to the 2000s, the supply chain requirements for most US-based cruise lines were centered around Miami and the Caribbean. However, the cruise industry and its operators now operate in several regions of the world. This, together with the development of logistics and supporting IT management systems, has changed the face of cruise line supply. As a result, in several (major) ports and destinations, the increase in passenger traffic has been associated with a corresponding logistics volume in general.

This new environment creates opportunities for the consolidation and globalization of supplies . It also impacts the local and regional supply bases as improvement in the speed and fluidity of logistics operations requires the coordination of several suppliers. Simultaneously, the major cruise lines have also developed their supply chain infrastructure and support so that they now have strategic control points within major cruise destination hubs. Venice and Barcelona are two such hubs in the Mediterranean. However, there is an increasing requirement by the cruise lines to offer more local, regional and specialized products as part of the onboard guest experience. Therefore, local procurement remains a countervailing force to standard procurement. There is also an increased focus on the real cost of supplying goods to the ship, rather than just the commodity cost itself. Increasingly, there is also a focus on the environmental cost related to ship supply.

cruise industry management

Related Topics

  • Chapter 1.5 Ports and Cruise Shipping
  • Chapter 3.1 Terminals and Terminal Operators
  • Chapter 3.6 Cruise Terminal Design and Equipment
  • Chapter 6.3 Effectiveness
  • Chapter 7.4 Port-City Relationships
  • Cruise Lines Industry Association (CLIA) (2019). 2020 State of the Industry. Washington DC: CLIA.
  • Cruise Market Watch (2020). www.cruisemarketwatch.com.
  • Dowling, R.K. and Weeden, C. (eds) (2017). Cruise ship tourism. 2nd edition, Centre for Agriculture and Bioscience International (CABI).
  • Gui, L. and Russo, A.P. (2011). Cruise ports: a strategic nexus between regions and global lines, evidence from the Mediterranean. Maritime Policy & Management, 38, 2, 129-150.
  • Lekakou M.B., Pallis A.A. and Vaggelas, G.K. (2009). Which Homeport in Europe: The Cruise industry’s selection criteria, Tourismos , 4(4), 215-240.
  • Notteboom T. E. and A. A. Pallis (2020). IAPH-WPSP Port Economic Impact Barometer Half Year Report: A survey-based analysis of the impact of COVID-19 on world ports in the period April to September 2020. IAPH: Antwerp.
  • Pallis, A.A., F. Parola, G. Satta, and T. Notteboom (2018). Private Entry and Emerging Partnerships in Cruise Terminal Operations in the Meditteranean Sea. Maritime Economics and Logistics, 20(1), 1-28.
  • Pallis A.A. and Vaggelas G.K. (2018). “Cruise Shipping and Green Ports: A Strategic Challenge”. Ιn: Bergqvist R. and Monios J. (eds): Green Ports: Inland and Seaside Sustainable Transportation Strategies, 255-273, Cheltenham: Edward Elgar.
  • Pallis, A.A. ,  Rodrigue, J.-P., & Notteboom, T.E. (2014). Cruises and cruise ports: Structures and strategies. Researchin Transportation Business and management, 13, 1-5.
  • Pallis A.A. and Papachristou A.A. (2021). European Cruise ports: Challenges since the pre-pandemic era. Transport Reviews, 41(3), 352-373.
  • Pallis A.A. and Vaggelas G.K. (2020). “The changing geography of cruise shipping”. In: Wilmsmeier G., Monios J., Browne M. & Woxenius J. (eds.) Geographies of waterborne transport: Transitions from transport to mobilities, 170-191. Cheltenham: Edward Elgar.
  • Papachristou A.A. Pallis A.A. and Vaggelas G.K. (2020). Cruise home-port selection criteria. Research in Transportation Business and Management, Online First.
  • Rodrigue, J-P and Notteboom, T. (2013). The Geography of Cruises: Itineraries, not Destinations, Applied Geography, 38, 31-42.
  • Rodrigue, J-P and Wang, G.W.Y. (2020). Cruise shipping supply chains and the impacts of disruptions: The case of the Caribbean. Research in Transportation Business and Management, Online First.
  • UN World Tourism Organisation (UNWTO) (2020a). 100% of global destinations now have COVID-19 travel restrictions, UNWTO Reports. 28 April 2020. 
  • UNWTO (2020b). International tourist numbers could fall 60-80% in 2020, UNWTO Reports, 7 May 2020.
  • Wang, G.W.Y., Notteboom, T.E. & Pallis A.A., (2014). Incentives in cruise terminal concession contracts. International Association of Maritime Economists (IAME) Conference, 2014, Norfolk, US.
  • Weaver, A (2005). The Mcdonaldization thesis and cruise, Annals of Tourism Research, 32(2), 346-366.

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The Cruise Industry Faces Challenges with Optimism

Dean Kate Walsh and 4 industry executives on a webinar panel.

The panelists and Dean Walsh as they began their conversation on the challenges faced by the cruise industry in the wake of COVID-19, and their efforts to overcome them.

For a large part of the pandemic, U.S. cruise operations were suspended by the Centers for Disease Control’s No Sail Order. Issued in October of 2020, and still in effect today, the Framework for Conditional Sailing replaced the No Sail Order and dictates the cruise industry’s phased reopening, which is currently underway.

On April 28, 2021, a panel of experts and industry leaders joined Kate Walsh , dean of the Cornell Peter and Stephanie Nolan School of Hotel Administration and E. M. Statler Professor, for a keynote webinar on the unique challenges faced by the cruise industry throughout the COVID-19 pandemic, lessons learned, and preparations for setting sail once again. The panel consisted of Frank Del Rio , president and chief executive officer of Norwegian Cruise Line Holdings Ltd.; Richard Fain , chairman and chief executive officer of Royal Caribbean Group; Dr. Helene Gayle , MD, MPH, president and chief executive officer of The Chicago Community Trust as well as public health expert; and Cornell Nolan School associate professor of services marketing Robert Kwortnik .

Produced by the Center for Hospitality Research (CHR) and eCornell, the webinar was titled “ Restarting the Cruise Industry: Challenges and Opportunities .”

Here are some of the highlights of the discussion.

Prioritizing responses to the pandemic and working together

When faced with challenges like COVID, industry leaders had to prioritize and work together. According to Frank Del Rio, people—guests and crew—were his top concern as the pandemic abruptly halted cruising and forced the industry into a holding pattern until operations could be deemed safe. Facing similar hurdles, Richard Fain spoke about the Healthy Sail Panel a collaborative effort between his and Del Rio’s organizations, Royal Caribbean and Norwegian, which brought leading public health experts, industry veterans, and academics (including the Nolan School’s very own Dean Kate Walsh) together to detail “best practices [for protecting] the public health and safety of guests, crew, and the communities where cruise ships call.”

Recognizing the need for industry-wide collaboration and support during these challenging times, the 69-page Healthy Sail Panel report has been shared with the entire cruise industry and any other industry—which, as it turns out, are many—that might benefit from its recommendations. Professor Robert Kwortnik, an expert on the leisure cruise industry, gave some insight into the far-reaching effects of the pandemic and the CDC’s No Sail Order on ports and other businesses that rely on revenue generated by cruisers. Since ships ceased sailing in 2020, explained Kwortnik, travel agents’, airlines’, hotels’, restaurants’, and tour operators’ cruise-related revenue ceased too, pitching many of these businesses—and entire communities—into “economic paralysis.”

Ultimately, the report—secondary to preserving peoples’ health and safety—is about knowledge-sharing within and across these interconnected industries and businesses with the hope that widespread implementation of its recommendations will help stop the spread of disease and spark a domino effect of recovery for all.

Controlled environments help maximize health and safety

At the start of the pandemic and prior to the emergence of vaccines, the gathering of large groups of people, especially in confined spaces like cruise ships, posed a health risk. But as the Healthy Sail Panel discovered, a cruise ship’s uniquely “controlled environment” actually proves advantageous for stopping the spread of the virus and mitigating other risks to health and safety. When equipped with infrastructure and personnel for testing, lab work, treatment, and individual medical care, each ship has the ability to proactively prevent and safely contain any potential outbreaks, more so than most other businesses and establishments that people have been frequenting during the pandemic.

More than guidance for onboard procedures, the Healthy Sail Panel’s report also recommends “sailing to strictly controlled ports and destinations where cruise operators can ensure health and safety protocols are in place,” including “limited destinations, controlled excursions, and short trip lengths.” Fain highlighted “curated tours” on which guests can visit a variety of pre-approved—meaning that the proprietors have taken precautions against the spread of COVID-19—onshore attractions in a controlled manner. Meanwhile, Kwortnik drew attention to private islands, which have found new use in the pandemic as additional controlled settings for guests’ onshore exploring.

Finally, Del Rio stressed that fully-vaccinated crews and passengers are the ultimate requirement for controlling the spread—even if that means losing potential profit from families with children who are still too young to be inoculated.

Future of industry and broader implications for public health

Looking toward the future of the industry, Del Rio expressed optimism on demand, saying that Norwegian is “substantially better booked” for 2022 than for both 2019 and 2020. Kwortnik agreed, calling the industry “historically very resilient” and noting that in many ways, they are “ahead of the curve” in sanitation and operational procedures.

On her outlook, Dr. Helene Gayle noted the potential for the cruise industry to “influence public health more broadly” with what they’ve learned, given the likelihood of more pandemics emerging in the future. She hoped that the Healthy Sail Panel’s work would provide a “shortcut” in terms of public health measures and “build resiliency” for future pandemics. Drawing attention to the “imperative” of vaccination for crew and passengers, she also raised the issue of overcoming inequality in international access to vaccines—especially considering the cruise industry’s “global workforce,” with many crew members coming from countries with less access to vaccines than in the United States.

Finally, Del Rio and Fain imparted some insights to future leaders. These included the importance of teamwork and communication, and navigating the new and evolving responsibilities of their jobs, such as talking with governments about health standards. In particular, Del Rio stressed the need to “quickly develop” a plan with input from one’s team rather than feeling sorry for oneself, and to “overcommunicate when in doubt.” Fain placed emphasis on the human aspects of the industry, with regards to “help[ing] people into new areas,” saying that people are ultimately what it “really does come down to.”

The cruise industry has come together to create a multi-layered healthy cruise experience. It is likely one of the safest vacation experiences available to travelers, and with extraordinary pent-up demand, the industry is looking forward to its exciting return.

If you’re interested in learning more, watch the recording for more details on restarting the cruise industry.

Learn about the CHR

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Amy Wang

Amy Wang '24

Amy Wang is a staff writer for the Cornell Peter and Stephanie Nolan School of Hotel Administration's Centers & Institutes. She is a prospective English major in Cornell’s College of Arts and Sciences. She can often be found writing for the Cornell Daily Sun and editing for the literary magazine Rainy Day. It is her appreciation for the written word that motivates her to produce articles on the research taking place at the Centers & Institutes.

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Cruise industry worldwide - statistics & facts

What are the biggest global cruise markets, what are the leading cruise companies worldwide, key insights.

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Revenue of the cruises industry worldwide 2019-2028

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Number of global ocean cruise passengers 2009-2027

Worldwide cruise company market share 2022

Related topics

Cruise market.

  • Cruise industry in the United States
  • Cruise industry in the Caribbean
  • Cruise industry in Europe
  • Cruise industry in the United Kingdom (UK)

Shipbuilding industry

  • Cruise shipbuilding industry worldwide
  • Shipbuilding industry worldwide
  • Shipbuilding and maritime activities in Turkey

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Revenue of the global travel and tourism market from 2019 to 2028, by segment (in billion U.S. dollars)

Revenue of the cruises market worldwide from 2019 to 2028 (in billion U.S. dollars)

Revenue growth of the cruises market worldwide from 2019 to 2028

Leading countries in the cruise industry revenue worldwide from 2025 to 2028 (in million U.S. dollars)

Share of sales channels of the global cruise industry revenue 2017-2027

Revenue share of sales channels of the cruise industry worldwide from 2017 to 2027

Cruise ships

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Largest cruise ships worldwide 2023, by gross tonnage

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Most expensive cruise ships worldwide by building cost 2022

Most expensive cruise ships worldwide in 2022, by building cost (in billion U.S. dollars)

Gross tonnage of new cruise ship orders worldwide 2015-2022

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Gross tonnage of new cruise ship orders worldwide by region 2022

Gross tonnage of new cruise ship orders worldwide in 2022, by region (in millions)

Gross tonnage of cruise ship deliveries worldwide by region 2022

Gross tonnage of cruise ship deliveries worldwide in 2022, by region (in millions)

Gross tonnage of cruise ships in the global order book by region 2022

Gross tonnage of cruise ships in the global order book in 2022, by region (in millions)

Average passenger capacity of ocean-going cruise vessels worldwide 2018-2026

Average passenger capacity carried by ocean-going vessels in the cruise industry worldwide from 2018 to 2023, with a forecast until 2026

Cruise passengers

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Number of ocean cruise passengers worldwide from 2009 to 2022, with a forecast until 2027 (in millions)

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Number of passengers carried by Norwegian Cruise Line Holdings Ltd. worldwide from 2011 to 2023 (in 1,000s)

TUI cruise passengers worldwide 2013-2023, by brand

Number of passengers on TUI cruise brands worldwide from 2013 to 2023, by brand (in 1,000s)

Cruise companies

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  • Premium Statistic Revenue of Carnival Corporation & plc worldwide 2008-2023, by segment
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Net income of Carnival Corporation & plc worldwide from 2008 to 2023 (in billion U.S. dollars)

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Net income of Royal Caribbean Cruises worldwide 2007-2023

Net income of Royal Caribbean Cruises Ltd. worldwide from 2007 to 2023 (in million U.S. dollars)

Revenue of Norwegian Cruise Line worldwide 2013-2023, by segment

Revenue of Norwegian Cruise Line Holdings Ltd. worldwide from 2013 to 2023, by segment (in billion U.S. dollars)

Net income of Norwegian Cruise Line worldwide 2011-2023

Net Income of Norwegian Cruise Line Holdings Ltd. worldwide from 2011 to 2023 (in million U.S. dollars)

TUI cruise brand revenue worldwide 2015-2023, by brand

Revenue of TUI cruise brands worldwide from 2015 to 2023, by brand (in million euros)

Impact of COVID-19

  • Premium Statistic Annual growth rate of the global cruise passenger volume 2017-2022
  • Premium Statistic Global cruise passenger volume index 2019-2026, by scenario
  • Premium Statistic COVID-19 impact on cruise passenger volume worldwide 2020-2022, by source region
  • Premium Statistic COVID-19 impact on revenue of leading cruise companies worldwide 2020-2022

Annual growth rate of the global cruise passenger volume 2017-2022

Annual growth rate of the cruise passenger volume worldwide from 2017 to 2022

Global cruise passenger volume index 2019-2026, by scenario

Cruise passenger volume index worldwide from 2019 to 2021, with a forecast until 2026, by scenario

COVID-19 impact on cruise passenger volume worldwide 2020-2022, by source region

Percentage change in cruise passengers during the coronavirus (COVID-19) pandemic worldwide from 2020 to 2022, by source region (compared to 2019)

COVID-19 impact on revenue of leading cruise companies worldwide 2020-2022

Percentage change in revenue of leading cruise companies worldwide during the coronavirus (COVID-19) pandemic from 2020 to 2022

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The global cruise industry: Financial performance evaluation

The global cruise industry has experienced persistent growth dynamics over the last two decades, with an impressive rebound after the 2008 financial crisis, unlike commercial shipping. Globalization, restructurings, mergers and a diverse bundle of travel and tourism services to cater for different passenger profiles have boosted robust revenue and profitability growth. Major cruise companies deploy ambitious investment plans to expand and renew their expensive fleet with larger modern vessels of high value. The mix of funding sources to finance these capital-intensive projects is critical and exerts a direct impact on the cost of capital. The paper contributes a rigorous corporate financial performance evaluation in the cruise sector and attempts to shed light on managerial financial efficiency, capital structure options, solvency conditions and corporate value dynamics. A sample of leading cruise companies, jointly holding a dominant market position, is incorporated to empirically investigate and assess their financial, accounting and stock market performance, based on convenient financial ratios and established market metrics. The detrimental impact of the recent coronavirus pandemic on the cruise sector is also discussed. This original study attempts to bridge the relevant research gap, as past literature remains surprisingly thin on this critical topic. A set of challenging and innovative contributions is delivered for the financial performance of major cruise companies, for the first time to the authors' knowledge, in support of efficient managerial implications and recommendations.

1. Introduction

Cruise tourism business is a form of traveling for leisure purposes that involves an all-inclusive holiday on a cruise ship. According to UNWTO, cruise tourism includes ‘a wide range of activities for travelers in addition to its traditional function of providing transport and accommodation’. The cruise industry is the fastest growing sector of the travel industry, with demand estimated to grow at 7.0% per annum over the past decade, and cruise passenger surpassing the threshold of 30 mln. in 2019 ( CLIA, 2020 ; Wondirad, 2019 ). At the same time, the business is seen to be extremely volatile and ever more highly capital-intensive. Newbuilt cruise vessels can cost multiples in value compared with commercial ocean ships, estimated at $1.3 bln. per vessel, accommodating up to 6000 passengers, albeit at lower operating unit costs ( Dowling, 2006 ; Lester & Weeden, 2004 ; Wood, 2004 ). Nevertheless, in the 1990s, the cruise industry has experienced extensive restructuring, following a wave of failures and consolidations. Larger holding cruise companies acquired smaller peers that continued operating as ‘brands’ withing the new business ventures though, serving repeat customer loyalty and offering diverse quality and service levels.

Financial empirical research on cruise shipping remains surprisingly thin. Few earlier studies investigate, selectively, topics such as, the translational partnership organization of the industry ( Hall & Braithwaite, 1990 ); cruise impact on and implications for regional and local market development ( Hobson, 1993 ); cruise market globalization trends ( Wood, 2000 ); cruise strategic capacity investments ( Byung-Wook, 2005 ; Wie, 2005 ); cruise line and passenger challenges ( Veronneau & Roy, 2012 ); cruise line supply chains and logistics ( Daly & Fernandez-Stark, 2017 ; Veronneau and Roy, 2009 , Veronneau and Roy, 2011 ; Veronneau, Roy, & Beaulieu, 2015 ); fund raising approaches for newbuilding cruise ships ( Kiziellewicz, 2017 ; OECD, 2007 ); and mergers, acquisitions and restructurings ( Charlier, 2004 ; Hobson, 1994 ); inter alia.

This study focuses on the financial performance evaluation of the global cruise business and attempts to fill this research gap in the field by contributing a set of challenging and innovative findings, as well as managerial implications and recommendations. To the authors’ best knowledge, this appears to be the first attempt to investigate in depth the critical issues of managerial efficiency, profitability, and growth prospects, financing sources and capital structure, leverage, solvency, and value creation dynamics in the context of the global cruise industry. Initially, a concise overview of prevailing key developments and trends in the cruise business over recent years is provided. Subsequently, critical key financial metrics and performance indicators are estimated and evaluated over time and against major peer competitors for a sample of leading cruise players.

The theoretical framework and the stream of literature that the paper is grounded on relates to critical investment and financing decisions and their financial implications for managerial performance, corporate profitability, value creation, and firm growth. To this end, in a broader context, a core set of seminal reference papers investigate key managerial decisions on funding source options (debt and/or equity), capital structure mix priorities, (weighted average) cost of capital (WACC) shifts, and share price volatility, inter alia, as well as their interrelated implications for investment decisions and overall corporate financial performance (e.g., Baker & Wurgler, 2002 ; Donaldson, 1961 ; Hovakimian, 2006 ; Kisgen, 2006 ; Modigliani and Miller, 1958 , Modigliani and Miller, 1963 ; Myers, 1984 , Myers, 2001 ; Myers & Majluf, 1984 ). It remains an innovative, challenging and fruitful empirical task to investigate the financial implications of these decisions and evaluate the managerial efficiency and financial performance of major global cruise companies, as depicted and reflected on the evolution of critical and widely established financial ratios and metrics. Indeed, these issues are not seen to have been investigated yet in the relevant empirical literature. Nevertheless, they remain important for a highly capital-intensive sector, such as the cruise industry, taking, indicatively, into consideration that the cost of a newbuild cruise vessel can now surpass the $1.0 bln. threshold ( CLIA, 2020 ).

The empirical approach is based on a blended financial methodology, including preliminary data mining and collection, financial statement analysis and comparative assessment and evaluation of critical cruise financial ratios and indices. Based on that, a set of focal policy recommendations is finally provided. The information input is obtained from financial statements and annual reports, stock market datasets and company financial analysis reports, over a recent five-year horizon.

The paper is structured as follows. Section 2 provides a concise summary of recent developments in cruise demand and supply sides, identifying critical growth drivers, economic implications, and prospects ahead. Section 3 overviews major cruise company investment decisions; and Section 4 analyses the complex topic of financing decisions and fund-raising approaches, based on alternative capital structure options that eventually shape the critical cost of capital indicator. Section 5 investigates, analyses, and evaluates a set of key financial ratios, metrics, and indicators to assess cruise company financial performance and value creation dynamics. Finally, Section 6 concludes.

2. Cruise business growth drivers

2.1. demand for cruise services and economic impact.

Cruise shipping business offers a bundle of combined global shipping and tourism services to cruise passengers, as it caters for vacation services on board and ashore, with a full package of diverse recreational tourism-related services. However, a fundamental strategic shift is seen in global cruise business over time ( Garin, 2005 ). Whereas in earlier days, cruise shipping services were mainly targeting higher net-worth luxury customers at substantial price cost, the industry has gradually diversified to demonstrate market segmentation and to attract massively average-income cruise passengers of different age and social profiles. This trend has been supported by attractive cruise service packages at reasonable prices, as massive newbuilt vessel capacity has resulted to extensive economies of scale benefits. Broadly, cruise shipping is perceived as a ‘customer's market’, shaped by shifting consumer tastes and trends. Cruise passengers appear to increasingly prefer ‘paying more for experiences than for possessions’.

Cruise shipping is the fastest-growing segment in the leisure travel market with high capacity utilization rates. The prime cruise business actors include more than 55 cruise line companies, offering ocean, river, and specialty cruise services, and covering more than 95% of global cruise capacity. Business members include also more than 340 executive partners that are key suppliers and cruise line partners, including ports and destinations, ship development suppliers and business services; around 15,000 travel agencies, including the largest players, hosts, franchises and consortia; and, 25,000 travel agent members worldwide ( CLIA, 2019 ).

Contrary to commercial ocean shipping, the global cruise business has shown robust growth rates and persistent recovery, after the 2008 financial crisis. In terms of total revenue, the cruise industry generated $46.6 bln. in 2018, exhibiting a spectacular rebound since revenue had declined abruptly below $25 bln., due to the recession spread after 2008 ( CLIA, 2020 ). The economic output generated by the global cruise industry is estimated at $150 bln. in 2018 against $126 bln. in 2016 (+20%, 2018/2016), with 28.5 mln. cruise passengers, offering 1.17 mln. jobs (full-time equivalent employees; +6.2%, 2018/2017), and distributing $50.2 bln. in wages and salaries ( CLIA, 2018 , CLIA, 2019 ). In view of global passenger spending capacity, estimates indicate aggregate direct purchases of $7.97 bln. (+11.4%, 2018/2017), corresponding to $376 average passenger spending before boarding a cruise and to $101 in port visiting during a cruise. Furthermore, 65% of cruise passengers is seen to spend a few extra days at embarkation or debarkation ports. Cruise business is seen to develop around Caribbean, Australasia, Brazil, Europe, North America, Asia, Canada, UK, and Ireland. The worldwide income multiplier effects of the cruise industry have wider economic implications, as these disseminate to a wide spectrum of related business sectors and activities.

Over 2008–2018, the global cruise business has experienced an unprecedented 10-year average growth above 45% in sourced cruise passengers ( CLIA, 2019 ; Florida Caribbean Cruise Association, 2019 ). This performance is attributable predominantly to the spectacular passenger growth from European markets (60.4%), followed by North American markets (39.4%). This figure raises up to nearly 75% if passenger growth of the rest of the world is also counted ( Table 1 ). The number of total cruise passengers came up to 30 mln. in 2019 from 16.3 mln. in 2008 (+84%). A steady cumulative annual passenger growth rate (CAGR) at 7% is estimated over 1990–2020.

International demand for cruises (sourced passengers, mln).

Source: CLIA (2019) .

Initial estimates on the number of annualized worldwide cruise passengers carried indicate 32.0 mln. passengers for 2020 against 3.6 mln. passengers back in 1990 (+790%, 2020/1990) ( Fig. 1 ).

Fig. 1

Global cruise passengers carried (mln.)

Cruise passengers originate from a diversity of geographic regions and source markets ( Table 2 ). North America remains by far the largest source region of cruise passengers, contributing more than half of global cruise passenger flows (50.2%); its share, though, has dropped compared with 2007 (66%). Europe follows at a distance (23.7%) and has also seen its share slightly on the decline. Asia, on the other hand, is a robustly upcoming cruise passenger source region (15.0% in 2019, up from 9.2% in 2018).

Worldwide cruise passenger by source region (%).

Europe: Benelux, France, Germany, Italy, Scandinavia, Spain, Portugal, UK. Source: CLIA (2020) .

The breakdown of preferred destinations, as depicted by cruise line deployment by region is presented for 2018 and 2019 in Table 3 . The Caribbean remains by far the prime cruise destination of high demand (32%) with the Mediterranean (17%) and Europe (excluding Mediterranean; 11%) following at a distance ( Table 3 ).

Cruise line deployment by region (%).

Source: CLIA (2020) .

The cruise market share distribution among major cruise players is presented below ( Table 4 ). Three leading players are seen to dominate the global cruise market. Carnival Corporation holds a dominant position with passenger and revenue market shares at 47.4% and 39.4%, respectively. Royal Caribbean Cruise ranks second with passenger and revenue shares at 23.0% and 20.2%, respectively. Norwegian Cruise Line Holdings follows at a distance with passenger and revenue shares at 9.5% and 12.6%, respectively. These three major players control a global cruise market share of 80% in passenger terms and 72.2% in revenue terms, respectively.

Cruise line market share.

Source: Authors' compilation; www.cruisemarketwatch.com .

2.2. Growth drivers and prospects

Cruise shipping growth is driven by consistent efforts of all parties involved to explore alternative approaches towards increasing business efficiencies. These include further newbuilding investments to expand and modernize cruise fleet, adding new vessels of larger capacity, diversifying the destination choices offered, increasing penetration in core North American and Latin American markets, attracting more passengers from new source markets and enriching on-board and on-shore activities to meet cruise passenger demands. Furthermore, the inclusion of more local ports has been treated responsibly, based on collaboration with cruise destinations and local communities. The cruise industry is seen to become more conscientious, paying attention towards preservation of local cultures and landmarks and minimization of environmental footprints; exploring alternative creative ways to manage visitors' flows; and, implementing higher standards of responsible tourism. The latter include partnerships with local governments, staggered arrivals and departures, local excursion diversification, shoreside power, and local passenger spending, as more travelers are spending time in and near cruise ports (e.g., Klein, 2011 ).

Broadly, the cruise industry demonstrates promising growth dynamics ahead. This is supported by a global shift in consumer tastes and habits around cruise services, irrespective of passenger generation. For instance, more than 66% of generation ‘X', 71% of millennials, and expanding percentages of generation ‘Z', originating predominantly from the vital US market, are seen to have an increasingly positive attitude towards cruise travel and tourism services compared with earlier years. Generation ‘Z' is anticipated to become the largest consumer generation by 2020 outpacing even millennials. This generation, like the one before, prefers experiences over material items. They appear to prefer cruise travels, including multiple destinations and targeted specialized services (such as music festivals at sea, for instance; CLIA, 2020 ).

Cruise passenger numbers originating from major emerging markets, such as China, India, and Latin America, are anticipated to increase further, supported by improving global disposable income and economic growth conditions. In addition, social demographic shifts indicate that, as global marriage rates are on a decline, increasing numbers of single adults are seen to pursue lone cruise services with a ‘traveling alone’ focus. Cruise lines respond to this upcoming clientele by offering, targeted ‘solo travel’ services, such as studio cabins, solo-lounges, and single-friendly activities. Another upcoming cruise clientele sub-group is female travelers, as their numbers are seen growing. Many tourism and travel companies are creating female-centered cruise itineraries, based on focused interests, and facilitating building women community bonds ( CLIA, 2020 ). Relevant references investigating these issues further include Teye and Leclerc (2003) , Chen, Neuts, Nijkamp, and Liu (2016) , Satta, Parola, Penco, Persico, and Musso (2016) , inter alia.

What is more, cruise travelers are now seen to set sights on destinations that were previously out of reach and some only accessible by cruise ships from the Galapagos Islands to Antarctica. Demand for off-peak season cruise packages also exhibits rising popularity, as travelers may prefer to visit tropical destinations to escape a domestic cold season. The number of modern ‘digital nomads’, that is travelers combining work with leisure time, is also on the rise. This target group can enjoy cruise vacation services in conjunction with remote e-work, cutting down on time-off and still earning an income. On the other hand, micro travel cruise services exhibit upward demand trends as well, as many travelers are interested in quick recreational trips of varied and flexible trip duration alternatives. In response to that, cruise companies offer bite-sized cruise options of three-to-five-days, scheduling shorter itineraries to a variety of destinations.

3. Investment decisions in the cruise business

The cruise companies promote consistently a set of ambitious and capital-intensive strategies to sustain business growth. Newbuilding investment projects target to expand and modernize the existing fleet with vessels of larger capacity. Total cruise industry capacity reached 537 thous. passengers and 314 ships, with about 55 active cruise companies at the end of 2018 ( CLIA, 2020 ). The brand diversification of operations is summarized in Table 5 .

Cruise passenger capacity.

Source: Authors' compilation; CLIA (2020) .

Most cruise players have large investment plans under deployment, scheduled over 2019–2025. For instance, Carnival, Royal Caribbean, and Norwegian plan to invest $4.2 bln., $7.2 bln., and $4.5. bln., respectively, in newbuilding vessels, aggregating to $16 bln. in investments. With total cruise sector investments adding up to $70.3 bln., the joint investment share of these three major players corresponds to 23% of total cruise investment budget ( Table 6 ).

Newbuilding investments – capital requirements (USD bln.), 2019–2025.

Source: Authors' compilation; www.cruisemarketwatch.com (2020).

Broadly, an impressive newbuilding cruise vessel orderbook is under execution over 2019–2025 ( Table 7 ; more details in Table 7A in the Appendix; ( WAC, 2019 )). It is worth noting that the large vessel size in several cases can accommodate more than 6000 cruise passengers. Recent feedback on cruise investment plans indicates that 278 vessels are projected in operation by the end of 2020 and 19 vessels are scheduled to debut in 2020. The average age of cruise fleet is seen at 14.1 years, improved from 14.6 years in 2018.

Cruise ship newbuilding orders, 2019–2025.

A broader issue of concern for cruise investments relates to the environmental sustainability commitment. While cruise ships comprise less than 1% of global maritime fleet, the entire shipping industry benefits from the adoption of new technologies and practices that were not in play earlier. The development of new technologies and cleaner fuels remains a high priority for the cruise industry. Estimates indicate that the cruise companies have invested over $22 bln. in new energy-efficient ships and technologies to minimize the environmental impact, supporting the goal of reducing carbon emission rates by 40% by 2030 compared to 2008 ( CLIA, 2020 ). As per new emission standards, sulfur in the fuel is limited to 0.5% from January 2020. The cruise industry is also seen to be consistently committed to responsible tourism practices, with a focus on destination stewardship, setting-up partnerships with local governments in key destinations. A complementary concern relates inevitably to cruise hosting port constraints, including market segmentation, vessel size service capacities, seasonality effects and congestion bottlenecks at peak periods. To that end, cruise players are anticipated to invest further into port facilities and related infrastructure.

Having said that, the compliance of cruise companies to environmental protection is associated with high investment costs for the construction of new generation cruise ships. Vessel manufacturing costs also rise as ships incorporate innovative advanced technologies. Although cruise vessel prices are seen, on average, at around half a billion dollars, updated estimates indicate this figure to now surpass the one billion dollars threshold ( CLIA, 2020 ). To that end, the critical questions as to how these massive investments are to be financed and at what capital cost remain to be tackled. Following the global financial crisis, several leading international banks specialized in ship credit, such as RBS and DVB, have decided to exit ship lending entirely, liquidating their ship loan portfolios. On the other hand, an emerging global trend relates to private entry strategies, partnerships, and internationalization patterns of cruise companies entering cruise terminal operations in major destinations, such as the Mediterranean Sea ( Pallis, Parola, Satta, & Notteboom, 2018 ). Plausibly, the deployment of such strategies is anticipated to bring about considerable financial implications for cruise lines and cruise terminals, both in terms of spending patterns as well as of income.

4. Financing decisions in the cruise business

4.1. capital funding priorities.

The financing approach a cruise company is to follow to fund its investments and the contribution of alternative capital source options are of fundamental managerial importance. Obviously, this should have direct implications for this cruise company's optimal capital structure mix and its cost of funding. The investigation of these issues in the context of cruise companies remains a challenging and innovative task. To the authors' knowledge, this appears to be the first empirical study tackling these issues in the cruise industry. This research interest is further reinforced and justified considering that the global cruise industry is a highly capital-intensive business with consistent investment expansion plans under development over the last decades, associated with substantial funding requirements. As noted earlier, most cruise companies plan to expand and upgrade their fleet and have already placed a massive newbuilding orderbook under play. The incorporation of luxury facilities and high-end technological advances and services drive unit vessel prices even higher than $1.3 bln. ( CLIA, 2020 ).

Managerial financing decisions have direct implications for the cruise company's capital structure mix, its cost of capital and, eventually, shareholder value creation and growth prospects. The capital structure mix refers to the percentage weights of equity and debt, reflecting the respective capital source contribution to form the company's total invested capital. As the cost of equity and cost of debt differ, modifications in the capital structure mix also affect the company's overall cost of capital. These focal issues have generated steaming debate among academics and market practitioners over time. A summary of major finance theories on capital structure is now provided and subsequently explored briefly in the context of the cruise business.

Modigliani and Miller (1958) , first, postulate the capital structure irrelevance approach. Assuming perfect markets and absence of taxes and bankruptcy costs, the capital structure mix is irrelevant because firm market value is determined by the company's earning power and the risk of its underlying assets. Modigliani and Miller (1963) incorporate, subsequently, the tax effect on capital cost and firm value. In this case, firm value increases with leverage due to tax shield benefits. Interest on debt capital is an acceptable deduction from the firm's income and thus decreases the firm's net tax payment. Assuming potential tax benefits, debt financing can result to lower cost of capital.

Trade-off theory, furthermore, argues that the optimal level of debt is where the marginal debt benefit is equal to its marginal cost ( Myers, 1984 ). Debt financing up to a certain level contributes interest tax shield benefits, offsetting financial distress costs. A firm can attain an optimal capital structure by adjusting debt and equity weights, thereby balancing tax shield benefits and financial distress costs. Myers and Majluf (1984) postulate the pecking order theory, based on earlier research by Donaldson (1961) , and argue that (assuming perfect capital markets) management prefers internally generated funds rather than raising external funds. A company should prefer internal funding first, then issue debt, and finally, as a last resort, issue equity capital. Firms with higher profit and growth opportunities would use less debt capital ( Myers, 2001 ). If a firm has no investment opportunities available, profits are retained to avoid future external financing. Information asymmetry between insiders and outsiders and separation of ownership can explain why firms avoid capital markets.

Market timing theory of capital structure maintains that companies are more likely to issue equity when their market value is high, relative to book and past market values, and to repurchase equity when their market value is low ( Baker & Wurgler, 2002 ). Share price volatility affects corporate financing decisions, and eventually the firm's capital structure. As the resulting effects on capital structure are persistent, this indicates that current capital structure is strongly related to historical market values. Capital structure is perceived to be the cumulative outcome of past attempts to time the equity market. It is argued though, that market timing does not exert material effects on the firms' capital structure in the long run ( Hovakimian, 2006 ). The credit rating-capital structure (CR-CS) hypothesis is proposed as an extension of the existing trade-off theory of capital structure ( Kisgen, 2006 ). Capital structure decisions are expected to adjust along the relevant benefits and costs associated with shifts between different credit rating levels. When a firm is closer to a rating shift, it may issue less debt compared to the alternative of being far from a credit rating shift.

To sum up, debt financing can offer a lower cost of capital, due to tax deductibility advantages. A company with positive prospects can proceed to raise capital using primarily debt rather than equity, so to avoid ownership dilution (transmitting negative signals to market players). Debt signaling (company announcements of funding with debt) is typically seen as positive news. However, a high debt exposure bears enhanced bankruptcy risks, and increases shareholders' financial risks, thus a higher return on equity is required. To conclude, companies must assess their optimal funding mix at which the marginal benefits of debt equal the marginal costs incurred. The optimal capital structure mix is associated with that combination of equity and debt financing that results to a lower cost of capital, supporting robust value creation prospects.

4.2. Capital structure mix and WACC

Based on 2019 figures, all three major cruise companies have seen their long-term debt exposure increased against 2018, by 22.8% at $9.7 bln. for Carnival, by 8.4% at $9.0 bln. for Royal Caribbean, and, by 5.2% at $6.1 bln. for Norwegian ( Table 8 ). This reflects a debt weight reallocation in the capital structure mix for Carnival and Norwegian, though this remained stable for Royal Caribbean. Over 2016–2019, debt funding contribution increased from 41.9% to 43.7% for Carnival and from 59.2% to 59.9% for Royal Caribbean but declined overall from 65.1% to 61.1% for Norwegian. On average, Carnival is seen to rely more on equity funding (equity/debt mix: 60/40), contrary to Royal Caribbean and Norwegian that are seen to be more dependent on debt (equity/debt mix: 40/60) ( Table 9 ; Fig. 2 ).

Capital sources (USD bln.).

Source: Authors' calculation based on cruise company financial statements.

Cruise company capital structure mix (%).

Fig. 2

Capital structure mix components.

As the capital structure of major cruise companies indicates, the funding mix is relatively balanced with a reasonable exposure to debt risk. This comes in contrast to global commercial shipping business that is seen to be typically financed predominantly by bank lending ( Drobetz, Gounopoulos, Merikas, & Schroder, 2013 ; Syriopoulos, 2007 , Syriopoulos, 2010 ).

The weighted average cost of capital (WACC) is a critical metric for a company's aggregate cost of funding from all potential capital sources. It is calculated as the weighted average cost of equity and cost of debt (weighted contribution of equity and debt (plus of any other capital source) in total invested capital), that is:

where: k e  = cost of equity; E  = Equity; k d  = pre-tax cost of debt; t  = corporate tax rate; D  = Debt; E/(E + D) and D/(E + D)  = weights of equity and debt in the company's capital structure, respectively.

Hence, WACC is a key indicator of the minimum after-tax required rate of return which the cruise company must earn for all its investors (capital suppliers, i.e. shareholders and debtholders). At the same time, the company's cost of capital is the expected return to both stakeholders (owners and lenders) and represents investors' opportunity cost of taking on the risk of investing their funds into the company. More specifically, cost of equity is the required rate of return on common stock of the company. It is the minimum rate of return which a company must earn to keep its common stock price from declining. Cost of equity is estimated using alternative models (including, dividend discount model (DDM) and capital asset pricing model (CAPM)). After-tax cost of debt represents the after-tax rate of return debtholders require to earn until debt maturity. Cost of debt is calculated by assessing the yield to maturity of the company's bonds and other loan instruments. If no yield to maturity is available, the cost of debt can be estimated using the instrument's current yield. After-tax cost of debt is included in WACC calculation because debt offers a tax shield (i.e., interest expense on debt reduces taxes and this is incorporated in the cost of debt calculation). The WACC factor for major cruise companies in 2019 is summarized below ( Table 10 ).

Cruise company cost of capital, WACC (%).

WACC: Weighted Average Cost of Capital. Year: 2019.

Source: Authors' calculation based on cruise company financial statements and Bloomberg database.

The next section focuses on the core research objectives and develops the empirical methodology on the financial performance evaluation of major cruise companies to contribute a set of fruitful managerial recommendations, and conclusions.

Fig. 3 illustrates the underlying logical nexus and summarizes the earlier key points, interrelating cruise company investment and financing decisions with critical corporate financial performance ratios and metrics to follow in the next section and highlights the paper's contributions to the topic at hand.

Fig. 3

Nexus of investment and financing decisions to cruise company financial performance.

Source: Authors' compilation.

5. Financial performance evaluation: Methodology and key findings

This section deals with a solid quantitative assessment of corporate financial performance dynamics, and trends shaped in the cruise industry, over the period 2016–2019. As mentioned, this topic remains surprisingly unresearched in the relevant academic literature (e.g., Clancy, 2017 ). To explicitly state the research objectives and innovative contributions of this study, the following critical issues are investigated for leading global cruise companies: the ambitious investment plans under deployment; the capital funding priorities and sources, based on the decomposition of the capital structure mix; and, the assessment and evolution of the WACC metric over time. To assess, subsequently, the profitability robustness, value creation dynamics and growth prospects of the sample cruise companies, an integrated financial performance evaluation approach is undertaken, based on a widely applicable, financial ratio analysis, focusing on the following key issues: revenue and profit growth; managerial efficiency, as depicted by ROE, ROA, ROIC ratios; the ROIC-WACC interrelationship and its growth and value dynamics implications; financial leverage exposure and solvency assessment; and earnings per share ratios and share price performance over time.

To serve these research objectives, the empirical methodology is based on a solid corporate financial analysis, assessment, and evaluation of critical financial ratios and established metrics on key cruise market players, built on financial statement, accounting, and stock market inputs. This applied approach can then produce useful empirical findings and policy recommendations for efficient managerial decisions of the cruise companies. Though this methodological framework is standard in different business sectors, to the authors' best knowledge, this appears to be the first empirical application to global cruise corporate players.

A case study company sample is selected, consisting of the major cruise players, namely Carnival, Royal Caribbean, and Norwegian cruise lines. As discussed earlier, these cruise companies hold an undoubtedly dominant market share, as they jointly control more than 80% of the global cruise market in terms of revenue and passengers and set the financial tune in the sector ( CLIA, 2020 ). Hence, by focusing on these companies, a solid, reliable, and sufficiently representative feedback can be gained for the overall cruise sector. Furthermore, these leading cruise companies have their shares listed and traded on international stock exchanges (New York, London); thus, useful empirical reflections can be gained by their stock market behavior, performance, and market value. The consolidated financial statements of the sample cruise companies have been incorporated for the empirical financial analysis. These cruise companies own several subsidiaries (e.g., Carnival Corporation & PLC owns Costa Crociere, and Aida Cruise, through Costa Group; as well as it owns P&O Cruises and Cunard, through Carnival UK, etc.), and the strategies of the parent companies are realized also by their own brands.

As a point of clarification, MSC Cruise is also an important cruise market player, though it holds a relatively lower market share compared with the other sample companies. MSC was initially included in the preliminary sample compilation under study. However, it was eventually excluded from the final sample, to preserve data consistency and convergence, as MSC Cruise is not listed on a stock exchange and a part of the research interest is in the stock market behavior of the listed cruise companies. Due to the dominant market share and economic importance of the sample cruise companies, the empirical analysis and findings are not expected to be affected materially by the exclusion of MSC Cruise. In any case, a relevant follow-up study could enrich and expand on the current sample to include more cruise players.

A brief corporate profile of each sample cruise company now follows.

5.1. Cruise company profile

Carnival Corporation & Plc (CCL) offers cruise services under the Carnival Cruise Lines, Holland America Line, Princess Cruises, and Seabourn brand names in North America; and AIDA Cruises, Costa Cruises, Cunard, and P&O Cruises names in Europe, Australia, and Asia. Carnival runs 100 cruise ships and is a sole dominant cruise market player, as it controls a market share at 48%. This is the only cruise group with its shares traded on dual listing (S&P500 and FTSE100 indices). The company was founded in 1972 and is headquartered in Miami, Florida.

Royal Caribbean Cruises Ltd. (RCL) operates as a global cruise vacation company the cruise brands Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises. The firm also holds interest in TUI Cruises, Pullmantur and SkySea Cruises brands. Royal Caribbean runs 60 ships and holds a significant cruise market share at 23%. The company plans to launch 11 new cruise ships of average vessel capacity over 4500 passengers by 2025. The company was founded in 1968 and is headquartered in Miami, Florida.

Norwegian Cruise Line Holdings Ltd. (NCLH) is a global cruise company and operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands, offering itineraries to more than 490 destinations worldwide. With a combined fleet of 28 ships, and nine ships to be added by 2027 with an average capacity of 3000 passengers per vessel it holds a cruise market share at 10%. The company was founded in 2010 and is headquartered in Miami, Florida.

5.2. Revenue and profit growth

Cruise revenues exhibit consistently robust growth trends for the leading cruise players, over 2016–2019 ( Table 11 ). Contrary to most commercial shipping market segments that experienced abrupt and persistent revenue declines since the outbreak of 2008 global financial crisis, cruise shipping has seen a robust resistance and relatively rapid recovery. In 2019, Carnival recorded cruise revenue at $20.8 bln. (+10.3%, 2019/2018). Similarly, Royal Caribbean also gained robust revenues at $10.9 bln. (+15.3%, 2019/2018). Norwegian Cruise Line, on the other hand, saw comparatively modest revenue growth at $6.5 bln. (+6.6%, 2019/2018).

Cruise company revenue and profits.

EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization.

Source: Authors' calculations; cruise company financial statements; www.macrotrends.net .

Gross profits exhibit an upward trend for all three cruise players, especially for the market leaders, Carnival, and Royal Caribbean. Earnings before interest, tax, depreciation, and amortization (EBITDA) is considered as a critical indicator of operational profitability and is defined as income after operating expenses have been deducted and before interest payments, taxes, depreciation, and amortization have been deducted. This profit component is to compensate subsequently for debtholder claims (interest payments), State claims (taxes) and, lastly, shareholder claims (dividends), with the latter ones perceived as residual claimants, bearing highest risk levels. The leading cruise companies exhibit modest EBITDA and Net Income shifts over 2016–2019.

According to a market motto, ‘if gross profit is not there, there will be no net profit’ as well. Gross profit margin is calculated as the ratio of gross profits to revenue. Assuming a cruise company investing in a sector that exhibits a high gross profit margin but not making bottom-line net profits may be a striking indication of a mismanaged case. Corporate restructuring and operational tuning may be required to turn the business into a profitable venture. Broadly, the level of gross profit margin depends directly on how a business is organized and the other costs it must support. For instance, after gross profit calculation, a cruise company still must pay operating expenses, financial, tax and other expenses. Subsequently, a cruise company must have robust net profits to distribute an attractive return (dividend) to shareholders. In case a cruise company can effectively control operating expenses, it can remain profitable with a lower gross margin ratio. Broadly, a higher gross profit margin is preferred, as it indicates efficient processes and offers flexibility to have money left over to spend on other business operations.

The net profit margin is calculated as the ratio of net profits to revenue. Net profit is calculated as the gross profit (revenue minus cost of goods sold) minus operating expenses, interest paid on debt, taxes and all other expenses. The net profit margin is a far more definitive profitability metric for investors and analysts and indicates how much of each dollar received as revenue translates to corporate profit. This is critical since revenue increases do not necessarily translate into increased profitability. A higher profit margin is desirable since it means the company generates more profits from its revenue. A careful assessment of both cruise company gross profit margin and net profit margin reveals managerial efficiency in earning profits relative to the costs involved in producing cruise services.

The operating profit margin, on the other hand, is calculated as Earnings Before Interest and Taxes (EBIT) to revenue. EBIT is revenue minus all operating costs, before interest paid, taxes and dividends. A highly variable EBIT can indicate a risky business, whereas a stable EBIT a well-managed and predictable one. Hence, the operating profit margin ratio indicates the net operating profitability and points to a successful management at generating income from the core business operations (per dollar of revenue), controlling costs effectively and/or increasing revenues faster than operating costs.

The profit margin ratios for all three sample cruise companies remain consistently high over 2016–2019 ( Table 12 ). The 2019 net profit margin for Royal Caribbean, for instance, at 17.4% indicates that, for $100 of revenue, $17.4 have remained as net profit in the company. The joint evaluation of gross, operating, and net profit margins for the leading cruise companies indicates a broadly stable, efficient, and successful financial management.

Cruise management financial efficiency.

GPM: Gross Profit Margin; OPM: Operating Profit Margin; NPM: Net Profit Margin.

When examining the per day figures, cruise revenue and profits per day are seen at $51.7 mln. and $8.6 mln., for Carnival; $ 26.0 mln. and $5.0 mln., for Royal Caribbean; and $16.6 mln. and $2.6 mln., for Norwegian, respectively, for 2018. Average cruise revenue and expense per passenger are estimated at $1791 and $1562, respectively. This corresponds to a profit at $227 per passenger, forming a net profit margin at 12.7%. A breakdown of the estimated average cruise revenue and expense per passenger is summarized in Table 13 .

Average cruise revenue and expense breakdown per passenger.

2018 figures; financial breakdown of typical cruiser worldwide (across all cruise lines). Average cruise duration: 8.0 days; median duration: 7.0 days.

Source: Carnival Corporation & Plc., Royal Caribbean Cruises, Norwegian Cruise Lines, Thomson/First Call, Cruise Lines International Association (CLIA), Florida Caribbean Cruise Association (FCCA), DVB Bank, Cruise Pulse; www.cruisemarketwatch.com .

5.3. Managerial efficiency ratios

A set of critical and widely employed diagnostics tools to evaluate managerial efficiency on cruise company financial performance include the Return on Equity (ROE), Return of Assets (ROA) and Return on Invested Capital (ROIC) ratios. These metrics permit comparative performance evaluation of each sample cruise company over time as well as against its competitors. They can also reveal critical drivers of growth and provide explanation for the stock market behavior of the cruise companies' share trading patterns at higher/lower valuation levels.

ROE is defined as net income to equity and indicates the equity required to generate a certain amount of net income; or, how well the company is using equity (owners' capital). ROA is calculated as net income to assets and indicates the assets required to generate a certain amount of net income; or how effectively the management utilizes the company's fixed and current assets (how dependent it is on them). ROIC is defined as EBIT (earnings before interest and tax) to total invested capital (equity plus debt) and indicates the operational profit generated by the total capital employed in the company; or, how efficiently the company allocates all its capital to profitable investments; or, how much capital is required to grow its business. ROE attracts investors' attention as it a critical indicator of how effectively a company's management uses shareholders' capital and reveals whether management is growing the company's value at an attractive and competitive rate. ROE, ROA and ROIC ratios are calculated as in the forms below ( Table 14 ).

ROE – ROA – ROIC ratios.

ROE: Return on Equity; ROA: Return on Assets; ROIC: Return of Invested Capital.

EAT = Earnings After Tax (Net Income); EBIT = Earnings Before Interest and Taxes (Operating Profit); Invested Capital = Equity + Debt.

A key factor distinguishing ROE and ROA is financial leverage or debt, since the fundamental balance sheet equation holds that assets equal equity plus debt. Plausibly, in case a company carries no debt, its equity and total assets will be the same, hence, ROE and ROA would also be the same. However, if that company takes on financial leverage, ROE will rise above ROA; this relates to the balance sheet equation, since equity equals assets minus liabilities. Thus, by taking on debt, a company increases its assets, due to the cash that comes in. But since equity equals assets minus debt, a company decreases its equity by increasing debt. In other words, when debt increases, equity shrinks; since equity is ROE's denominator, then ROE, in turn, gets a boost. At the same time, when a company takes on debt, total assets (ROA denominator) increase; hence, debt amplifies ROE in relation to ROA. ROE, however, weights net income only against owners' equity and does not provide any feedback on how well the management uses funding from borrowing and issuing bonds. If ROA is sound and debt levels are reasonable, a strong ROE is a solid signal that management is efficient at generating returns from shareholders' capital. On the other hand, if ROA is low or the company bears a heavy debt, a high ROE may be misleading as to the company's growth prospects.

ROIC overcomes certain ROE and ROA limitations and is a better measure of profitability than ROA and ROE, as it removes the debt related distortion that can make highly leveraged companies look highly profitable when using ROE. Unlike ROE and ROA that incorporate net income, ROIC is based on EBIT (earnings before interest expenses and taxes), arguably a critical operating profitability indicator that takes total invested capital into account. This can offer a closer focus on the core operating performance, removing financing decision effects (that is, regardless of the capital source, equity, or debt).

The joint evaluation of ROE ROA and ROIC ratios for the leading cruise companies indicates a persistently robust financial performance and efficient use of each company's equity, debt, and assets in all cases ( Table 15 ). ROE ratios run from 12.1% (Carnival) to 14.9% (Norwegian) to 16.0% (Royal Caribbean), respectively, reflecting a satisfactory return on shareholders' equity. Carnival is seen to attain the best performance of its assets (ROA: 6.7%), with the other cruise companies following closely (Royal Caribbean: 6.3%; Norwegian: 5.8%). ROIC ratios are seen also to be very close for all three cruise companies (Carnival: 9.6%, Royal Caribbean: 10%, Norwegian: 9.8%), indicating a solid operational performance with efficient use of shareholder and debtholder capital, and supporting robust growth dynamics and value creation.

WACC: Weighted Average Cost of Capital. Year: 2019. Source: Bloomberg database.

5.4. ROIC versus WACC: Growth and value dynamics

When comparing a company's return on invested capital (ROIC) against its cost of capital (WACC), ROIC should stand higher than WACC to support robust growth prospects, value creation and share price trading at a premium. ROIC also can be used as a benchmark to compare a firm's value against competitors. A common market benchmark spread in support of value creation is a ROIC higher than WACC by at least +2%. A ROIC lower that WACC (or a spread of less than 2%) is considered as a value destroying condition. Some companies run at a zero-return level, and, while they may not be destroying value, they have no excess capital to invest in future growth ( Koller, Goedhart, & Wessels, 2020 ). The cruise companies under evaluation exhibit a ROIC higher than WACC in all cases. However, the ROIC-WACC spread is seen lower than 2% in all sample cruise cases, raising concerns about their solid growth prospects and value creation potential.

The ROIC ratio can be adjusted on a per unit basis to be equivalently recalculated as:

This implies that superior ROIC ratios can be attained from either a) a ‘price premium’ relative to peers; b) a lower ‘cost of capital’ per unit, improving cost and capital efficiency; or, c) a combination of both, a) and b). A company can create value by investing its capital into profitable investment projects to attain attractive ROICs. Robust revenue growth rates, ROIC higher than WACC and operating cash flows are core drivers to corporate value creation.

In the longer-term, a company can sustain strong revenue growth and high ROIC only in case it possesses and preserves a well-defined ‘competitive advantage’ against its peers. However, as competition erodes ROICs and competitive advantages, management should consistently seek new sources of competitive advantage to create sustainable value. Empirical evidence indicates that, of alternative growth models to value creation, launching new products or services typically creates more value for shareholders ( Koller et al., 2020 ). In this context, a challenging strategic option for cruise companies remains as to how effectively they can respond towards their competitive advantages, by developing, for instance, alternative diversified bundles of cruise products and services to contain intensified global competition.

5.5. Financial leverage – Solvency

Cruise companies, in line with commercial shipping counterparts, have typically relied mainly on debt (bank lending and bond issuing) to finance their capital-intensive investment projects ( Syriopoulos, 2007 , Syriopoulos, 2010 ). The financial leverage, or debt-to-equity ratio (or debt ratio), is a widely used financial debt burden metric that compares a company's total debt (creditors' financing) to shareholder equity (owners' financing). Based on that, management and investors can evaluate debt contribution into invested capital, signal equity or asset adequacy to fulfill obligations to creditors (particularly under distress conditions), and assess the borrower's credit risk profile.

A debt ratio of 0.5, for instance, means that there are half as many liabilities than there is equity. In other words, shareholder funding is twice as high as creditors funding, implying shareholders and creditors own 66.6% and 33.3% of company assets, respectively. A lower debt-to-equity ratio usually implies a more financially stable business. On the other hand, a high debt-to-equity ratio indicates an aggressively debt-financed business. Companies with a higher debt component must repay their credit obligations to lenders (debt servicing with regular interest payments); hence, debt financing can turn more expensive than equity financing. Highly leveraged companies, furthermore, may run at risk of being unable to adequately service a high debt exposure. As a result, prospective investors may assume a higher risk exposure, refraining from investing their funds on this company. At the same time, financial leverage should not decline excessively, as companies raising equity (by issuing stock) are exposed to high stock market volatility and ownership dilution implications.

Financial leverage contributes to a better understanding of the debt impact on the overall cruise company profitability and growth. It is important to investigate whether debt is high because it supports healthy business expansion and growth. This can eventually generate higher earnings than it would have without this debt financing. If leverage increases earnings by a greater amount than debt's cost (interest payment), then the business and its shareholders should expect to benefit by value creation. On the contrary, high leverage associated with a weak financial performance may result to additional debt financing, as shareholders should be reluctant to contribute additional equity financing. In this case, share prices and corporate value may decline.

The interest coverage or times interest earned (TIE) ratio is another widely popular debt metric. It indicates how many times a company's annual debt obligations (interest and debt service expenses) are covered by the net operating income (income before interest and tax). It is a long-term solvency ratio, expressed in times, to assess a company's long-term solvency ability to pay its debt liabilities as they become due. TIE reveals also whether a prospective borrower can afford to take on any additional debt.

Higher TIE ratios are considered more favorable than lower ones. A TIE at 4.0, for instance, indicates that operating income is four times higher than yearly interest expense liabilities; hence, the company can comfortably meet its debt obligations. On the contrary, a TIE less than 1.0 reflects a company that cannot meet its interest obligations on its debt. Companies with weak TIE ratios may face difficulties in raising funds for their operations. A better TIE ratio implies the company has enough cash after paying its debt to continue investing in the business. However, management should be careful to avoid a very high TIE ratio in case this is due to an unnecessarily conservative stance towards debt and/or absence of policies to take full advantages of debt facilities. Plausibly, a company's capital structure mix has a critical direct impact on TIE ratio.

The leading cruise companies are seen to follow a careful approach towards debt financing and to maintain robust solvency positions over 2016–2019 ( Table 16 ). Carnival exhibits a consistently attractive and stable debt-to-equity ratio, at 0.78 in 2019. This is obviously in line with the higher equity component apparent in its capital structure mix. The same holds for Carnival's solvency position, displaying a comfortable operating profitability position to meet its interest payment obligations, with TIE ratio at 14.4 in 2019. Royal Caribbean and Norwegian are exposed to higher debt financing with a debt-to-equity ratio at 1.49 and 1.57, respectively in 2019. Whereas TIE ratios for Royal Caribbean and Norwegian are well above 1.0, at 5.3 and 4.3, respectively in 2019, these ratios still lag considerably behind Carnival. Broadly, the debt-to-equity and TIE ratios of leading cruise companies reflect balanced financing strategies with manageable debt exposures and adequate solvency positions. This comes in contrast to the typically heavily indebted commercial shipping companies ( Syriopoulos, 2007 , Syriopoulos, 2010 ).

Financial leverage – solvency ratios.

5.6. Earnings per share ratios

Earnings per share (eps) growth is an important financial indicator to measure managerial performance as it reflects a company's growth prospect dynamics. If revenue shows how much money is flowing into the company, eps depicts how much of that money is flowing down to shareholders, as profits per every outstanding share of stock. In other words, eps shows the net earnings contribution generated per share to shareholders, not simply because of changes in earnings but also after accounting for the effects of issuance of new shares. This may be particularly important in case the growth comes because of acquisitions, a strategic path of growth preferred by several cruise companies over the last decades.

A comparison of eps growth for major cruise companies, over 2016–2019, reveals that Norwegian has attained the best performance (eps growth: 56%), and Royal Caribbean follows closely (eps growth: 50%), whereas Carnival is lagging behind at a distance (eps growth: 12%). Broadly, the leading cruise companies exhibit robust profitability and promising growth prospects, rendering cruise company shares a broadly challenging investment choice ( Table 17 ).

Cruise company eps ratios.

6. Managerial implications and conclusion

6.1. a note on the covid-19 impact.

As this study was about to close, the World Health Organization (WHO) declared the COVID-19 outbreak as a global pandemic on March 11, 2020. Most countries around the world introduced restrictions to international travel and imposed bans on non-essential travel to contain the virus spread. To that end, recent UNWTO estimates indicate that the near-complete global lockdown has abruptly halted economic growth, exerting an unprecedented impact on most business sectors, and especially on the travel, tourism, and cruise industries. In fact, these dramatic circumstances resulted eventually to the cruise ship business shutting, inevitably, entirely down. Current forecasts estimate the total industry revenues for 2020 to be 35% lower than in 2019 (from $685 bln. in 2019 down to $447 bln. for 2020; UNWTO, 2020 ; Richter, 2020 ). This translates into a fall of 300 mln. tourists and $320 bln. losses in international tourism receipts, more than three times the losses during the 2008 global financial crisis.

With a focus on the global cruise business, the virus spread led many countries to close their borders, resulting to thousands of cruise passengers kept at sea and vessels seeking a port to dock. Canada, for instance, banned all ships with more than 500 people from docking in its ports (mid-March). Australia, New Zealand, and the US banned all ships arriving from foreign ports and directed all foreign flagged ships to leave the country. Cruise passengers and crew members were quarantined on board and cruise liners had to struggle hard to attain delayed repatriation ( Giese, 2020 ; Ito, Hanaoka, & Kawasaki, 2020 ; Moussali & Tsekoura, 2020 ).

The following points highlight a set of critical implications for the cruise industry due to the coronavirus pandemic ( Giese, 2020 ; Research and Markets, 2020 ):

- most operators have had to suspend all voyages and others have cancelled most cruises;

- cruise companies have experienced detrimental financial implications, in terms of revenue and profits and at the same time of upward additional costs (for instance, costs associated with substantial refunds for cancellations, costs associated with docking ships at ports where ships were quarantined, costs of maintenance even when not sailing for utilizing cruise ship engines to provide power to maintain onboard services, air conditioning, desalination and propulsion);

- the defensive reaction to coronavirus spread has exerted domino effects and provoked far reaching implications for many cruise-linked companies, and cruise destinations, as many small island nations and other local economies rely heavily on the jobs, income cashflows and value chain effects generated by cruise ships and related business; for instance, the cruise industry is estimated to contribute about $2.0 bln. to the Caribbean each year; this results in a 5.9% contribution to some nations' entire GDP, as is the case with St. Kitts and Nevis ( Ship Technology, 2020 );

- it is highly doubtful whether the cruise companies will remain in a position to sustain their robust financial performance, as discussed in the previous sections; liquidity constraints are expected to eventually drug cruise companies into additional debt (with global investors' stock market sentiment remaining low); hence, further deterioration in their funding costs is anticipated ( McKinsey, 2020a ; Syriopoulos & Bakos, 2019 );

- to elaborate the deterioration in financial terms and capital costs, Carnival Cruise Line, the world's largest cruise operator, has lost its investment-grade status in June 2020, after S&P downgraded its rating at BB- (dropped from BBB-); S&P analysts perceive a ‘high level of uncertainty’ for the cruise operator's return to normal services and its ultimate recovery path; furthermore, the firm's credit measures are expected to ‘remain very weak through 2021 because of its plans for a gradual reintroduction of capacity’; the weak demand may eventually force Carnival to speed up removal of older ships and delay new ship deliveries ( Nagarajan, 2020 );

- in sum, the cruise industry faces a long struggle to ensure its survival as a widespread sentiment of concern, uncertainty, and instability has prevailed in the sector ( McKinsey, 2020b );

- these adverse circumstances are vividly reflected on the abrupt share price and market value decline of leading listed cruise companies ( Fig. 4 ).

Fig. 4

Cruise share returns (%) – Post COVID-19 impact.

The detrimental COVID-19 financial implications for cruise revenue, profits and the gloomy business prospects (risk of closure for several cruise companies) are underlined indeed by the highly volatile and dramatic collapse of share prices for the largest listed cruise groups (even by −130% on average in few days; Fig. 4 ). Indicatively, Carnival, Royal Caribbean and Norwegian cruise share prices declined sharply at $7.97, $24.36, and $8.40, respectively, as the virus burst (April 2), recording losses by 70–80% from the beginning of the year (share prices at $51.31, $134.65, and $58.83, respectively, on January 2). Cruise share prices, nevertheless, rebounded impressively recently, returning up at $14.33, $50.83, and $14.22, respectively (July 28), partly mitigating the earlier heavy losses.

6.2. Key managerial implications and recommendations

This study has undertaken a concise, focused, and updated financial performance evaluation of the cruise sector, based on a sample of leading cruise players. Surprisingly, to the authors' best knowledge, relevant studies remain extremely thin on this topic. This paper intends to partially fill this research gap and to offer a set of innovative contributions and managerial recommendations. Cruise companies have shown a consistently dynamic growth performance over recent years, rebounding impressively after the 2008 financial crisis impact. Cruise revenue and profitability are seen on a solid upward trend, diverging from commercial shipping companies. Critical financial performance indicators, such a ROE, ROA and ROIC ratios, are consistently high, reflecting efficient managerial investing, operating, and financing decisions. The leading cruise companies have ambitious and highly capital-intensive investment plans under development, with active newbuilding orderbooks for vessels of larger carrying capacity, expensive technological advances, and modern facilities to cater for diversified cruise passenger needs, complying at the same time with strict environmental conditions. As major international banks are seen to exit ship lending, a critical question remains as of potential alternative capital sources to finance these investments, assuming that cruise vessel construction costs typically range from $0.5 bln. to over $1.5 bln. The capital structure of the leading cruise companies demonstrates a balanced and healthy debt-equity mix, with dept-to-equity ratios and solvency ratios performing impressively.

The global pandemic has hit the cruise sector severely with destabilizing effects to many corporate players as well as to cruise-related businesses even at risk of fatal default. These fragile financial circumstances generate a set of critical managerial implications, recommendations, and potential actions for the cruise companies under pressure to support their business overcome the virus crisis, including the following:

- robust cash liquidity positions supported by the earlier impressive profitability are to benefit the most prudent, well prepared, and forward-looking cruise companies;

- in fact, heavy pressure on cruise revenue and profits is already apparent, as cruise cancellations, customer refunds, additional operational costs and widespread uncertainty have been escalating;

- cruise managers must inevitably proceed towards an extensive reassessment of their investment, financing, and operating plans with a view to curtail the earlier ambitious projects for larger costly newbuild cruise vessels;

- as the pandemic implications affect nearly all business sectors and liquidity turns scarce and expensive, financing strategies have to be redesigned, conveniently tailored under these adverse circumstances;

- the relatively attractive cruise company WACCs, estimated earlier in this study, are hard to maintain further, as funding is turning more expensive, typically in favor of the largest and best reputed players;

- the optimal capital structure mix remains of critical concern, as different capital sources bear different funding costs, diversified among competing cruise companies;

- as a result, the earlier robust and promising financial performance of the cruise companies, as depicted by the ROE, ROA, ROIC, WACC ratios, leverage exposure, solvency, earning per share and stock market performance, is highly unlikely to remain unaffected under the prevailing gloomy market circumstances;

- a vital short-term goal for cruise business is undoubtedly survival; this comes at a severe cost, as government intervention and extensive lending is seen to become imperative to keep cruise companies afloat;

- long term objectives of cruise companies should include the restoration of the disastrous reputational damage that has been caused by the virus effects on the broader cruise business.

Having said that, cruise business has in fact faced hard times and global crises in the past but managed to recover convincingly, demonstrating tough resilience, adaptability, and flexibility. This virus crisis, however, appears to be quite different. The critical question remains as to when the cruise industry is going to return into business operations again ( Calder, 2020 ). Unfortunately, there is no clear answer to that yet, as there are many uncertainties to make rational forecasts for the entire 2020. Fears are that this crisis will affect cruise revenues for a long time, particularly in the Asian region, as this is a dynamic market of growing importance for the cruise industry in recent years ( Moussali & Tsekoura, 2020 ; OMR Global, 2020 ). Obviously, these adverse implications are anticipated to have a tremendous financial impact on all cruise players, inducing downward adjustments in investment, financing, and profitability projections. However, it is for small cruise players that the implications are expected to be even more painful, forcing inevitably several of them to exit the market or to be taken over.

According to a recent KPMG report ( Giese, 2020 ), a set of direct responsive actions is under play by the cruise industry to keep future business intact, including bonus credit offers (110–125% of booking amount) instead of cash refunds, as an option to cruise passengers whose trips have been cancelled due to the pandemic, providing flexibility for future bookings. Based on recent UBS bank estimates ( Panetta, 2020 ), around 76% of the passengers whose cruises were cancelled due to pandemic have opted for a credit for future trips instead of a refund. Furthermore, based on a recent CLIA survey, 82% of cruisers indicate their interest in booking a cruise for their next vacation. Despite multiple outbreaks of COVID-19 and uncertainty over when sailing will reconvene, several reports record increased bookings for 2021 in comparison to 2019. This reflects a persisting interest of cruise passengers in continuing pursuing cruise travel and tourism services in the future, though it may be harder to convince first-time cruisers ( Giese, 2020 ; Panetta, 2020 ). At the same time, as most countries continue to fight against COVID-19 effects, the virus impact is anticipated to challenge the business model of several industries ( McKinsey, 2020c ). For the time being, there does not seem to be a clear timeline for the restart of cruise operations. To gain customer support after travel restrictions will have been lifted, companies consider promotion campaigns at reduced cruise package prices for 2021, to compete and revitalize cruise demand. In any case, the assessment of the post-COVID-19 impact on the global cruise business can be more accurately evaluated after the pandemic is over. This could well lead to a challenging follow-up empirical study.

Appendix A. 

Source: Authors ‘compilation; www.cruiseindustrynews.com ( Cruiseindustrynews, 2020 ). A summary version is presented in Table 7 .

Author's statement

The authors confirm that their paper entitled ‘The Global Cruise Industry: Financial Performance Evaluation’ (RTMB-D-20-00143R1_R2) is the output of original research and it has not been published elsewhere, nor is it currently under consideration for publication elsewhere.

To the authors' view this manuscript is appropriate for publication in the Research in Transportation Business and Management – Special Issue on Cruise Shipping, Ports and Destinations (Cartagena 2020 Conference) because it covers an unresearched topic and contributes innovative empirical findings and useful policy recommendations.

Declaration of Competing Interest

The authors have no conflicts of interest to disclose.

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Cruise in 2022: the state of the industry 

Using the latest thematic insights from GlobalData, Peter Nilson looks at the state of the cruise industry.

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At the beginning of the year, many companies, governments, and travel authorities had predicted a stronger recovery for the cruise market in 2021. Unfortunately, that was not the case.

The pandemic has proven unpredictable, with many cruise destinations going into second and third lockdowns during 2021 after a global surge in Covid-19 cases .

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While the cruise industry has experienced a 96% Year-on-Year (YoY) increase of passengers, reaching 13.9 million, it still does not compare to the pre-pandemic levels of 2019, where there were 29.7 million passengers globally. It has been an even worse year for travel intermediaries specializing in cruise holidays.

These companies are the primary selling points for cruise trips and are often responsible for selling upgrades, premium drinks packages and excursions. Global spending across 60 major cruise markets increased by 65% YoY, resulting in total revenues of $19.4bn. Nevertheless, this was still far from pre-pandemic levels in 2019, which were approximately $29.8bn, 35% higher than 2021’s figure.

To reduce costs, many ships were retired between 2019 and 2021. Cruise ships are the most expensive assets, making this practice a necessity for many firms to stay afloat.

However, more optimistic times lie ahead for the sector. During the pandemic, the cruise industry has witnessed new innovative cruise ships and a brand-new competitor in the form of Virgin Voyages . Many cruise liners have come good with orders for new cruise ships built before the pandemic, resulting in an exciting time for loyal cruise holidaymakers to try new ships, services, and onboard experiences.

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Global cruise passengers and revenue

2021 provided a tough lesson for the cruise industry, with businesses aiming to make a swifter recovery from the latest round of lockdowns.

The cruise industry’s recovery rate was modest in 2021. Although a 96% YoY increase sounds positive, it is still nowhere near pre-pandemic levels. In 2021, only 13.9 million passengers went on a cruise, 53% lower than the pre-pandemic levels of 2019.

With the fluctuations of global passengers, revenues will generally follow a similar pattern unless there is a substantial shift in consumer behaviour. Usually, the most significant impacts on a travel company’s revenues, aside from passenger flows, are an economic recession, foreign exchange, or a change in booking trends.

During the pandemic, it has become clear that the latter affected cruise intermediary revenues. In 2021, revenue generated for cruises from intermediaries reached $19.5bn, a 65% YoY increase from $11.8bn. However, cruise passenger flows increased by 95% YoY, which is a significantly higher rate of improvement.

According to the CEO of the Royal Caribbean Group, Richard Fain, this was not unexpected. The world’s fourth-largest cruise company has seen intermediaries such as online travel agencies (OTAs) and high street agencies lose a proportion of their market share, with customers opting to book directly with the cruise operator rather than a third party.

cruise industry management

The same sentiment was echoed by Norwegian Cruise Lines CEO Frank Del Rio, who said the company had witnessed a similar booking pattern. The result is not surprising. Many agencies have had to cut back on their workforce due to poor revenue performance in 2020, resulting in fewer sales agents to capture the rising demand in 2021. This has led to more customers booking directly with cruise companies.

Research from GlobalData also supports this, when comparing two consumer surveys from 2019 and 2021. In 2019, 44% of respondents said they typically book via an OTA. However, in a Q4 2021 survey, only 24% of respondents said they booked their last holiday via this booking method. In addition, respondents who said they booked directly increased from 32% to 36%.

New cruise ships and trends for 2022

There are many new cruise ships scheduled to set sail in 2022. Many of these boast a more contemporary feel to their décor and interior, moving away from the traditional looks of the past cruise ships and moving to a more fashionable boutique hotel design.

The motivation for this stems from the fact that cruise operators need to attract a younger market. This evolution is necessary for making cruise businesses more resilient in the future by drawing the next generation of cruise tourists.

According to a 2020 GlobalData survey, 37% of Gen Z and Millennials said that they ‘strongly’ or ‘slightly’ agreed with the notion that they would book an international trip this year. In comparison, only 22% of those older than 35 responded with the same sentiment, highlighting that the younger generation may be more likely to travel in today’s travel climate.

Furthermore, cruising has also become more popular with younger adults. In GlobalData’s Q3 2019 and 2021 global consumer surveys, the percentage of Gen Z and Millennial respondents who typically take a cruise holiday increased from 17% to 21%, indicating changes in consumer tastes.

The importance of Covid-19 safety protocols on cruise ships has never been more critical. According to GlobalData, there is a demand from consumers to receive information about Covid-19 initiatives. This data shows that consumers need substantial levels of communication from cruise providers, and that cruise companies will need to develop robust communication strategies, which need to be scaled over the next few years.

Many travellers are opting to book directly with the operator rather than via an intermediary such as an OTA. According to a Q3 2019 GlobalData survey, 44% of consumers said they typically book via an OTA.

However, this has fallen substantially over the last two years. In a Q4 2021 survey, only 24% of respondents said they booked their previous holiday via an OTA.

In addition, respondents who said they booked directly with a travel supplier increased from 32% to 36%, showing that booking directly with the supplier is becoming more trustworthy and popular.

Nevertheless, this booking behaviour could well be a temporary result, with some cruise operators expecting intermediary trade to pick up again in 2022.

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The Cruise Industry Stages a Comeback

After watching thousands of passengers get ill and more than a year of devastating financial losses, the global cruise industry is coming back to life. And it says it knows how to deal with the coronavirus.

cruise industry management

By Ceylan Yeginsu and Niraj Chokshi

Nothing quite demonstrated the horrors of the coronavirus contagion in the early stages of the pandemic like the major outbreaks onboard cruise ships , when vacation selfies and videos abruptly turned into grim journals of endless days spent confined to cabins as the virus raged through the behemoth vessels, eventually infecting thousands of people, and killing more than 100.

Passengers on the Diamond Princess and Grand Princess, two of the worst-hit ships, were forced to quarantine inside their small staterooms — some without windows — as infections on board spiraled out of control. Every day anxiety and fear mounted as the captains of the ships announced new cases, which continued to spread rapidly through ventilation systems and among crew members, who slept in shared quarters and worked tirelessly throughout the day to deliver food to guests.

At the time, it was difficult to imagine how the ships, which carry millions of passengers around the world each year, would be able to sail safely again. Even after the vaccination rollout gained momentum in the United States in April, allowing most travel sectors to restart operations, cruise ships remained docked in ports, costing the industry billions of dollars in losses each month.

Together, Carnival , the world’s largest cruise company, and the two other biggest cruise operators, Royal Caribbean and Norwegian Cruise Line , lost nearly $900 million each month during the pandemic, according to Moody’s, the credit rating agency. The industry carried 80 percent fewer passengers last year compared to 2019, according to the Cruise Lines International Association, a trade group. Third-quarter revenues for Carnival showed a year-to-year decline of 99.5 percent — to $31 million in 2020, down from $6.5 billion in 2019.

And yet in June, Richard D. Fain, chairman and chief executive of Royal Caribbean Cruises, was beaming with excitement as he sat sipping his morning coffee onboard Celebrity Edge, which became the first major cruise ship to restart U.S. operations, with a sailing out of Fort Lauderdale, Fla. “At the beginning we didn’t have testing capabilities, treatments, vaccines or a real understanding of how the virus spread, so we were forced to shut down because we didn’t know how to prevent it,” he said.

Several epidemiologists questioned whether cruise ships, with their high capacities, close quarters and forced physical proximity, could restart during the pandemic, or whether they would be able to win back the trust of travelers traumatized from the initial outbreaks.

Now, said Mr. Fain, the opposite has proved true. “The ship environment is no longer a disadvantage, it’s an advantage because unlike anywhere else, we are able to control our environment, which eliminates the risks of a big outbreak.”

Cruise companies restarted operations in Europe and Asia late last year, and, after months of preparations to meet stringent health and safety guidelines set by the Centers for Disease Control and Prevention, cruise lines have started to welcome back passengers for U.S. sailings, where demand is outweighing supply, with many itineraries fully booked throughout the summer.

Carnival said bookings for upcoming cruises soared by 45 percent during March, April and May as compared to the three previous months, while Royal Caribbean recently announced that all sailings from Florida in July and August are fully booked.

Several coronavirus cases have been identified on cruise ships since U.S. operations restarted in June, including six passengers who tested positive on Royal Caribbean’s Adventure of the Seas recently, testing the cruise lines’ new Covid-19 protocols, which include isolating, contact tracing and testing passengers to prevent the virus from spreading. Most ships were able to complete their itineraries without issues, but American Cruise Lines, a small ship company, cut short an Alaska sailing earlier this month after three people tested positive for the virus.

The industry’s turnaround is far from guaranteed. The highly contagious Delta variant, which is causing surges of the virus around the world, could stymie the industry’s recovery, especially if large outbreaks occur on board. But analysts are generally optimistic about its prospects and the potential for passenger numbers to recover to prepandemic levels, perhaps as soon as next year. That optimism is fueled by what may be the industry’s best asset: an unshakably loyal customer base.

Even during the pandemic, huge numbers of people who had booked opted against taking refunds , instead converting payments already made into credit for future travel, which the companies often offered at a higher value as an incentive. Last fall, Carnival reported that about 45 percent of customers with canceled trips had opted for credit instead of cash back. About half of customers in a similar position with Royal Caribbean Cruises did the same by the end of last year, the company said at the time.

“The demand is there,” said Jaime Katz, an analyst with Morningstar. “You know that there have been 15 months of people who have had cruises booked that have been canceled.”

No U.S. bailout for the cruise companies

By April 2020, the industry was in crisis. Cruises were halted around the world after the alarming outbreaks on ships, leading to sailing bans from the C.D.C. and other global authorities.

While they employ many Americans, the major cruise companies are all incorporated abroad and were ultimately left out of the $2 trillion federal stimulus known as the CARES Act, with lawmakers chafing at the prospect of bailing out foreign corporations largely exempt from income taxes. Environmentalists lobbied against the aid, citing the industry’s poor track record on climate issues. And criticism over how the companies handled early virus outbreaks on board ships sapped any remaining political will to help. Huge losses mounted as questions swirled about whether cruise lines could avoid bankruptcy.

“All our conversations here were, ‘At this cash burn rate for each of these companies, how long can they survive?’” said Pete Trombetta, an analyst focused on lodging and cruises at Moody’s.

Cruise lines were forced to send most cruise workers home, keeping small skeleton crews on board to maintain their ships. After months without work or an income, many of the workers, who are frequently drawn from countries like the Philippines, Bangladesh and India, fell into debt and struggled to provide for their families.

The timing couldn’t have been worse for Virgin Voyages , the new cruise company founded by the British billionaire Richard Branson, which had planned to launch its inaugural ship, Scarlet Lady, with a sailing from Miami in March 2020. The ship’s official U.S. debut has been delayed until October, but a series of short sailings will take place in August out of Portsmouth, England, for British residents.

“It’s been a very difficult 15 months and we had to make some very tough cuts along the way like the rest of the industry,” said Tom McAlpin, president and chief officer of Virgin Voyages.

In the end, most cruise companies made it through the pandemic intact, but only after receiving help. That came in the form of assistance from governments abroad or money raised from investors emboldened by efforts to backstop the economy from the Federal Reserve and others. The cash wasn’t cheap, though. When Carnival Corp. sold $4 billion in bonds in April 2020, it agreed to interest on those bonds of 11.5 percent — more than half of which it recently refinanced at a more reasonable rate of 4 percent.

Carnival, which operates under nine brands globally, has lost more than $13 billion since the pandemic began and said in a securities filing last month that it expects those losses to continue at least through August. The company amassed more than $9 billion in cash and short-term investments as of the end of May — enough, it said last month, to pay its obligations for at least another year. It says it expects to have at least 42 ships carrying passengers by the end of November, representing just over half of its global fleet.

The industry faces a long road back to normal. Moodys downgraded ratings for each of the big three cruise companies during the pandemic and says it will probably take until 2023 for the major cruise operators to start substantially reducing their debt, which had nearly doubled during the pandemic.

The companies have also been caught up in a series of legal battles in Florida, the biggest base of operations in the United States, that has them sometimes allied with the administration of Gov. Ron DeSantis, and sometimes opposing it.

In June, Florida sued the C.D.C., saying the agency’s guidelines for how cruising could restart were burdensome and harmed the multi-billion-dollar industry that provides about 159,000 jobs for the state. The C.D.C. guidelines require 98 percent of crew and 95 percent of passengers to be fully vaccinated before a cruise ship can set sail, otherwise the cruise company must carry out test voyages and wait for approval.

So far, the state has prevailed in the courts, with a ruling from a federal judge that prevented the C.D.C.’s vaccine requirements from going into effect after July 18. A federal appeals court upheld that ruling on July 23.

Despite the court’s decision, Cruise Lines International Association, the trade group, said cruise companies will continue to operate in accordance with the C.D.C. requirements. The cruise lines found the C.D.C.’s initial guidance too onerous, but once the agency made revisions to factor in the U.S. immunization program, the companies agreed to comply and said they preferred passengers to be vaccinated, because it simplifies the onboard experience.

As that suit was making its way through the courts, Norwegian filed suit on July 13 against the state of Florida, saying that a law banning business from requiring proof of immunization from people seeking to use their services prevented the company from “safely and soundly resuming passenger cruise operations.”

There has yet to be a ruling in the case.

Hurdles remain

Several other hurdles could also derail the rebound of the industry. While cruising has resumed, operators still have to contend with a patchwork of domestic and international rules, some of which impose strict conditions on passengers who go on shore excursions. A serious and widespread outbreak aboard a ship, or a broader communitywide surge in virus infections, could drive away potential customers and stall the momentum of the cruise comeback.

But despite the delays and potential for further disruptions, Virgin Voyages is hopeful for a successful launch of its new brand. Virgin’s Scarlet Lady adult-only ship, which was inspired by a superyacht design, aims to attract a hip and younger crowd, offering 20 different buffet-free dining options and a range of entertainment, including D.J. sets and immersive experiences.

“We have a fantastic set of investors behind us, and I think we are well positioned to make a big comeback because people are ready to travel and cruise again and we are launching a very attractive new onboard product right in the middle of it all,” Mr. McAlpin said.

Two new cruise ships, Carnival’s Mardi Gras and Royal Caribbean’s Odyssey of the Seas are set to launch in the U.S. this week.

And cruise workers, many of whom burned through savings and went into debt during their enforced layoff, are thrilled to be back. “I can’t believe the day has come when I have been called back to work,” said Alvin Villorente, a wine steward for Norwegian Cruise Line, who spent the last year at home in the Philippines, carrying out odd jobs to pay his bills.

“It felt too good to be true,” he continued. “I made my wife read the email to make sure I understood correctly and when I saw her smile everything suddenly went from black to bright colors. I could look after my family again.”

At a time when airports are busy and chaotic and hotels and holiday rentals are expensive and booked up, cruise companies hope to appeal to people who wouldn’t normally consider a cruise vacation.

“I’m still on the fence about booking any travel because of the constantly changing rules around the world, but an adult-only cruise with some friends could be fun, especially if it meant not having to fly anywhere,” said Crystal Marks, a 37-year-old personal trainer from Miami who went on a cruise once as a child and has been looking at Virgin sailings for early next year after a friend sent her a promotional video.

“Yoga classes at sunrise, fitness throughout the day, city-style restaurants, spa treatments, it sounds pretty perfect to me,” she added with a laugh. “If everyone on board is vaccinated and tested regularly it’s probably one of the safer options for international travel.”

Follow New York Times Travel on Instagram , Twitter and Facebook . And sign up for our weekly Travel Dispatch newsletter to receive expert tips on traveling smarter and inspiration for your next vacation. Dreaming up a future getaway or just armchair traveling? Check out our 52 Places list for 2021 .

Ceylan Yeginsu is a London-based reporter. She joined The Times in 2013, and was previously a correspondent in Turkey covering politics, the migrant crisis, the Kurdish conflict, and the rise of Islamic State extremism in Syria and the region. More about Ceylan Yeginsu

Niraj Chokshi covers the business of transportation, with a focus on autonomous vehicles, airlines and logistics. More about Niraj Chokshi

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Global and local pricing strategies in the cruise industry

  • Research Article
  • Published: 09 July 2018
  • Volume 17 , pages 329–340, ( 2018 )

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  • Josep Mª Espinet Rius 1  

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The cruise industry has experienced steadily increasing growth in the recent years. The aim of this research is to identify the pricing strategies at global and local levels in the cruise industry. The methodology used is the analysis of some cruise websites, the creation of an extensive database in order to build a hedonic model that enables the identification of marketing strategies, and interviews with professionals of the sector. The results show that this industry takes advantage of technologies that allow cruise companies to develop advanced pricing strategies, especially those related to the type of cabins, the date of departure of the cruise, the number of days between the date of booking and departure, the number of nights, the antiquity and the size of the ship, and the port of departure.

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Introduction

The cruise industry is a dynamic segment of the tourism sector which is currently experiencing high growth (20.5% between 2011 and 2016 according to CLIA 2017 ); however, there are plenty of challenges to overcome in order to consolidate revenues, maximize profitability, and ensure customer loyalty (Papathanassis 2017 ). The cruise industry is one of the most advanced segments of the tourism industry in terms of its application of Revenue Management (onwards, RM) strategies. One of the reasons is that the cruise industry has invested in technological advances and in the use of Big Data. It is common to use a wide range of tactics and strategies in order to ensure that the ship is full when it sails (Lieberman 2012 ).

According to Maddah et al. ( 2010 ), the differences in RM strategies between cruise lines and other tourism activities, such as airlines and hotels, are: guest pricing; multiple capacity constraints; tangible distinction between cabin categories with limited pricing variation and demand substitution; leisure passengers with a high show-up rate; onboard spending; and wave booking period.

The aim of this paper is to identify the pricing strategies used in the cruise industry and compare these strategies depending on the port of departure in order to know if the sector only applies global strategies or also local ones.

Methodologically, this research was carried out in three stages. The first stage was the analysis of ship companies’ pricing strategies through their websites. The second was the creation of a database of cruise companies´ itineraries and prices of cruises departing from the main European port (Barcelona) and the main Asian ports (Beijing, Hong-Kong, Shanghai, Singapore, and Tokyo)—permitting the development of a Hedonic Price Model rarely used in cruising. Finally, in the third stage, some ship companies’ managers were interviewed to better understand their pricing strategies.

The cruise industry can be considered an oligopolistic market as three groups have 80% of passengers and 72% of net revenues. Carnival is the market leader—47% of passengers and 39% of net revenues—composed of nine companies, followed by Royal Caribbean—23% of passengers and 20% of net revenues—composed of three companies, and Norwegian—10% of passengers and 13% of net revenues—composed of three companies. Other companies have a 20% share of passengers and 28% of net revenues, the most dominant being MSC Cruises—7% of passengers and 7% of net revenues—( www.cruisemarketwatch.com ).

The rest of this paper includes an overview of the most relevant literature relating to RM  in cruising, followed by an exposition of the methodology used and an extensive discussion of the results obtained. Finally, a number of managerial suggestions are proposed in the closing remarks.

Literature review

The literature on RM and Pricing in cruising has been rare for many years and references are scarce (Sun et al. 2011a ). However, the interest in the cruise industry has been growing, and, relatively speaking, a large body of research has been published in the last 3 years (the reader can see a review of the articles published in Papathanassis and Beckmann 2011 ; Cusano et al. 2017 ; London et al. 2017 ). There may be various reasons for the scarcity of research, such as the difficulty in obtaining reliable and useful information, as this either involves the use of private data or spending a great deal of time building an applicable database. In a review of the main cruise research over the last 20 years, no pricing database was found, and the references to prices were more conceptual than empirical.

The aim of this section is to provide the reader with an overview of the existing research in order to contextualize this paper. Readers can find more exhaustive literature regarding pricing and RM strategies within the cruising sector in Coleman et al. ( 2003 ), Kwortnik ( 2006 ), Ji and Mazzarella ( 2007 ), Sun et al. ( 2011b ), Chua et al. ( 2015 ) and Espinet et al. ( 2018 ).

Unlike other tourist products such as airline tickets or hotel reservations, the final price paid by a cruise passenger is slightly different in that it includes boarding fees and tips that some companies display separately and that can adversely affect customer satisfaction (Lynn and Kwortnik 2015 ).

It has been widely documented that price is one of the main determinants of cruise demand (Petrick 2004a , b , 2005 ) and that the uses of discounts and more affordable prices have been attracting more price-sensitive consumers, and pricing is a source of some challenges and opportunities (Sun et al. 2011b ). Price can affect different phases of the buying process (Juan and Chen 2012 ), and if cruise vacationers perceive that the cruise fare is expensive, this perception might adversely affect the perceived value of their cruise holiday (Chua et al. 2015 ). Nevertheless, price is not the only factor (Smallman and Moore 2010 ) and may depend on several factors such as the class of ship (Li and Kwortnik 2016 ).

Price sensitivity is one of the most commonly analyzed areas of pricing, mainly as a result of cruise companies’ strategies of emphasizing discount prices that affect consumers’ decisions (Petrick 2004a , b , 2005 ). Segmenting cruise vacationers based on price sensitivity levels can help cruise lines identify specific needs (Chua et al. 2015 ) and, in fact, Chua et al . ( 2017 ) point out that repeat cruise customers had a significantly lower perception of price, experienced higher effective satisfaction and perceived value, and showed greater loyalty than first-time cruise travelers. Regarding the price sensibility of cruise passengers, Coleman et al. ( 2003 ) estimated the values at around − 2 or higher, and Langenfeld and Li ( 2008 ) estimated the elasticity of price-insensitive customers (− 1.2), and price-sensitive customers (− 5) who are tempted by discounts, such as senior citizens. Further research into the estimation of price elasticity among cruise passengers is recommended.

Cruise passenger willingness to pay is also analyzed. Neuts et al. ( 2016 ) and Chen et al . ( 2016 ) studied customer value in segmented cruise markets in Japan and Taiwan. Their results show that customer value increases in correlation with age, income and repeated experiences. Consequently willingness to pay increases among customers who have a previous positive experience of a cruise, and who have more free time, causing them to become more loyal customers. Mahadevan and Chang ( 2017 ) identify variables than influence customers’ decisions regarding cruises and their willingness to pay, through surveys undertaken in the state of Queensland in Australia in 2014. Results show that cruisers are willing to pay more for a cabin with a view, a greater variety of onboard activities, and more space to relax on deck, although there is a wide heterogeneity of individual preferences.

From the point of view of RM, several models have been proposed, mainly considering the forecast of demand (Ji and Mazzarella 2007 ; Maddah et al. 2010 ; Sun et al. 2011a ).

Cruise line income comes from the ticket price and also from the onboard revenues and commissions from agreements with stakeholders such as those providing restaurants, shops, airline companies, or shore excursions (Weaver 2005 ; Vogel 2011 ). Chua et al. ( 2015 ) highlight the fact that cruise companies focus their marketing strategies on ensuring high occupancy rates and generating onboard revenues which can be explained by the fact that as cruise lines are businesses with high fixed costs. Such strategies include offering lower prices in order to sell-out all their cabins (Toh et al. 2005 ).

According to the information obtained from www.cruisemarketwatch.com , retrieved 03.03.2018, the estimated average cruise revenue per passenger for all cruise lines worldwide in 2018 is 1791 USD, divided into ticket price—1293 USD—and onboard spending—498 USD. As a result, the ticket represents 72.2% of revenues and onboard spending 27.8%. The most onboard spending is done at the casinos and bars (273 USD), followed by shore excursions (100 USD), SPA (50 USD), and all other onboard spending (75 USD). The total estimated costs are 1564 USD resulting in a profit per passenger before taxes of 227 USD (12.7% from the total revenues).

Database, methodology and model

This research is supported by three types of sources. First of all, an analysis of the ship companies’ pricing strategies through their websites and brochures was undertaken, the next step was the creation of an extensive database of ship companies and their prices, and finally a number of managers and employees working within the commercial departments of cruising companies were interviewed.

The information obtained facilitates the building of a model that sheds light on the RM and pricing strategies.

Ship companies’ selected

The analysis of the cruise companies’ pricing strategies was conducted in 28 companies that represented 96% of passengers in 2017, which can be considered an extensive sample. Table  1 shows the cruise companies analyzed. Information was obtained from an in-depth analysis of the cruise companies’ websites and their brochures—both printed and digital—.

To quantitatively analyze pricing strategies, an extensive database was created using pricing information gathered in 2017 and in 2018 from the website www.vacationstogo.com , an important American travel agency that offers all type of cruises and displays final prices. The information obtained from the website of Vacations to Go is the itinerary code, the cruise line, the name of the ship, the date of departure, the number of nights of the itinerary, the port of departure of the cruise, the port of ending of the cruise, the type of cabin, and the final price.

This database contains all the cruises offered by Vacations to Go departing in 2018 from Barcelona, which is the most important port in the Mediterranean. The data also includes Asian cruises that in 2018 depart from Beijing-Tianjin, Hong Kong, Shanghai, Singapore, Tokyo-Fukuoka and Tokyo-Yokohama, the most important turnaround ports in Asia. The companies analyzed include 87% of ship companies’ passengers, and a total of 6487 prices were collected (3707 departing from Barcelona and 2780 departing from Asian ports).

To enrich this research information about ships was obtained from Ward ( 2017 ) and includes the group to which the cruise line belongs, tonnage, year of construction and renewal, passenger capacity, crew, number of cabins, number of cabins with private balcony and the presence or absence of a casino or a library.

From this information, new indicators were defined such as the number of days between the booking and departure dates—which is an important indicator in RM policies (Espinet et al. 2018 ).

Methodologically, this research was completed by interviews with cruising providers such as cruise companies and distributors. These interviews were conducted between January and March 2018. This qualitative research permits the researcher to obtain better market knowledge and to contrast some of the results obtained from the models built.

The aim of creating a database was to build a model that aims to identify and to explain global and local RM strategies. This model was constructed under the hedonic pricing approach which considers the price as a set of attributes. In fact, Biehn ( 2006 , p. 138) points out: “The cruise product can contain several attributes including the ship, destination, cabin category, deck, fare class, number of guests, trip extensions, shore excursions”. Formally,

where i  = 1, …, n represents the ship; and q ik ( k  = 1, …., m ) each of its attributes. All these have impact on cost and consequently in prices so that the hedonic price function for each cruise is represented as

where the functional form of P is assumed to be constant in time and across ships, although the weight or contribution of each attribute may change (Espinet et al. 2003 ).

Hedonic methodology was initiated by Rosen ( 1974 ), and some theoretical advances are relevant, such as Halvorsen and Pollakowski ( 1981 ) and Cassel and Mendelsohn ( 1985 ). This approach has been widely applied in tourism (Coenders and Espinet 2003 ; Espinet et al. 2003 ; Fluvià et al. 2005 ; Falk 2008 ; García-Pozo et al. 2011 ; Rigall-I-Torrent and Fluvià 2011 ; Alegre et al. 2013 , Saló et al. 2014 ),  but not in the cruise segment where there are hardly developments (Espinet et al. 2016 , 2018 ; Niavis and Tsiotas 2018 ).

This paper considers the methodology and the variables used in Espinet et al. ( 2018 ) to build a similar model but referring to other destinations such as Barcelona and Asia, in 2018. These variables have some differences with regard to the model built by Niavis and Tsiotas ( 2018 ) who split it into transport—sailing speed and a composite network variable referring to the itineraries closeness—and ship characteristics and attributes—onboard amenities, service quality, trip duration, and itinerary attractiveness—.

The model constructed is a regression in a semilogarithmic specification:

where P is the price, x n are each of the n variables incorporated in the model, β n are each of the parameters that indicate the effect on the price, and ε j is the standard error of the regression. In quantitative variables, β n  × 100 is interpreted as the percentage change in the price when x n changes by one per cent. For qualitative variables expressed in dummy values, the value \((e^{{\beta_{\text{n}} }} - 1)\) is calculated as the percentage effect on the price of the category to which the variable x n refers in the reference category.

The variables considered in the model are the port of departure and the most representative variables according to the results of Espinet et al. ( 2018 ) (Table 2 ) and were included after verifying the assumptions of the linear regression (linearity, multicollinearity and homoscedasticity). The price considered as a dependent variable is the final price paid by the cruise passengers including taxes that can change at any time according to the current common cruise-pricing strategies. Cruises with airfares included in the price were excluded from this study.

Results and discussion

The results of the descriptive analysis are shown in Tables  3 and 4 , and the results obtained from the hedonic models in Table  5 . Regarding the regressions, results show adjusted R 2 between 0.866 and 0.893, which means the variables considered explain the price. In general, results obtained show high consistence with those obtained in Espinet et al. ( 2018 ) in spite of the fact that the data was obtained from different sources, was collected 5 years previously, and the research was undertaken considering other destinations. In this section, the most relevant results are discussed, nevertheless the reader can dig into them and obtain their own conclusions.

An overview of cruise companies’ pricing strategies

A general overview reveals a wide range of pricing policies (Table  3 ). The most common pricing strategies are based on the type of cabin, the date of departure, and the length of time between booking and departure. Other common practices are to vary prices depending on the cabin location, the number of occupants per cabin, and discounts for children and loyalty programs. Of all the strategies of cruise companies identified in Table  3 , one that deserves special attention pertains to the number of passengers—as the capacity of people—passengers and crew—in the ship when it sails is legally limited. The fact that cruise lines offer discounts to 3rd–4th person or children can clearly affect the revenues and profitability, which must be closely monitored (Biehn 2006 ). On the other hand, some cruise companies and OTAs set discounts in order to target certain demographics such as age (55 and above), marital status, or certain professions (members of the military, teachers….) as Lieberman ( 2012 ) has observed.

The analysis of the hedonic model (Table 5 ) uncovers a wide range of differences in prices which can be the result of product and positioning strategies. The cheapest company is Pullmantur, a Spanish cruise line which offers basic services, and the most expensive is Seadream, a luxury company which provides smaller ships, usually considered yachts. Previous results concerning the pricing differences can be found in Espinet et al. ( 2018 ) and Niavis and Tsiotas ( 2018 ).

The length of stay is an important criteria in modeling cruise itineraries (Chen and Nijkamp 2018 ) and clearly affects prices (Mahadevan and Chang 2017 ; Espinet et al. 2018 ; Niavis and Tsiotas 2018 ). The results show that the price increases 8.8% on average for each additional night. Regarding services, the presence of a casino increases prices 13%, although this result should be considered with prudence as there is a great level of dispersion.

Prices are also different depending on the antiquity of the ship. In fact, the newer or the more recently refurbished the ships are the more expensive they are—ships which are more than 15 years old are 30% cheaper than newer vessels. With regard to the size of the ship, the most expensive ships are the small and the mid-sized ships—25% and 20%, respectively—although there are higher internal differences that need to be analyzed more deeply. On the another hand, the biggest ships can take advantage of economies of scale. 

From the analysis of websites and the interviews undertaken, some cruise lines offer other types of advantages, such as shipboard credit, free gratuities, free beverage packages, or unlimited internet, thereby avoiding price wars. Other pricing strategies include the lowest price guarantee and cabin category guarantee (Lieberman 2012 ).

These results show a wide range of price discrimination practices (Ladany and Arbel 1991 ; Dev 2006 ), particularly third-degree price discrimination practices as observed by Langelfeld and Li ( 2008 ), and more than other activities such as airlines or hotels. Advanced technologies, Big Data, and the development of specialized software (Domingo-Carrillo et al. 2017 ) allow companies to develop new pricing strategies that permit increases in revenues and profits.

One of the most developed product and pricing strategies in cruising is the division of cabins. The most common classification of type of cabins in cruising is inside, oceanview, balcony, and suites. These types of cabins are subdivided into other types some of which are only differentiated by the deck level, the type of view, or the location. This allows cruise lines to define more specific marketing strategies and more precise pricing policies which, in turn, permits these companies to obtain more revenues and profits. In fact, several studies indicate the importance of capacity allocation and price optimization (Ladany and Arbel 1991 ; Maddah et al. 2010 ; Li 2014 ; Ayvaz-Cavdaroglu et al. 2017 ).

The analysis of all the ships of 14 cruise companies that represent 90% of passengers in 2017 permits the researcher to conclude that there are 24.78 types of cabins on average (Table 4 ), much more than those offered by other tourism operators such as airline, hotels  or rental companies. These results coincide notably with those suggested by Lieberman ( 2012 ). The most expensive cabins—balcony and suites—have more subtype of rooms—7.53 and 6.70, respectively. On the other hand, the newer or the more recently refurnished the ships are, the greater the variety of cabins they have (28.10 the ships up to 5 years of antiquity or renewal, and 22.11 those with more than 15 years).

These results can be explained in different ways. From a marketing perspective, the adaptation of cruise lines to the needs of their passengers is trying to attract new customers or those loyal customers that have previously been on a cruise. From a pricing perspective, the existence of a greater range of cabin types facilitates the setting of more tariffs and reduces the risk that customer may ask for a change of cabin if they find a better price—as was also pointed out Lieberman ( 2012 ) and Li et al. ( 2014 ). In summary, it allows cruise lines to more profitability assignment of resources.

Information obtained from the website www.vacationstogo.com classified types of cabins into cheapest option (that could be inside cabin), oceanview, balcony, and suites. This is a particular strategy of this OTA. Results show that balcony cabins are 30% more expensive than oceanview and Suites 68%. The minimum price found is 7% cheaper than oceanview. These results endorses those obtained in Mahadevan and Chang ( 2017 ).

Departure dates

The departure dates result in differences of prices depending on the demand as has been widely justified. As observed in this research, July is the most expensive month, followed by August (− 3%). The cheapest month is November, − 34% compared to July. According to the results three seasons can be set: the most expensive would be July and August, the next would be May, June and September, and finally the cheapest would be between October and April.

Booking period

Although this research does not specifically analyze demand booking patterns, it contains data that supports the notion that one of the most current pricing strategies is dynamic pricing dependent on the number of days between booking and departure. Ayvaz-Cavdaroglu et al. ( 2017 ) point out that 84% of bookings take place within 20 weeks of departure exhibiting time dependency.

According to the results obtained in this study, prices can range 15% (difference between the lowest tariff: − 5% and the highest : + 10%) and are higher up to 60 days before departing and then tend to reduce. Further research on this topic is recommended.

Comparison between Europe and Asia

One of the aims of this paper is to determine whether cruise companies apply different strategies depending on the port of departure. Results show differences in some variables (Table 5) and can be compared with those obtained in Espinet et al. ( 2018 , Table III). One consideration must be made: all the research referenced in this study is done regarding to the northern hemisphere.

The main results are as follows:

Cruise lines Companies apply different product and pricing strategies depending on the destination. For example, some companies do not move to Asia or do it seldomly (Carnival, Disney, Pullmantur, and Seadreams). Regarding prices, some cruise lines apply clear differences, such as Holland American Lines or Princess.

Month of departure July is always the most expensive month and November and January the cheapest. However, the range of prices is different depending on the destination (55% North Europe; 40% Barcelona, and 26% Asia) that can be the result of demand. This information is relevant as cruise lines have to decide whether to reduce their prices or to move to another destination where demand is higher.

Number of nights The difference in increasing 1 night varies from 7% in Asia, 9% in Barcelona and 11% in Northern Europe. This can depend on the characteristics of the itineraries and their costs.

Type of cabins There are few differences in prices between destinations. Balcony is between 27 and 33% more expensive than oceanview, and the range in the case of suites is between 66 and 79%.

Port of departure The model concludes that the ships departing from Tokyo are the most expensive, followed by Barcelona (− 3%). The cheapest port of departure is Shanghai (− 35% with regards to Barcelona).

Booking period Results present substantial differences depending on the destination. In Barcelona, cruises are more expensive when booking up to 15 days in advance (+ 14%) and cheaper between 91 and 105 days and 121–135 before departure. In Asia, the most expensive price is when booking 106–120 before departure and cheaper 76–90 days before. In Northern Europe, behavior is completely different, and the cheaper prices were found up to 30 days before departing (Espinet et al. 2018 ). Further research is recommended.

Antiquity Results present substantial differences. In Barcelona, there are few differences in prices depending on the antiquity of the ship (− 4% up to 15 years old and − 14% ships which are more than 15 years old). However, in Asia, there are significant differences: vessels up to 5 years old are the most expensive, and the prices of the rest are around 35% cheaper. In fact, cruise companies tend to move the older ships to Asia. From the sample analyzed, ships with an antiquity of more than 15 years represent 19% of prices in Barcelona and 40% in Asia; ships of up to 10 years represent 66% in Barcelona and 34% in Asia.

Activities As onboard amenities influence pricing (Xie et al. 2012 ; Niavis and Tsiotas 2018 ) and the passengers’ willingness to pay (Mahadevan and Chang 2017 ), ships which have a casino tend to have a greater impact when departing from Asia. This result endorses the opinion of some managers that in Asia, casinos are very important for these travelers.

Conclusions

Pricing and Revenue Management strategies have been widely analyzed in the tourism sector. In this context, the cruise industry, with a limited capacity (it was about 537.000 passengers per day in 2018— www.cruisemarketwatch.com ), provides a service which is clearly different to other types of accomodation as the ships move to different destinations according to demand which undoubtedly impacts on their pricing and RM strategies (Biehn 2006 ).

This paper identifies the main pricing and RM strategies applied in the cruise industry, both at a global and local level, using a representative sample of cruise companies from around the world (more than 90%), creating an extensive database and building a model based on the hedonic approach that enables to obtain new knowledge about this market. The models developed can be considered representative, as the adjusted  R 2 obtained is higher than 85%. As a result, the conclusions arrived at here can be applied worldwide.

Cruise companies have to analyze the impact of moving towards other destinations or to set in the same zone, in spite of the fact that they are conscious of the reduction in demand and prices. In fact, results show relevant differences depending on the port of departure, for example: departing from Shanghai is 35% cheaper than from Barcelona, which can be as a consequence of costs or marketing strategies. These decisions also have to consider the characteristics of the port, availability and risk elements. For example, it is very difficult to move around Northern Europe in winter as the weather does not permit it, in contrast to the Caribbean, the main cruise touristic area, where the weather is more stable and permits cruise lines to offer itineraries during all the year.

Cruise companies use a great variety of pricing strategies, some of which are related to the services provided in the ships, the destinations and ports of call, the number of nights of the itinerary, or by segmenting the market, for example, according to the customers’ willingness to pay (Ioana-Daniela et al. 2018 ). The reason can be explained by the extensive use of advanced technologies and pricing software, which allow companies to define more precise and effective marketing strategies.

From the point of view of the ship, results reveal differences depending on the size, the antiquity of the ship, and the type of cabins and services offered. New ships are more efficient and are more adaptable to the customers’ needs so that it is possible to set a more adjusted price and to increase revenues.

Other important decision is the price depending on to the number of  days between the departure and booking date. To develop an efficient pricing strategy is very important to correctly predict the demand for each segment, building forecasting models, which include their cancelation policy, overall if customers can get a better price when booking later or re-booking, as suggested by some authors (Lieberman 2012 ; Li et al. 2014 ). These forecasting models have to be developed using historical data by each ship, cabin type, and departure in order to maximize revenues (Ayvaz-Cavdaroglu et al. 2017 ) and considering potential onboard expenses of customers (Li et al. 2014 ). Again, the use of advanced technologies, as mentioned above, is a key factor.

In sum, the development of more efficient pricing and RM strategies requires some capabilities, tangibles and intangibles, in which companies should invest, especially those regarding to human, systems, and social networks, as suggested Liozu ( 2016 ).

Cruise industry can be considered an advanced activity in the tourism sector, both in the development of marketing strategies, especially pricing and RM, and in the use of advanced technologies, facilitating cruise lines to increase revenues, profits and efficiency. A large number of these strategies can be developed by other tourism activities, such as hotel, rural tourism, or campsites.

This paper can be considered a novelty in a number of ways.  It uses the final price paid by the passenger, which is clearly different from the brochure price (Espinet et al. 2018 ). Furthermore, it is the first study in the cruise sector to compare the most important ports in Europe and Asia—Barcelona and Shanghai, respectively—facilitating the identification of the existence of different strategies.

Finally, it is suggested that new research should be undertaken concerning the inclusion of other destinations, other sources of information, other variables, and the use of other methodologies to consolidate results and to deepen our understanding of pricing and revenue management strategies. The author is expanding his research into some of these topics.

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Acknowledgements

The author wants to acknowledge the helpful collaboration and support in the development of this research from Xavier Asencio, Marc Miquel, Ariadna Gassiot and Gethyn Rees.

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Josep Mª Espinet Rius

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Espinet Rius, J.M. Global and local pricing strategies in the cruise industry. J Revenue Pricing Manag 17 , 329–340 (2018). https://doi.org/10.1057/s41272-018-00155-5

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Received : 22 April 2018

Accepted : 20 June 2018

Published : 09 July 2018

Issue Date : 19 October 2018

DOI : https://doi.org/10.1057/s41272-018-00155-5

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Why Third-Party Risk Management Matters to the Cruise Industry

By: Hilary Jewhurst on July 17 2023

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Cruise lines rely heavily on third-party vendors and contractors for various services, including port services, catering, medical care, and IT infrastructure. While these third-party relationships make sure the ship sails smoothly, they can also introduce risks that are hard to manage. 

What Is Third-Party Risk Management?

Third-party risk management (TPRM) is the process that enables an organization to identify, assess, manage, and monitor risks associated with third-party vendors, contractors, and other partners. It involves:

  • Establishing a framework for risk assessment
  • Due diligence
  • Risk mitigation
  • Ongoing monitoring 

Following the TPRM lifecycle is the best way to achieve comprehensive risk management throughout the vendor relationship. The lifecycle stages include onboarding, ongoing, and offboarding. Effective TPRM ensures that every step and required activity within each lifecycle stage is properly addressed and managed.

Following the TPRM lifecycle helps cruise line organizations reduce non-compliance risk and deliver quality products and services from third parties.

Why TPRM Matters for Cruise Lines

Unfortunately, several high-profile incidents involving third-party vendors have affected the cruise industry, resulting in financial and reputation damage, making TPRM extremely important.  

Examples of Third-Party Vendor Incidents Impacting Cruise Lines  

  • Norwegian Cruise Line suffered a data breach in March 2020 , potentially caused by a third-party vendor or partner. The breach impacted their customers, and hackers were claimed to be selling the data on the dark web. The breached database contained almost 30,000 records, and the data in question related to travel agents, including Co-operative Travel, Hays Travel, TUI, and Virgin Holidays, which had used a regional Norwegian Cruise Line partner portal. The breach occurred through Norwegian's travel agent portal, which suggests that the breach may have been caused by a third-party vendor or partner.
  • Carnival Corporation, the world's largest cruise line operator, was fined $40 million in 2016 for pollution violations related to its third-party vendors. A vendor was found to have been illegally discharging waste and oil from its ships, using "magic pipes" to bypass pollution controls.
  • Carnival Cruise Line was fined for a data breach in 2022  that involved the personal information of approximately 180,000 Carnival employees and customers. The breach was the result of a cyberattack on an unsecured email provider. The Federal Trade Commission fined the cruise line $20 million for inadequate data security measures. Carnival Cruise Line was fined $20 million by the U.S. Federal Trade Commission for inadequate data security measures.

Five Benefits of Having a TPRM Program

By implementing a TPRM program, cruise lines reduce the risk of incidents and breaches caused by third parties. It also protects their reputation and the safety of their passengers and crew members.

third-party risk matters cruise industry

Here are five benefits to an effective TPRM program:

  • Mitigating Operational and Reputation Risks The cruise industry is highly susceptible to operational and reputational risks. Any incidents that occur onboard, during shore excursions, or involving third-party vendors can significantly affect the cruise line's reputation , financial performance, and future bookings. With a TPRM program, the industry can identify, assess, and mitigate these risks. TPRM ensures that third-party vendors are also following the operational standards of the cruise line.
  • International Maritime Organization Safety of Life at Sea Convention 
  • International Ship and Port Facility Security Code 
  • United States Centers for Disease Control and Prevention Vessel Sanitation Program
  • Managing Cybersecurity Risks Cruise lines and their third-party vendors are also vulnerable to cybersecurity risks , such as data breaches and cyberattacks. Cybersecurity risks can result in financial losses, reputational damage, and potential legal liabilities. With a TPRM program in place, cruise lines can assess the cybersecurity posture of their third-party vendors and work with them to address any vulnerabilities.
  • Addressing Health and Safety Risks The COVID-19 pandemic brought health and safety risks to the forefront of the cruise industry. Cruise lines must ensure third-party vendors implement appropriate health and safety protocols to protect passengers and crew members. With TPRM, you can conduct regular health and safety audits and assessments to ensure that third-party vendors comply with industry and government regulations, reducing the risk of COVID-19 and other outbreaks onboard.
  • Improving Efficiency and Reducing Costs A TPRM program can help cruise lines improve efficiency and reduce costs. Cruise lines can avoid costly disruptions and downtime by identifying and addressing potential risks before they become major issues or make headlines. By leveraging vendor risk assessments and performance management data , they can also negotiate better contracts with third-party vendors.

Implementing TPRM in the cruise industry ultimately ensures the safety of passengers and crew members, whether it’s their personal data, health, or safety. Cruise lines can also keep their reputation secure while avoiding costly fines and litigation. 

Willingness to invest in and support an effective TPRM program can allow your organization to improve its overall business strategy. Download to learn the value of third-party risk management.

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Cruise Lines International Association (CLIA) oceangoing members (CLIA members) recognize that proper waste management is fundamental to the protection of the environment. Toward this end, CLIA members are to manage their wastes in accordance with sound environmental principles and in compliance with all regulatory requirements, and continually strive to minimize their waste and seek improved waste management practices.

Through the International Maritime Organization (IMO) and flag and port States, CLIA Members are subject to comprehensive, consistent and uniform international standards, as well as the national, state and/or local regulations that apply to all vessels. The standards of MARPOL (the International Convention for the Prevention of Pollution from Ships) have in turn been adopted by most flag and port States and subsequently enacted into national legislation and regulation. Additional national and local legislation have been adopted by many port States. The cruise industry demonstrates its commitment to protecting the environment through the use of a broad spectrum of waste management technologies and procedures employed on its vessels.

CLIA Members have demonstrated their commitment to the environment by:

  • Developing and maintaining an environmental policy which is the basis of an environmental management system;
  • Establishing   a   dedicated,   responsible   person   to   oversee   the environmental program;
  • Clearly defining operational  objectives,  requiring compliance with applicable laws and regulations, and encouraging continuous improvement of performance;
  • Designing,  constructing,  and  operating vessels,  so  as  to  minimize their impact on the environment;
  • Implementing  comprehensive  waste  minimization  processes  and procedures,  and  advancing  technologies  to  minimize  waste  and exceed current requirements for protection of the environment, where possible;
  • Expanding  waste  reduction  strategies  to  include  beneficial  reuse, recycling, and waste to energy processes, to the maximum extent possible;
  • Conserving  resources  through  purchasing  strategies  and  product management;
  • Optimizing  energy  efficiency  through   conservation   and   energy management;
  • Reviewing and improving processes and procedures for collection and transfer of hazardous waste;
  • Strengthening programs for the monitoring and auditing of shipboard environmental practices and procedures, in accordance with the International Safety Management (ISM) Code for the Safe Operation of Ships and for Pollution Prevention;
  • Engaging   and   evaluating   partners   who   provide   efficient   and sustainable strategies for waste and recyclables landed ashore;
  • Minimizing and properly managing wastewater discharges beyond compliance with applicable requirements whenever possible; and
  • Increasing environmental awareness by educating crew, guests, and the communities in which they operate regarding cruise ship environmental programs.

WASTE MANAGEMENT BEST PRACTICES AND PROCEDURES

Introduction

The cruise industry is inextricably linked to the environment. Our business is to bring people to interesting places in the world, by travelling via water. The future of the industry depends on a clean and healthy environment.   Cruise industry senior management has demonstrated its commitment to stewardship of the environment by establishing industry practices that will make CLIA’s oceangoing members (CLIA Members) leaders in environmental performance.

The purpose of this document is to describe waste management practices and procedures that CLIA Members agree shall be incorporated into their respective Safety Management Systems (SMS).  The development of industry practices and procedures is based upon the fundamental principles outlined in CLIA’s Waste Management policy.

To  the  extent  there  are  any  waste  management  practices  and  procedures  not described herein, CLIA Members have agreed to use best waste management practices and to comply with all local, state, national, and flag State operational waste management laws and requirements.

Cruise vessels, as do all industrial, commercial, and residential entities, generate waste as a result of normal daily activities/operations. Due to the itinerant nature of cruises, the management of these wastes is more complicated than for land-based establishments. As ships move from port to port, the available facilities and regulatory requirements they encounter are different.

On an international level, environmental concerns are an important part of the International Maritime Organization (IMO) policies and procedures for the maritime industry. CLIA members have agreed on the need to incorporate international, national and local environmental performance standards into their individual SMS. As specified under agreements and laws in many nations, compliance with these requirements is routinely reviewed by port States.

The industry has developed best practices for the management of traditional wastes (e.g., garbage, graywater, sewage, oily residues, sludge oil, and bilge water), as well as the small quantities of hazardous waste produced onboard, during normal operations. CLIA Members share waste management strategies and technologies amongst themselves while focusing on the common goals of waste reduction and pollution prevention. CLIA Members have voluntarily agreed to adopt the more stringent practices set forth in this Policy, which exceed legal requirements, during all normal operations. Allowable exceptions to CLIA’s Policy may occasionally occur, e.g., sewage treatment plant equipment maintenance and malfunctions, and safety related discharges permitted under MARPOL Annex IV. In all cases where limits on discharge to the more stringent CLIA policy cannot be achieved, discharges must still be compliant with international and national laws.

The commitment of the industry to this cooperative effort is successful, as companies continue to share best practices, information, and strategies which continue to improve.

Waste Management Practices

CLIA Members take great measures to manage garbage and continuously strive to implement new and more effective waste minimization processes and procedures. These operators further continuously strive to implement and invest in new and comprehensive  waste  minimization  processes  and  procedures,  relevant environmental training, and sustainable wastewater operations.

CLIA member have agreed to develop programs that raise the level of environmental awareness of both crew and passengers. Each ship’s crew are to receive initial and recurring training regarding shipboard environmental procedures. Advanced training in specific shipboard environmental management issues is to be provided for those directly involved in these areas. Those directly responsible for processing wastes are to be given specific instructions as to their duties and responsibilities, the operation of the relevant equipment and waste management systems. Specific steps CLIA Members have agreed to take to train crew members and increase passenger awareness may include the following:

  • Comprehensive training programs for new crew with recurring and updated training on a periodic basis;
  • Announcements over the public address system, notices in ship newsletters, appropriate signage (required and voluntary) and informational posters in crew and passenger areas encouraging environmental awareness and protection;
  • Environmental information booklets in crew cabins and crew lounges;
  • Corporate and shipboard produced informational videos shown on cabin TV channels;
  • Presentations  for  passengers  on  company  environmental  programs  and regulatory requirements; and
  • Periodic environmental committee meetings, consisting of officers and crew from all departments to review methods of improving performance, including enhanced and more effective environmental practices.

Waste Collection, Separation, and Processing

CLIA Members have agreed to establish comprehensive procedures in their specific waste management plans that drive the safe and hygienic collection, minimization separation, and processing of wastes onboard and offloads to approved shoreside waste vendors.

Waste can be classified in several ways, but the following definitions represent typical classifications used by CLIA Members, some of which come from the pertinent MARPOL Annex V definitions:

Biomedical waste means waste whose collection and disposal is subject to special requirements in order to prevent infection.

Cooking oil means any type of edible oil or animal fat used or intended to be used for the preparation or cooking of food, but does not include the food itself that is prepared using these oils.

Domestic wastes means all types of wastes that are generated in the accommodation spaces on board the ship, but does not include graywater.

Electronic waste (E-waste) means used electrical appliances, TVs, computers, monitors, etc.

Food wastes means any spoiled or unspoiled food substances, including fruits, vegetables, dairy products, poultry, meat products and food scraps generated aboard the ship.

Garbage means all kinds of food wastes, domestic wastes and operational wastes, all plastics, and cooking oil generated during the normal operation of the ship and likely to be disposed of continuously or periodically.

Harmful Substance means any substance which, if introduced into the environment, is likely to create hazards to human health, harm living resources and/or marine life. This may include the term “hazardous waste” used in some jurisdictions.

Incinerator ashes means ash and clinkers resulting from shipboard incinerators used for the incineration of garbage.

Operational wastes means all solid wastes that are collected on board during normal maintenance or operations of a ship.   Operational wastes includes cleaning agents and additives contained in external wash water, but does not include graywater, bilge water or other similar discharges essential to the operation of a ship.

Plastic means a solid material, which contains, as an essential ingredient, one or more high molecular mass polymers, and which is formed (shaped) during either the manufacture of the polymer or the fabrication into a finished product by heat and/or pressure. Plastics have material properties ranging from hard and brittle to soft and elastic.

Recyclable materials means paper, glass, bottles, cans, metals, certain plastics, clothes, and batteries capable of some beneficial re-use.

CLIA Members agree to manage their waste streams according to the following details and specific practices.

Cooking Oil :

Waste cooking oil is typically strained to remove debris and then collected and landed ashore for recycling in the bio-diesel market where feasible. Otherwise, it may be collected in onboard storage tanks and landed ashore with engine oily residues.    It  may  be  directly  incinerated  or  burned  as  fuel  to  make  steam  or electricity on board.

Domestic Wastes :

CLIA Members agree to the installation of any method (compactors, shredders, incinerators, etc.) to reduce the volume of the waste, which in turn reduces the storage space required and results in more efficient offloading and recycling programs.

Paper, cardboard, and other combustibles are to be recycled when local recycling facilities are available shoreside, but some volume may be incinerated aboard to avoid large accumulation of these combustible materials, as that would present an increased fire hazard.

Glass  bottles,  jars  and  other  glassware  are  to  be  crushed  for  recycling.    Some members and larger vessels separate glass by color to further increase the recycling potential of the waste stream.

Aluminum, (soda cans and deck chairs), galley tins, and other metals (copper, brass, bronze, Cu-Ni and scrap steel) are to be separated by type and landed ashore for recycling, where local recycling facilities exist.

Incinerator Ash:

Incinerator  ash  is  to  be  landed  ashore  in  accordance  with  applicable  local  and national requirements.  CLIA Members agree to test incinerator ash at least annually for any hazardous components. Each CLIA Member is to also use a testing standard that is accepted worldwide.

Operational Wastes :

Many operational wastes may be hazardous or may otherwise require special handling.  CLIA Members have agreed to ensure that all waste of this nature is appropriately categorized and landed in accordance with the local requirements and only where an acceptable handling/disposal practice is in place.

CLIA Members have agreed on the need to identify and segregate hazardous wastes aboard cruise vessels for individual handling and management, in accordance with applicable laws and regulations. CLIA Members have further agreed that hazardous wastes are not to be commingled or mixed with other waste streams. The following specific measures have been identified as best industry practices:

P hoto Processing, including X-ray development fluid waste:

CLIA Members agree to prevent the discharge of silver into the marine environment through the use of the best available technology to reduce the silver content of the waste stream to levels specified by prevailing regulations.   Photo chemical waste shall not be discharged overboard or commingled with any other waste water. Otherwise, they are to treat all photo processing and x-ray development fluid waste (treated or untreated) as a hazardous waste and land ashore in accordance with local legislation.

Many CLIA Members have installed digital X-ray and photo processing alternatives to further reduce the generated waste.

Dry-cleaning waste fluids and contaminated materials:

Shipboard dry cleaning facilities typically use a chlorinated solvent and produce a small amount of waste. This waste is comprised of dirt, oils, filters material, and spent solvent. This material is classified as hazardous or special waste and is only to be disposed of ashore as required by law or regulation.  Some CLIA Members have replaced solvent based dry cleaning equipment with similar systems using non-toxic solvents.  Others have installed “wet cleaning” processes which do not utilize any solvents and therefore do not produce hazardous waste.

Electronic waste (E-waste):

Rapid changes in technology mean that more and more electronic items are replaced and discarded continually.  Electronic waste, also known as E-waste, is known to contain  low  levels  of  toxic  heavy  metals  such  as  arsenic,  barium,  cadmium, chromium, lead, mercury, silver and selenium. To dispose of these products in a sound manner, CLIA Members agree to collect and recycle used electronic equipment generated aboard with reputable vendors known to properly handle this waste.   E- waste accepted for recycling includes the following:

  • Computer monitors and televisions
  • Personal computers, keyboards, hard drives, printers and printer cartridges
  • VCRs, audio and video equipment
  • Communication equipment such as cellular telephones and hand-held radios
  • Smoke detectors (non-ionizing)

P rint shop waste fluids:

Print shop waste may contain hazardous waste. Printing solvents, inks and cleaners may contain hydrocarbons, chlorinated hydrocarbons, and/or heavy metals that can be harmful. Recent advances in printing technology and the substitution of chemicals that are less hazardous reduce the volume of print shop waste generated and the impact of these waste products.

CLIA Members are to utilize, whenever possible, printing methods and printing process chemicals that produce less hazardous waste volume.   Shipboard print operators are to be trained to minimize printing waste.   Alternative printing inks, such as soy based, non-chlorinated or hydrocarbon-based ink products, are to be used whenever possible.

CLIA Members have further agreed that all print shop waste, including waste solvents, cleaners, and cleaning cloths, is to be treated as hazardous waste, if such waste  contains  chemical  components  that  may  be  considered  hazardous  by regulatory definitions and that all other waste may be treated as non-hazardous.

P hoto copying and laser printer cartridges:

The increased use of laser and photo copying equipment onboard results in the generation of a number of used toner and ink cartridges. Only such ink, toner and printing/copying cartridges that contain non-hazardous chemical components are to be used. In recognition of CLIA Members’ goal of waste minimization, cartridges should, whenever possible, be returned to the supplier or an alternative facility for recycling and reuse.

Unused and outdated pharmaceuticals:

In general, ships carry varying amounts of pharmaceuticals in their medical centers. The pharmaceuticals that are carried range from over-the-counter products such as anti-fungal creams to prescription drugs such as epinephrine. Each ship stocks an inventory based on its itinerary and the demographics of its passenger base. All pharmaceuticals are managed to ensure that their efficacy is optimized and that disposal is done in an environmentally responsible manner.

When disposing of pharmaceuticals, the method used is to be consistent with established and applicable regulations.  Furthermore, most regulatory jurisdictions have a posting of listed pharmaceuticals that must be considered hazardous waste once the date has expired or the item is no longer acceptable for patient use.

Stocks of such listed pharmaceuticals should, when possible, be returned to the vendor prior to the date of expiration. Pharmaceuticals that are being returned and have not reached their expiration date are shipped using ordinary practices for new products.

CLIA Members have agreed that all expired listed pharmaceuticals are to be handled in accordance with established guidance.  For example, in the US, the Environmental Protection Agency (EPA) has issued a report that clarifies the fact that residuals, such as epinephrine, found in syringes after injections are not considered an acutely hazardous waste, by definition, and may be disposed of appropriately in sharps containers.  Additionally, all CLIA Members have agreed to adhere to all Universal Precautions when handling sharps.

CLIA  Members  are  to  employ  one  or  more  of  the  following  practices  when disposing of pharmaceuticals:

  • establish a reverse distribution system  for returning unexpired, unopened non-narcotic pharmaceuticals to the original vendor;
  • appropriately destroy narcotic pharmaceuticals onboard the ship, in a manner that is witnessed and recorded;
  • offload listed pharmaceuticals in accordance with local regulations. Listed pharmaceuticals are hazardous wastes with chemical compositions that prevent them from being incinerated or disposed of through the ship’s wastewater treatment plant; and/or
  • dispose  of  other  non-narcotic  and  non-listed  pharmaceuticals  through onboard incineration or landing ashore.

F luorescent and mercury vapor lamp bulbs:

CLIA Members agree to prevent the release of mercury into the environment from spent fluorescent and mercury vapor lamps by assuring proper recycling or by using other acceptable means of disposal.

Fluorescent and mercury vapor lamps contain small amounts of mercury that could potentially be harmful to human health and the environment. To prevent human exposure and contamination of the environment, these lamps are to be handled in an environmentally safe manner. Recycling of mercury from lamps and other mercury containing devices is the preferred handling method and is encouraged by various authorities. The recycling of fluorescent lamps and high intensity discharge (HID) lamps keeps potentially hazardous materials out of landfills, saves landfill space, and reduces raw materials production needs.

Disposal of the glass tubes can be accomplished by (1) processing with shipboard lamp crusher units that filter and absorb the mercury vapor through H.E.P.A. and activated carbon, or (2) by keeping the glass tubes intact for recycling ashore. The intact lamps or crushed bulbs are classified when they are shipped to a properly permitted recycling facility; as such, testing is not required. The filters are to be disposed of as hazardous waste, in accordance with applicable laws and regulations.

Other mercury containing products:

Where  feasible,  CLIA  Members  are  to  reduce  the  use  of  mercury-containing products. Any product that contains mercury is to be landed ashore as hazardous or special waste, as appropriate.

B a tteries:

If not properly disposed of, spent batteries may constitute a hazardous waste stream. Most of the large batteries are used in Uninterruptible Power Supply (UPS) systems, in lifeboats and tenders and standby generators. Small batteries used in flashlights, microphones and other equipment and by passengers’ personal use, account for the rest. CLIA Members agree to recycle batteries whenever possible.

Spent batteries are to be collected and returned for recycling and/or disposal in accordance with prevailing regulations. Discarded batteries are to be isolated from the other waste streams to prevent potentially toxic materials from inappropriate disposal. The wet-cell battery-recycling program is to be kept separate from the dry- battery collection process. Intact wet-cell batteries are to be returned to the supplier, when  possible.  Dry-cell  batteries  are  to  be  manifested  to  a  licensed  firm  for recycling.

Bilge and Oily Water Residues :

CLIA Members agree to meet or exceed the international requirements for removing oil from bilge and wastewater prior to discharge.

The lowest point in the engine room machinery spaces of a cruise ship is known as the bilge.   Water and oil drip from various sources such as shaft seals, propulsion system cooling elements, evaporators, and other machinery. It is periodically pumped into holding tanks and treated to bring the oil in water concentration down to 15 parts per million (ppm) or less.  

International conventions (i.e. MARPOL) allow discharge of this treated bilge water so long as the oil remaining in the water does not exceed 15 ppm and that it does not leave a visible sheen on the surface of the water when the ship is proceeding en route (underway to allow for dispersion).  The oil removed from the water is held onboard for reuse or disposal ashore.

In accordance with the MARPOL Convention and associated regulations, every ship of 400 gross tonnage and above shall be provided with and maintain an Oil Record Book  that  records  the  transfer  of  all  oil  and  oily  liquids,  including  fuel  oil, lubricating oil, waste oil, oily sludge, and oily bilge water.

CLIA Members are constantly researching ways in which plastic can be reduced through sourcing and product selection. Plastic is a product that exists in every aspect of our lives, both ashore and aboard. CLIA Members are committed to reducing plastics disposed of in landfills and increasing recycling volumes. Plastics are separated and recycled whenever possible.

Wastewater Reclamation:

Management of water use on a cruise ship is extremely important.  This management includes minimizing water usage and reclamation and reuse of water for non-potable purposes.  CLIA Members are to use various techniques to minimize onboard water use, including:

  • use of technical water (for example, air conditioning condensate) in systems that do not require potable water (flushing toilets, laundry, open deck washing), where possible;
  • use of water recovery systems (for example, filtering and reuse of laundry water “last rinse” used for first wash);
  • active water conservation (for example, use of reduced flow showerheads, vacuum systems for toilets, vacuum food waste transportation, and laundry equipment that utilizes less water); and
  • training of the crew to continually remind them to close faucets and valves when not in use and use only necessary quantities of water for cleaning purposes.

G r aywater :

The term graywater is used on ships to refer to wastewater that is incidental to the operation  of  the  ship.  This  typically  includes  drainage  from  galleys  (food preparation, dishwashing and cleaning), accommodation showers and sinks, and laundry.

CLIA Members agree that for ships not using onshore reception facilities and travelling regularly on itineraries beyond the territorial waters of coastal States, graywater may only be discharged  while the ship is underway and proceeding at a speed of not less than 6 knots 1 and at a distance not less than 4 nautical miles from the nearest land or such other distance as agreed to with authorities having local jurisdiction or provided for by local law except in an emergency or where geographically limited. 2

S e w age (also known as Blackwater)

Sewage includes waste water from toilets, urinals, medical sinks and other similar facilities. CLIA members agree to process sewage through a sewage treatment system that is certified in accordance with international regulations, prior to discharge during normal operations. For ships not using onshore reception facilities and travelling regularly on itineraries beyond the territorial water of coastal states, discharge is to take place only when the ship is more than 4 nautical miles from the nearest land and traveling at a speed of not less than 6 knots. 3

Advanced Wastewater Treatment Systems

To improve environmental performance, many cruise lines have installed advanced wastewater treatment systems (AWTS) that utilize advanced tertiary-level treatment. These advanced wastewater treatment systems result in effluent discharges that are often equivalent to the best shoreside treatment plants and may therefore not be subjected to the strict discharge limitations noted above 4 . CLIA members recognize the sensitivity of discharging wastewater and cooperate fully with national and local requirements in planning wastewater discharges where permitted. CLIA, as an organization, encourages the provision of adequate shoreside reception facilities for wastewater where discharge is a concern.

Baltic Sea CLIA members recognize the extraordinary eutrophication situation in the Baltic Sea, which necessitated its designation as a Special Area under MARPOL Annex IV.  The IMO Guide to Good Practice for Port Reception Facility Providers and Users, which was revised following the designation of the Baltic Sea as a Special Area, encourages shipping companies, even when the Special Area has not yet come into effect, to endeavor to meet the requirements as if the Special Area status had taken effect.  Consistent with the spirit of MARPOL and the port reception facility guidance, CLIA members have adopted a policy that, when operating in the Baltic, ships are to discharge MARPOL Annex IV waste ashore where adequate port reception facilities are available under a ‘no special fee’ arrangement. Equivalent Equipment, Practices and Procedures

CLIA members have long been at the forefront of innovative technological solutions regarding the management of waste onboard their ships and it is important that such innovation be encouraged. To that end, CLIA Members welcome the use of equivalent or other acceptable practices and have agreed that any such procedures shall be communicated to CLIA. As appropriate, such practices and procedures may be included as a revision to this document. As an example, when equivalent systems for treating graywater or blackwater are shown to meet the requirements for MSDs and accepted by appropriate authorities for the treatment of graywater or blackwater, the new systems and associated technology may be included in this document together with an explanation of the impact such systems and associated technology may have on the current practice of discharging graywater or blackwater while underway.

1 For vessels operating under sail, or a combination of sail and motor propulsion, the speed shall not be less than 4 knots. 2 The term “geographically limited” includes special circumstances where a ship is operating in internal waters or shoreward of a territorial sea baseline for an extended period of time, in which case any applicable laws and regulations will be controlling. 3 For vessels operating under sail, or a combination of sail and motor propulsion, the speed shall not be less than 4 knots. 4 Associated AWTS bioresidual may be landed ashore, dried and incinerated or discharged consistent with the requirements of MARPOL Annex IV.

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How cruise lines can manage scheduling and resources

Dynama's Lee Clarke explains how workforce optimisation technology can help

How cruise lines can manage scheduling and resources

Managing large crews and keeping passengers safe in today’s cruise industry is complex. Lee Clarke from Dynama recommends using workforce optimisation technology in six focus areas to improve customer service and business performance

By Guest | 13 December 2018

The global cruise industry is undergoing a period of rapid transformation. In a climate of increased consolidation and regulation, cruise companies around the world face a complex set of challenges when it comes to managing their vast crews and keeping their passengers safe. Optimising crew and resources, achieving economies of scale and winning market share in one of the world’s fastest growing leisure sectors are key objectives in the sector, yet the sheer scale of managing cruise ships may make these goals seem unattainable.

All too frequently, the volume of information and process challenges involved in the industry can have a potentially damaging impact on customer service and negative commercial implications. At the same time, these challenges present significant opportunities for cost control, service improvement and strategic performance when the issues are overcome and resources are optimised effectively.

So how do cruise lines overcome these challenges and turn them into positive opportunities? Dynama’s Scheduling and Resource Management for Cruise Lines white paper outlines how these operators can improve guest satisfaction and business performance by deploying automated workforce optimisation (WFO) solutions to alleviate the biggest pain points in six key areas.

First, cruise operators should optimise their resources by using the latest WFO technology to gain 360-degree visibility across deck, engine and hotel crew from within one single integrated system. Having all critical information in one place provides control in an information-intensive environment, making it easy to create, maintain and change schedules quickly and efficiently. This gives management time to focus on revenues and minimising risk, while crew members can devote themselves to improving the guest experience.

The second area to focus on is cost control. Ensuring the right crew members are on the right cruise ships at the right time with up-to-date medical and travel documentation is critical but expensive. In fact, crew travel expenses are one of the biggest costs for cruise lines. The good news is that even small changes can amount to multi-million dollar savings. The latest WFO solutions integrate with human resources and travel systems to enable joined-up logistics planning that keep crew moving, with the best flight and hotel deals available. Furthermore, sophisticated functionality enables operators to plan for ‘what if’ scenarios. This includes budgetary analysis alongside full demand planning and compliance management before a single dollar is actually spent.

Third on the list is compliance with international best-practice standards and legislation. This is essential when it comes to ensuring the safety of crew and passengers. Automated WFO systems provide the hard evidence necessary to demonstrate compliance with these regulations by capturing, storing and reporting on a ship’s end-to-end compliance activities at the click of a button. Plus, they minimise the risk of heavy penalties for non-compliance.

Next up is staff engagement. Attracting, developing and retaining the best talent is a constant challenge in the highly competitive cruise industry, so operators must find ways to improve staff engagement levels. To do this, companies can use WFO to create a virtual library of crew skills and then tap into the data to develop meaningful training programmes and career paths. They can further empower and motivate staff by adding self-service capabilities. At a glance, crew members can view their schedules, see who they are working with, trade shifts with colleagues and request time off, at any time and from anywhere in the world.

Change readiness is the fifth key area. Constantly changing operational and industry demands put immense pressure on scheduling and resource management. Fortunately, WFO solutions consolidate and analyse big data in a dynamic way, enabling managers to build efficient, flexible schedules for today and tomorrow. Spotting trends and variances in demand and in real time improves proactive decision-making and boosts business agility.

Finally, cruise operators should explore system interfacing. Effective scheduling and resource management depend on harnessing the right information from the best applications available, rather than forcing existing systems to integrate with each other. The latest WFO solutions interface with most of the leading enterprise resource planning and human resources systems as standard, enabling easy information exchange for core financial, human resources and payroll requirements. Delivered as software-as-a-service solutions, today’s technology also reduces capital expenditure and simplifies the IT implementation and management procedures associated with traditional on-premise infrastructures.

By focusing on these six areas and executing them well, cruise operators can create a future-proof scheduling and resource management framework that helps them to keep everything shipshape.

Lee Clarke is general manager for US and EMEA at Dynama

Tags: Dynama     workforce optimisation

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cruise industry management

Press Releases

Royal caribbean group transforms waste management in the cruise industry, helping protect the oceans.

MIAMI – July 11, 2023 – Royal Caribbean Group (NYSE: RCL) is building on its industry-leading waste management practices by introducing the next generation of technology to make its way to the high seas. These tools, from waste-to-energy systems, food waste applications and an expanded network of green hubs, are a result of the cruise company’s relentless drive to deliver the best vacation experiences responsibly.

Debuting this year, on two of the cruise company’s newest ships, will be the cruise industry's first systems to turn solid waste directly into energy on board.

“I am proud of Royal Caribbean Group’s drive to SEA the Future and be better tomorrow than we are today,” said Jason Liberty, president and CEO, Royal Caribbean Group. “Pioneering the first waste-to-energy system on a cruise ship builds on our track record of waste management and furthers our commitment to remove waste from local landfills and deliver great vacation experiences responsibly.” Solid Waste to Energy at Sea The systems, Microwave-Assisted Pyrolysis (MAP) and Micro Auto Gasification (MAG), debuting respectively on Royal Caribbean International’s Icon of the Seas and Silversea Cruises' Silver Nova , will take waste on board and convert it into synthesis gas (syngas) that the ship can directly use as energy. Much like land-based waste-to-energy facilities, the result is repurposing waste in an efficient and sustainable way. An additional bioproduct of the system, biochar, can also be used as a soil nutrient.

Reducing Food Waste Royal Caribbean Group is also looking at waste management from start to finish, including its plans to reduce food waste across the fleet by 50% by 2025. To do so, the cruise company is implementing initiatives across its brands including:

  • Developing a proprietary platform to monitor food supply and accurately estimate how much food should be produced, prepped and ordered on a given day.
  • Using artificial intelligence (AI) to adjust food production in real time.
  • Introducing a dedicated onboard food waste role to monitor and train crew members.
  • Tracking guest demand for specific menu items and adjusting menu preparation and ordering accordingly.
  • Partnering with World Wildlife Fund (WWF) to introduce a food waste awareness campaign in the crew dining areas fleetwide.

To date, Royal Caribbean Group has achieved a 24% reduction in food waste by focusing on the frontend of the food system, which prevents and addresses many of the main causes of food waste, including inventory management and over-preparing.

Expanding Green Hubs Since the company’s first environmental initiative, Save the Waves, aimed at ensuring no solid waste goes overboard, Royal Caribbean Group has worked diligently to increase accountability and strengthen responsible waste management practices. To do so, it developed Green Hub, a capacity-building program to identify waste vendors in strategic destinations that has helped divert 92% of its waste from landfills. Since its start in 2014, the program has grown to 33 ports worldwide.

Now joining the Green Hub program is the Galapagos Islands, where Silversea became the first operator to gain certification in environmental management by diverting all waste from landfill. Initiatives like this allow Royal Caribbean Group to continue to safeguard the delicate ecosystem of the Galapagos for future generations.

Championing the Environment With a sustainability journey that began over 30 years ago, Royal Caribbean Group has remained steadfast in its commitment to innovate and advance the solutions necessary for a better future. Building on a robust portfolio of technologies that improve energy efficiency, water treatment and waste management, incorporating waste-to-energy systems is an extension of the company's commitment to reach beyond the expected and SEA the Future to sustain the planet, energize the communities in which it operates and accelerate innovation.

To learn more about how Royal Caribbean Group connects people to the world's most beautiful destinations while respecting and protecting ocean communities and ecosystems, visit www.royalcaribbeangroup.com/SEAtheFuture .

Media Contact:

[email protected]

About Royal Caribbean Group

Royal Caribbean Group (NYSE: RCL) is one of the leading cruise companies in the world with a global fleet of 64 ships traveling to approximately 1,000 destinations around the world. Royal Caribbean Group is the owner and operator of three award winning cruise brands: Royal Caribbean International, Celebrity Cruises, and Silversea Cruises and it is also a 50% owner of a joint venture that operates TUI Cruises and Hapag-Lloyd Cruises. Together, the brands have an additional 10 ships on order as of March, 31, 2023. Learn more at www.royalcaribbeangroup.com or www.rclinvestor.com.

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July 2023 - Debuting on Royal Caribbean International’s Icon of the Seas is the Microwave-Assisted Pyrolysis (MAP) waste-to-energy system, which converts waste on board into energy (synthesis gas or syngas) the ship can directly use.

FIU News Homepage

FIU launches world’s first master’s track in cruise line operations

By Monica Smith

June 15, 2022 at 11:38am

When he thought of creating the 12-month M.S. in Hospitality Management: Cruise Line Operations track , Joseph Cilli, department chair and director of distance learning for the Chaplin School of Hospitality & Tourism Management , envisioned it as a “flag in the sand” to make the cruise line industry synonymous with FIU. 

“We are leveraging the university’s deep connections within the cruise industry for this first-of-its-kind specialization, and we certainly have the embedded industry partners to give students real-world working knowledge,” Cilli says. 

Despite the last two years, the cruise line industry continued its steady growth and is predicted to reach explosive levels of expansion, says Margaret Fan '10, MS '12, global talent attraction operations manager at Royal Caribbean Group and adjunct instructor for the program.

With a full recovery predicted by mid-2023, this rapid growth poses a challenge: finding individuals steeped in specific knowledge to help run the shoreside support needed to make cruising safe and entertaining.

“The major cruise line companies are headquartered in South Florida. When people think of the cruise line industry, they should immediately think of FIU as the primary educational partner,” adds Adjunct Professor Patricia Sadar, who teaches a course in cruise line management for the Chaplin School.

Much-needed demand

The ongoing workforce shortages in the hospitality business, Fan says, have accentuated the skills gap in the cruise line industry. 

An FIU alumna, Fan, who completed her bachelor’s degree in hospitality in 2010 and her master’s degree in hospitality in 2012, appreciates the partnerships the Chaplin School has with the cruise line industry. An internship almost 10 years ago helped equip her for the role she now holds.

“My internship with Royal Caribbean, obtained through my program, was the catalyst for my career,” she offers as she speaks about creating enhanced guest experiences and attracting and recruiting top talent for the international cruise line market.

Cilli underscores that the program, which launches in fall 2022, will be peppered with an ample number of internship opportunities, like the one Fan participated in, and discusses the full contents of the track, which reflects real-world and relevant information for what graduates will be required to know in the next years.

“The idea behind this unique degree is the creation of jobs. Having students learn in the cruise capital of the world creates a direct pipeline to opportunities and potential positions within the industry or related fields after graduation,” said Michael Cheng, dean of the Chaplin School of Hospitality & Tourism Management.

What students will learn

The master’s degree track will cover human resources from a cultural perspective and the leadership requirements to manage individuals from other cultures. The implications of maritime law regarding foreign employees and guests, as well as legal compliance issues related to public health, will also be covered.

In addition, students will learn how to understand contracts and the implications of duties. The program also centers on sustainability efforts and the cruise line industry’s effect on local destinations’ economy and the environment.

Sadar says that the sustainability course is novel and needed. Currently, the industry is working hard to reduce environmental impacts and to satisfy all needs for compliance.

Going further, Sadar reasons that when a ship leaves a port, at sea, it’s difficult if not impossible to receive supplies. With the supply chain issues worldwide, this is a great concern for cruise line operations.

“Global logistics is one of the backbones of the cruise industry. The program explores trade agreements with foreign entities, as well as the customs clearance process. The technology involved in communication and scheduling of logistics, and the processes of provisioning a ship are explored,” Sadar expounds.

Explosive growth predicted

With more than 2,000 cruise line ports worldwide, the total number of voyagers globally is in the tens of millions and this volume requires a finite number of specific skills to orchestrate the success of each cruise.

“There is a big learning curve—it can take several years for a professional to understand the complexity of the cruise industry, which features so many different components beyond what hotels and restaurants require,” explains Fan who details the visa requirements of crew members, the logistics needed for supplies and the vendors and partnerships on shore for excursions, to name a few areas.

Every cruise line operates under the same external forces and pressures, which is why Fan stresses the need for the track.

Sadar agrees and says the curricula included will prepare qualified individuals for a career focused on their field of study rather than general education. It also provides an opportunity for current cruise line employees to further their education and prepare them for the next level of management. Moreover, she highlights that the program, delivered 100 percent online, will help streamline knowledge as the industry expands worldwide.

“With the global expansion of the cruise industry, our online program allows us to attract students from all over the world while using our location as the backdrop for our online courses,” Sadar says.

Expansion isn’t stopping

According to industry reports, China is the fastest-growing cruise market in the world and is expected to be the largest by 2030. There are 12 new departure ports and up to three new home ports slated for construction in China. Pre-COVID, it was projected that the Chinese cruise line market would host roughly eight to 10 million guests a year. 

But this kind of growth is nothing new to South Florida or FIU, states Cilli. He notes the longstanding partnerships the Chaplin School has with Carnival Cruise Lines and Royal Caribbean. 

The Chaplin School’s location is strategic. Florida is home to PortMiami, the No. 1 busiest cruise port in the U.S. More than 6.8 million passengers traveled through PortMiami in 2019, and the port is also home to 20 cruise lines berthing 55 ships. After PortMiami, Port Canaveral, No. 2, is home to 47 vessels. Port Everglades, No. 3, is home to 41 vessels. 

Jobs in the cruise line industry are plentiful

Even with the effects of the pandemic, in 2021, 28 new ships launched, and more than 17 new ships are on order to launch in 2022 and 2023. Experts indicate that pandemic-induced, pent-up demand for cruise line travel will propel the industry to new heights in the years to come.

FIU is in a unique position to offer real-time information and current case studies to instruct students on the most salient aspects of cruise line travel and operations today, affirms Cilli, who lists the vast range of positions that need to be filled in ports, headquarters, travel agencies and many other locations, aside from those onboard ships.

“The M.S. in Hospitality Management: Cruise Line Operations track takes this vast range of managerial pathways into consideration to prepare graduates for immediate application of their skills,” Cilli says.

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Bowkett Joins Ambassador as Business Development Manager

  • March 15, 2024

Ambition

Ambassador Cruise Line announced that Carly Bowkett has joined the cruise line as business development manager, according to a press release.

Reporting to Divisional Sales Manager Karen Cameron, Bowkett will have responsibility for trade sales in Scotland, the North of England and Northern Ireland. Bowkette joins Ambassador from Protected Travel Ship under PTS in Fleetwood, Lancashire, where she served as store manager.

  Karen Cameron, divisional sales manager at Ambassador Cruise Line, said: “I am delighted to welcome Carly to the Ambassador family. She is a confident, outgoing and enthusiastic addition to the team, and this will only benefit the brand as we look to continue providing our valued agent partners with all the support and tools they need. I’m confident that Carly’s arrival will see Ambassador go from strength to strength in the North as we look to serve both the business and our partners in the most effective and productive way possible.”

  In addition to the appointment of Bowkett, Ambassador has also announced that Audra Garner will be leaving her role in its Contact Center to join the Trade Team as a Trade Support Assistant. Garner was previously a sales consultant at Thomas Cook Retail. She will move into her new role on April 2 reporting to Trade Support Manager, Beth Barker.

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World Energy

Rosatom Starts Production of Rare-Earth Magnets for Wind Power Generation

TVEL Fuel Company of Rosatom has started gradual localization of rare-earth magnets manufacturing for wind power plants generators. The first sets of magnets have been manufactured and shipped to the customer.

cruise industry management

In total, the contract between Elemash Magnit LLC (an enterprise of TVEL Fuel Company of Rosatom in Elektrostal, Moscow region) and Red Wind B.V. (a joint venture of NovaWind JSC and the Dutch company Lagerwey) foresees manufacturing and supply over 200 sets of magnets. One set is designed to produce one power generator.

“The project includes gradual localization of magnets manufacturing in Russia, decreasing dependence on imports. We consider production of magnets as a promising sector for TVEL’s metallurgical business development. In this regard, our company does have the relevant research and technological expertise for creation of Russia’s first large-scale full cycle production of permanent rare-earth magnets,” commented Natalia Nikipelova, President of TVEL JSC.

“NovaWind, as the nuclear industry integrator for wind power projects, not only made-up an efficient supply chain, but also contributed to the development of inter-divisional cooperation and new expertise of Rosatom enterprises. TVEL has mastered a unique technology for the production of magnets for wind turbine generators. These technologies will be undoubtedly in demand in other areas as well,” noted Alexander Korchagin, Director General of NovaWind JSC.

For reference:

TVEL Fuel Company of Rosatom incorporates enterprises for the fabrication of nuclear fuel, conversion and enrichment of uranium, production of gas centrifuges, as well as research and design organizations. It is the only supplier of nuclear fuel for Russian nuclear power plants. TVEL Fuel Company of Rosatom provides nuclear fuel for 73 power reactors in 13 countries worldwide, research reactors in eight countries, as well as transport reactors of the Russian nuclear fleet. Every sixth power reactor in the world operates on fuel manufactured by TVEL. www.tvel.ru

NovaWind JSC is a division of Rosatom; its primary objective is to consolidate the State Corporation's efforts in advanced segments and technological platforms of the electric power sector. The company was founded in 2017. NovaWind consolidates all of the Rosatom’s wind energy assets – from design and construction to power engineering and operation of wind farms.

Overall, by 2023, enterprises operating under the management of NovaWind JSC, will install 1 GW of wind farms. http://novawind.ru

Elemash Magnit LLC is a subsidiary of Kovrov Mechanical Plant (an enterprise of the TVEL Fuel Company of Rosatom) and its main supplier of magnets for production of gas centrifuges. The company also produces magnets for other industries, in particular, for the automotive

industry. The production facilities of Elemash Magnit LLC are located in the city of Elektrostal, Moscow Region, at the site of Elemash Machine-Building Plant (a nuclear fuel fabrication facility of TVEL Fuel Company).

Rosatom is a global actor on the world’s nuclear technology market. Its leading edge stems from a number of competitive strengths, one of which is assets and competences at hand in all nuclear segments. Rosatom incorporates companies from all stages of the technological chain, such as uranium mining and enrichment, nuclear fuel fabrication, equipment manufacture and engineering, operation of nuclear power plants, and management of spent nuclear fuel and nuclear waste. Nowadays, Rosatom brings together about 350 enterprises and organizations with the workforce above 250 K. https://rosatom.ru/en/

cruise industry management

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Norway’s Massive Floating Wind Turbine Wall Will Be Funded by the Government This Year

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Highest Self-Supported Wind Tower Ever Built

IMAGES

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  3. The 2016 Cruise Industry In One Infographic

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  4. 2015 Cruise Industry Infographic. This infographic provides an overview

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  5. What is Ship Management?

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  6. Cruise Industry Management Assignment Help Service

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COMMENTS

  1. 2021 STATE OF THE CRUISE INDUSTRY OUTLOOK

    The reality of 2020 sits in stark contrast to the year that immediately preceded it. In 2019, the global cruise industry welcomed nearly 30 million passengers, creating jobs for 1.8 million people around the world and contributing over $154 billion to the global economy. With this growth came increased recognition of cruising as one of the best ...

  2. Carnival's Cruise Industry Recovery: Challenges, Progress, and

    Key Takeaways. Adapting to new protocols and navigating through variant waves are major challenges in the cruise industry recovery. Despite significant financial losses, Carnival Corporation has seen progress in occupancy rates and booking volumes, with 91% of ship capacity back sailing with passengers and booking volumes reaching the highest levels since the start of the pandemic.

  3. Chapter 8.1

    1. An Expanding Cruise Port System. With the growth in cruise shipping and businesses, cruise ports are gaining importance. The port is vital for assuring schedule reliability and allowing a continuous passenger (dis)embarkation and transfer to onward journeys and day excursions.

  4. The Cruise Industry Faces Challenges with Optimism

    The Cruise Industry Faces Challenges with Optimism. December 13, 2021 By: Amy Wang '24. The panelists and Dean Walsh as they began their conversation on the challenges faced by the cruise industry in the wake of COVID-19, and their efforts to overcome them. For a large part of the pandemic, U.S. cruise operations were suspended by the Centers ...

  5. Cruise Industry and Cruise Ships

    Premium Statistic. Revenue of the cruise industry in leading countries 2025-2028. Revenue of the cruise industry in leading countries 2025-2028. Leading countries in the cruise industry revenue ...

  6. The global cruise industry: Financial performance evaluation

    The cruise industry is the fastest growing sector of the travel industry, with demand estimated to grow at 7.0% per annum over the past decade, and cruise passenger surpassing the threshold of 30 mln. in 2019 (CLIA, 2020; Wondirad, 2019). At the same time, the business is seen to be extremely volatile and ever more highly capital-intensive.

  7. Cruise in 2022: the state of the industry

    Global spending across 60 major cruise markets increased by 65% YoY, resulting in total revenues of $19.4bn. Nevertheless, this was still far from pre-pandemic levels in 2019, which were approximately $29.8bn, 35% higher than 2021's figure. To reduce costs, many ships were retired between 2019 and 2021. Cruise ships are the most expensive ...

  8. Cruise Industry Faces Challenges of Sustainability and Crewing

    Cruise Industry Faces Challenges of Sustainability and Crewing. E-learning is providing a vital tool to address the crewing challenges (OTG) Published Jun 29, 2022 8:33 AM by The Maritime ...

  9. The Cruise Industry Stages a Comeback

    Together, Carnival, the world's largest cruise company, and the two other biggest cruise operators, Royal Caribbean and Norwegian Cruise Line, lost nearly $900 million each month during the ...

  10. Global and local pricing strategies in the cruise industry

    The cruise industry is a dynamic segment of the tourism sector which is currently experiencing high growth (20.5% between 2011 and 2016 according to CLIA 2017); however, there are plenty of challenges to overcome in order to consolidate revenues, maximize profitability, and ensure customer loyalty (Papathanassis 2017).The cruise industry is one of the most advanced segments of the tourism ...

  11. Why Third-Party Risk Management Matters to the Cruise Industry

    Third-party risk management (TPRM) is the process that enables an organization to identify, assess, manage, and monitor risks associated with third-party vendors, contractors, and other partners. It involves: Establishing a framework for risk assessment. Due diligence. Risk mitigation.

  12. Environmental Protection

    Cruise industry senior management has demonstrated its commitment to stewardship of the environment by establishing industry practices that will make CLIA's oceangoing members (CLIA Members) leaders in environmental performance. The purpose of this document is to describe waste management practices and procedures that CLIA Members agree shall ...

  13. Cruise Industry Restart: Dealing with Supply Chain Challenges

    false. The industry's restart continues to pick up aggressively and has been met with new challenges: shipping delays, freight costs skyrocketing and general supply chain headaches, giving cruise lines a host of new obstacles in addition to public health. In some cases, bacon has disappeared on certain days from certain ships, and some ...

  14. How cruise lines can manage scheduling and resources

    The global cruise industry is undergoing a period of rapid transformation. In a climate of increased consolidation and regulation, cruise companies around the world face a complex set of challenges when it comes to managing their vast crews and keeping their passengers safe. Optimising crew and resources, achieving economies of scale and winning market share in one of the world's fastest ...

  15. Royal Caribbean Group Transforms Waste Management in The Cruise

    MIAMI - July 11, 2023 - Royal Caribbean Group (NYSE: RCL) is building on its industry-leading waste management practices by introducing the next generation of technology to make its way to the high seas. These tools, from waste-to-energy systems, food waste applications and an expanded network of green hubs, are a result of the cruise company's relentless drive to deliver the best ...

  16. FIU launches world's first master's track in cruise line operations

    When he thought of creating the 12-month M.S. in Hospitality Management: Cruise Line Operations track, Joseph Cilli, department chair and director of distance learning for the Chaplin School of Hospitality & Tourism Management, envisioned it as a "flag in the sand" to make the cruise line industry synonymous with FIU. "We are leveraging the university's deep connections within the ...

  17. Cruise Industry News

    Norwegian Cruise Line Holdings reported financial results for the fourth quarter and year ended December 31, 2023 and provided guidance for the first quarter and full year 2024. Full Year 2023 Highlights: Generated total revenue of $8.5 billion, a 32% increase compared to the same period in 2019, with GAAP.

  18. Cruise Management & Operations

    Cruise Management & Operations. As the first ship management company to set up a dedicated cruise brand and team, V.Ships Leisure is uniquely placed to support the industry. Our services include all aspects of cruise management operations, from safety to crewing, technical to hospitality, in co-operation with Oceanic, to ensure we provide the ...

  19. Elemash-English Version

    Nuclear fuel produced since 1954. The factory was founded in 1917. PJSC MSZ fuel is delivered to 14 countries. WORLD-CLASS PRODUCTION. MSZ Machinery Manufacturing Plant, Joint-Stock Company. 144001, Karl Marx Str. 12, Elektrostal Moscow Region, Russian Federation, Tel: (495) 702-99-01 Fax: (495)702-92-21 E-mail: [email protected] www.elemash.ru ...

  20. Apollo offers $11 billion for Paramount's Hollywood ...

    Private equity firm Apollo Global Management APO.N has offered $11 billion for Paramount Global's PARA.O Paramount Pictures film studio, a person with knowledge of the offer said on Wednesday, adding to takeover interest in the media conglomerate. The film studio is considered the jewel of the Paramount media conglomerate, with an expansive movie library that includes classics such as "The ...

  21. Risk Management: Unique Challenges

    These include fire, flooding, piracy, security and the environment. In addition, cruise ships are subject to some unique risks, such as crowd control and crisis management issues, based on the large number of people onboard, Reams said. However, STCW (standards for training certification and watch-keeping) provides a basis for safety and people ...

  22. Bowkett Joins Ambassador as Business Development Manager

    Ambassador Cruise Line announced that Carly Bowkett has joined the cruise line as business development manager, according to a press release. Reporting to Divisional Sales Manager Karen Cameron, Bowkett will have responsibility for trade sales in Scotland, the North of England and Northern Ireland. Bowkette joins Ambassador from Protected Travel…

  23. SOYUZ, OOO Company Profile

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  24. ANTRACIT LLC Company Profile

    Industry: Management of Companies and Enterprises , Furniture and Home Furnishing Merchant Wholesalers , Lumber and Other Construction Materials Merchant Wholesalers , Holding companies, nec, Furniture See All Industries, Office and public building furniture, Floor coverings Construction materials, nec See Fewer Industries

  25. Rosatom Starts Production of Rare-Earth Magnets for Wind Power

    06 Nov 2020 by Rosatom. TVEL Fuel Company of Rosatom has started gradual localization of rare-earth magnets manufacturing for wind power plants generators. The first sets of magnets have been manufactured and shipped to the customer. In total, the contract between Elemash Magnit LLC (an enterprise of TVEL Fuel Company of Rosatom in Elektrostal ...