No abstract

In this article, we try to make sense of the history of leisure cruising and of recent cruise product and marketing developments by interpreting them in the light of Zygmunt Bauman's concepts of solid and liquid modernity. Our aim is to understand the influence of liquid modernity on the coevolution of cruise demand and supply. We suggest that liquid modernity was a precondition for the cruise sector to grow out of its tiny elitist niche and to become the global business it is today, and that cruise tourism is a manifestation of liquid modernity.

Carnival and Royal Caribbean control two-thirds of the global cruise ship capacity. Although they share the same ambition to grow in Europe, they have never shared the same strategy. Carnival adopted a strategy of multiple decentralized local brands, each with its own capacities and prices, while Royal Caribbean chose a global brand, capacity and pricing strategy. However, Royal Caribbean's acquisition of Pullmantur in Spain, and the subsequent announcements of a dedicated cruise line for France and of a joint venture with TUI in Germany, mark a fundamental strategy change. Using microeconomic modelling, this paper investigates the rationale for that change.

In addition to introducing key aspects of cruise shipping economics, this chapter highlights the direction and extent of the transformation the cruise industry's dominant business model is undergoing, largely in response to cruise shipping's own success and growth. The chapter concentrates on the changing structure of cruise companies' revenues and costs to substantiate its claim that the cruise industry's dominant business model is in a process of profound transformation.

This chapter aims to contribute to a richer and more complex understanding of the demand for ocean cruises than that usually offered in industry studies and market research reports. Three perspectives on cruise demand are presented. The first perspective is largely quantitative and focuses on volumes, prices, distributions and time paths. It corresponds to the perspective conveyed by many market studies. The second perspective on cruise demand is psychological, emphasizing in particular two aspects that are characteristic for the cruise sector: high consumer involvement and repeat buying. The third perspective, finally, is sociological and interprets cruise demand and the value of cruises for passengers in the context of the postmodern age or, more precisely, of Zygmunt Bauman's concept of liquid modernity.