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5. CONCLUSION 15
6. REFERENCES 16
A cruise can be explicated as an expedition by sea on a cruise liner for leisureliness. These
cruise ships normally docks at different ports through its excursion. A Cruiser (cruise ship tourist) is
a person who travels around the ship. A cruise ship voyages at good weather conditions and is
varied on the traffic in the port and the distances of destination, which the cruise ship has to cover.
Rather than going point-to-point tourists prefer to take part in leisure activities within the ship.
(Dowling R.K 2006). A cruise accommodate immense amounts of travelers.
Since the initial times of first passenger ship, the cruise ship industry has grown remarkably
well. This industrys development has incorporated excursion voyages, transatlantic travel, the post
war boom and advent of modern cruising (Dowling R.K 2006). Due to the growth of cruise ship
industry and this is one of the major areas of tourism growth.
The cruisers appreciate the gratification of having accommodation included in their travel
package. The accommodation that ship offer varies form 4 person rooms to lavish suites. Meals are
offered throughout the day from course meals to themed dinners. Hygienically stored outstanding
and variety of foods are provided onboard. After breakfast mid morning snack is provided and
lunch is followed by a cup of tea. All this and the dinner buffet are included in the fare. All cruise
ships has bars & lounges onboard and alcoholic beverages are not included in the fare. Usually the
bars are closed when the ship is docked, this would encourage the tourist to spend money at the
destinations, which they have docked.
2.1 Competition
Primary competition for royal Caribbean cruise is Carnival Corporation and Norwegian
cruise line. The PowerShares Dynamic Leisure and Entertainment Portfolio, 5.5% holds by royal
Caribbean cruises, 5% by Carnival Corporation & 2.8% by Norwegian cruise line holdings.
According to my research, other than competing with other cruise liners royal Caribbean
cruise line is also competes with land based vacation alternatives as well. Including resorts, hotels,
theme parks, casinos, & organized tours etc. (Cederholm, Market Realist, 2015)
Royal Caribbean gain revenue from passenger ticket revenue & onboard and other revenue.
Passengers ticket included for various cruise activities and facilities and also for passengers air
Royal Caribbean cruise line operates nearly 21 ships with a volume of 59,650 berths and
carries 3.5million guests sourced form more than 217 countries in 2013. The cruise offers duration
of two to 18 nights, which is much more longer than seven-day cruises which is offered by other
existing brands. This is the reason where royal Caribbean cruise reaches upper and end of the
contemporary brand and is therefore able to attract customers from the first-class segment who
would like to have longer cruise length. (Cederholm, Market Realist, 2015)
2.4 Sailings
Alaska
Asia
Bahamas
Bermuda
Australia
New Zealand
Canada
New England
Caribbean
Cuba
Europe
Hawai
Pacific Northwest
Panama Canal
Repositioning
South Pacific
Transatlantic
Transpacific
In 1972 Carnival Corporation incorporated in panama, which is the biggest cruise company
in the globe. The organization operates 101 cruise ships that travels to most popular destinations in
Europe, Americas, Australia, & Asia under 10 brands. Carnival corporation has a world market
share of ~47%. (Cederholm, Market Realist, 2015)
Cruise line international association explains between 2003 and 2013, 5% of worldwide
tourists travel to their destinations by water, cruise & ferry. While land based tourism has increased
by 57%, 77% of demand has been gained by the cruising industry.
Compound annual growth rate (CAGR) of cruise guests has increased 5% 22million in
2013. CAGR of carnival cruises and Plc. cruise passengers has increased of 4.6% between 2007 and
2013, close to world industrys growth of 5%. (Cederholm, Market Realist, 2015)
3.2 Competition
More than 80% of global passengers accounts for these three major cruise liners the carnival
corporation, Royal Caribbean cruises Ltd, and Norwegian cruise line holdings. According to
findings the carnival corporation carries a market share of 47%, followed by the royal Caribbean
cruise carries a market share of 23% and Norwegian carries 10%. The competitive advantage of
Carnival Corporation is due to scale. 101 ships are being operated. Where royal Caribbean cruise
operate 41 ships its closest competitor. (Cederholm, 2015)
Small players in the industry such as MSC Cruises, Disney cruise line and Thomson cruises.
According to the chart above carnival corporation market share has decreased from 50% in 2008 to
47% in 2013. (Cederholm, Market Realist, 2015)
3.3 Revenue
75% of Carnival Corporations total revenue is included in the passenger ticket fare. The
fare is included with the sale of air and other transportation. A cruise provides transportation to
various destinations and also it also stipulates accommodations, food choice, daily entertainment
option which they are more cost effective than land based retreats. (Cederholm, Market Realist,
2015)
Such Activities & facilities are onboard which includes nightclubs, bars, lounges, theater
shows, movies, libraries, health clubs, swimming pools, and much more. These recreation activities
and facilities are included in the ticket price. Other competitors such as royal Caribbean and
Norwegian cruise also derive more than70% of their income form passenger ticket fare.
Some onboard activities arent apart of the passenger ticket price. Such as non-alcoholic
beverages, alcoholic beverages, short excursion, casino, gift shop laundry, service spas and other
Norwegian Bliss
Norwegian Escape
Breakaway Class
Norwegian Breakaway Norwegian Getaway
Epic Class
Norwegian Epic
Dawn Class
Sky class
Norwegian acquired by Genting Hong Kong Limited (Star Cruises Ltd). Acquisition of
Norwegian, Star Cruises became the third largest cruise line in the world. While 100% of ownership
owned by star company embarked on expansions, onboard product enhancement and innovation.
Apollo Management a private equity group agreed
to invest $ 1billion cash equity in Norwegian in august
2007. Apollo has 50% of ownership of Norwegian and
majority of the companys board with certain rights
retains by star company in 7th January 2008.
Norwegian cruise line holdings broadcasted that
its has agreed to acquire Prestige cruises international Inc. in 2014, the market leader in the niche
cruise segment and parent company of Oceania Cruises & Regent Seven Seas Cruises. NASDAQ
Stock exchange officially listed Norwegian Cruise Line under NCLH(Norwegian Cruise line
holdings, Ltd) in 2013. (Norwegian Cruise Line, 2014)
Unique Features; The organization delivered the utmost innovative ship to date , 4 000
passenger ship Norwegian getaway on the 10th January 2014. The lines ship hull artwork from
Miamis own David LEBO Le Batard and offers cruisers exceptional dining & entertainment
offerings including seafood restaurant Ocean blue by Iron chef Geoffrey Zakarian; a bakery by
Buddy Valastro star of TLC series. (Norwegian Cruise Line, 2014)
Freestyle Cruising offered by Norwegian gives the cruises the freedom and flexibility to
do what the cruises want, when they want. Convene to a four-course meal or snatch a burger hot off
the grill, dress up or dress down, sit with friend or make new friends, more and more dining options
and cruisers are free to enjoy them at their own schedule. (Ship detective LLC, 2017)
Cruise fare includes meals in 2 main feasting rooms, help your self buffet, variety casual
cafs, grills and ongoing choices. (Ship detective LLC, 2017).
The companys dive in snorkeling program was the first of its kind in industry, out
island; Norwegian was the first cruise liner to provide such an experience at great Stirrup Cay, its
private island in the Bahamas. (Ship detective LLC, 2017)
Norwegian was the first in the industry to offer big name entertainers and full Broadway
production within fully equipped theaters. (Ship detective LLC, 2017)
Norwegian s childrens programme; created for junior cruisers ages 2-17, the kids crew
programs offers organized activities, games, parties and menus. (Ship detective LLC, 2017)
First ice bar at sea; Norwegian launched its modest and innovative Norwegian epic in June
2010, which features the first true ice bar at the sea with a bar, walls, tables, stools, glasses & life
size sculptures all made from ice. (Ship detective LLC, 2017)
4.6 Sailings
Alaska
Asia
Australia
New Zealand
Bahamas
Florida
Bermuda
Canada
New England
Caribbean
Cuba
Europe
Hawai
Mexican Riviera
Pacific Coastal
Panama canal
South America
Transatlantic
In conclusion, the cruise industry is becoming a major impact on world tourism industry,
where there are many cruise liners are rapidly expanding their fleets to its customers. Cruise ship
industry has been identified which provides a great strong opportunity to enhance overall
attractiveness of the industry. As an effect of this we can see that carnival corporation faces the
challenge to remain the market leader and retain their customer base in a saturated market.
People in the era of 21st century expectations are different where as they simply focuses on
how unique the product is and the low cost where as customers no longer focus on the products
function and features of it.
Slow responsiveness to industry trends, customer demands and lack of commitment to their
stakeholders will result decrease in growth of the liner. If a company wants to retain their market
share, should attain to maintain continuous innovation will help the organization to sustain.
Cederholm, T. (2015, January 22). Market Realist. Retrieved July 27, 2017, from Market
Realist: http://marketrealist.com/
Cederholm, T. (2015, January 14). Market Realist. Retrieved July 27, 2017, from Market
Realist: http://marketrealist.com/
Norwegian Cruise Line. (2014, September 2). Corporate Overview. Retrieved July 27, 2017,
from Norwegian Cruise Line: www.ncl.com
Ship detective LLC. (2017). Shipdetective LLC. Retrieved July 27, 2017, from Shipdetective
LLC: http://www.shipdetective.com/