The Cruise Industry From Rags To Riches - Factors infleucung development and growth

Abstract

This paper provides an analysis of the growth and development of the Cruise Industry. Using a brief history of how the cruise industry began to where it is now. The author will examine the factors which have influenced the cruise industry over the decades to remain the fastest growing segment of the leisure industry. A pest analysis will be used to underpin relevant theory.

According to Vance (2008) in the early days of cruising, ships were simply a convenient mode of transportation to get from Point A to point B and it remained that way for several decades. Cruise ships played a critical role in everything transporting troops during World Wars I and II to bringing European immigrants across the Atlantic to the US.

Frey (2011) suggests the cruise industry is now the fastest growing segment of the travel industry achieving more than 2,100 percent growth since 1970, when an estimated 500,000 people took a cruise. Cruising was once considered an expensive way to travel and explore destinations. However with new companies entering the market and offering cruises at package holiday prices it is no longer just for the rich and famous.

Due to new products being introduced which satisfy all customer needs the number of cruise passengers is growing steadily. Cruise holidays are considered cheaper as major tour operators have entered the market. The latest figures from the Passenger Shipping Association (PSA), the trade body representing passenger shipping interests in the UK show that 1.65 million British people were expected to take a cruise in 2010 more than double the figure recorded in 2000.

According to Dale (2012) there are many well-established cruise operators across the world; with three companies now dominating the industry and accounting for over 80 per cent of all cruise bookings. Carnival is by far the largest cruise company in the world, followed by Royal Caribbean International (RCI) & Star Cruises.

Pest Analysis of the Cruise Industry

Political
Cruise liners take a risk when entering hostile waters with the event of pirates getting on board, in some cases overtaking the ship and getting it back to a hostile Country such as Somalia. Travel companies are now been forced to spend millions of pounds boosting their security systems in the wake of a surge of cases where pirates have targeted ships and passengers. Hough (2011).

Economic
The worldwide cruise market is estimated at 36.2 billion. The top two cruise companies Carnival and Royal Caribbean Cruise Limited account for 71.7% of worldwide share of revenue. A high amount of the revenue encountered for generates employment. According to Dale (2010) Cruising not only provides jobs for people working for the cruise lines, but also for restaurants, tourist attractions, tour operators and travel guides. The PSA estimates that cruising created 49,000 UK jobs in 2008. Cruising also contributes towards indirect employment. (Dale 2010)

Social
Windrosenetwork.com (2013) Change in customer tastes and preferences and the increase/decrease in technology, influencing people's lifestyle will see a further expectation for the Cruise Industry. From a social demographic point of view cruising trends were most popular among consumers aged 55 to 64 in 2011. However between 2011 and 2015, the numbers of this group are expected to change as the average age of consumer's decreases by 5 years. This means the cruise industry will attract younger consumers, who although have a high income have less leisure time and therefore will be wanting shorter breaks. This will not only see an increase in short stay cruises but also customer expenditure.

Technological
As the internet as become more accessible for online bookings more customers are choosing to do it themselves this has seen a fall in the traditional way of the travel agents. Technology has also paved the way for large, more manoeuvrable, robust vessels increasing carrying capacity; with new technological advances customers have easy access to internet which is particularly important for those business customers who are reliant on it.

The Cruise Industry shows signs of progress for the future. In 2013 6 new ships were added with a total passenger capacity of 14,074. From 2014 to 2015, a net of 13 more new cruise ships will come online adding 39,297 lower births or 8.7% to passenger capacity. The ships from 2014 to 2015 will add $3.2 billion in annual revenue to the cruise industry. Cruise Industry Overview (2012)

This report has highlighted the development of the Cruise industry over the years both benefiting the economy and securing a future. The cruise industry has become an important transportation for holidaymakers, with new technological advances it will continue to invent new ideas and initiatives which will further the demand for cruise holidays. With many job opportunities available it proves a successful sector to work within. The cruise industry will continually grow in the future and take pride within its established high performance.







Dale, G. (2010) BTEC National Diploma Level 3 Travel and Tourism - Book 2. Edexcel Limited

Frey, T. (2011) The Future of the Cruise Industry [online]. [Accessed 8 May 2013}. Available at: <http://www.futuristspeaker.com/2011/01/the-future-of-the-cruise-industry/>

Hough, A. (2011) British cruise ship pursued by pirates fitted with special security measures. The Telegraph [online] 12 January p.1 [Assessed 8 May 2013]. Available at: <http://www.telegraph.co.uk/news/worldnews/piracy/8258049/British-cruise-ship-pursued-by-pirates-fitted-with-special-security-measures.html>

Vance, G. (2008) The Cruise Industry. 4th ed. New York: Springer Science & Business Media

Windrosenetwork.com (2013) The Cruise Industry - Demographic Profiles [online]. [Assessed 4 May 2013]. Available at: <http://www.windrosenetwork.com/The-Cruise-Industry-Demographic-Profiles.html>.

I elected to comment upon this paper, as it provided a simplistic, but informative overview of a growing market within the Tourism industry. The author of the paper sought to display the cruising industry's growth, adopting the use of a pest analysis, so as to articulate how external forces shape and facilitate change within an industry which has been considered as somewhat elitist in the past.

This paper outlines the industry's beginnings from the off, utilising a contrast with the work of Vance (2008) and Frey (2011), in order to demonstrate just how the industry has evolved from a means of transportation, to the lavish but increasingly accessible mode of holidaying it is today. The author also makes use of statistics from bodies such as the Passenger Shipping Association to illustrate just how use of this particular market has increased, citing how between 2000 and 2010 that the amount of British people taking cruises doubled.

The author utilises a PEST analysis of the industry, as a means of discussing the respective political, economic, social and technological forces which have contributed to the industry.

Whilst this fulfils its purpose well, that is, it considers the factors individually; it could perhaps be taken further, somewhat more critically by including a suggestion as to what these forces mean for the industry, for example, would heightened security on cruise ships, sailing in 'treacherous' waters lead to higher, more sustained numbers of tourists purchasing the package? Furthermore, there could be a consideration as to what the industry has meant for the frequented ports. Has the mentioned economic benefit of the industry spread further afield into these destinations? Do tourists dispense with their money in these 'stops'?

This evidently suggests that the industry, like the tourism one itself, is one that is vast and can concern many parties. But this is not to take anything away from the author's contribution to the topic. This paper acts a building block and could perhaps be said to set the scene. Adding a further dimension to the work, though, would make it an even better read with another suggestion for improvement or further study being a direct focus upon one of the PEST sections, for example, undertaking an analysis of the economic ramifications of the cruising industry. Cruising, like any tourism activity is one that needs to be sustainable, so that it can meet differing needs of stakeholders, and again, this is something that could be considered for future work and reference.

Overall, the authors work acts as a means of illustrating the rise of the cruising industry, detailing its beginnings and illustrating its economic capabilities, alongside its financial performance. Whilst it sets the scene well, there is scope and potential for further, more detailed analysis into how it can affect port destinations, or whether there is potential for the age profile of visitors to drop further, in line with the emergence of package cruises.