Economic impact of cruise industry using regional input–output analysis: a case study of Incheon

Abstract

Asian countries are witnessing a newly emerging cruise industry. This study presents a methodology for estimating various aspects of the cruise industry's economic impact using regional input-output (I-O) analysis. The methodology is applied to a study of the Port of Incheon (POI) that highlights the effects on both the regional and national economies as well as the interaction between the two regarding production induction, employment, and value added. The effects are analyzed under both the current situation and a scenario that includes development of shopping centers and amenities in Incheon in the future. The overall economic impact of the cruise sector on Incheon is relatively small compared to the impact on well-established cruise markets. This is because POI functions as a port of call for cruise lines, instead of a base port or home port, and earns cruise-related revenue mostly from the expenditures of passengers and crews. Moreover, cruise ship visits to POI mostly benefit the Seoul economy in terms of added value and job creation. The development scenario provides much greater economic benefits to Incheon and therefore justifies future development by POI and the city government.

Port hierarchy and concentration: Insights from the Mediterranean cruise market

“…Rodrigue and Notteboom (2013) highlight the role of itineraries (i.e., the selection process of a sequence of ports of call) in the appeal of a cruise service, and our intention is to complement this work, focusing on the set of tourism experiences that city ports set up to address cruisers' needs. Our analysis-despite starting from a different viewpoints and studying different geographical markets-reaches conclusions comparable to those of Chang, Park, Liu, and Roh (2016): the impact of cruises on a port of call are strongly dependent on the investment made by the port city to welcome cruisers.…”

Efficiency analysis of major cruise lines

“…Braun et al (2002) used a regional input-output analysis to measure the economic impacts of cruise travels at Port Canaveral, based on the survey data of the spending of cruise lines, passengers and crews. A similar method was used by Chang et al (2016b) who estimated the economic impacts at the Port of Incheon. Notable contribution of the cruise industry was observed in terms of production, labor and value-added induced effects.…”

“…The substantial spending of cruise passengers, together with the high growth rates indicate that the cruise industry has great market potential. Therefore, policy makers and researchers have paid close attention to the economic impacts of cruise tourism at the national or regional level (Braun, Xander, & White, 2002;Dwyer, Douglas, Livaic , 2004;Chang, Park, Liu, & Roh, 2016b;Dwyer & Forsyth, 1998).…”

Importance and Satisfaction of Destination Attraction for Water-Based Tourism in Jeju Island

“…Until a few years ago, however, on the Korean peninsula the development rate was very low, and participation rates were low compared with the global trend Nevertheless, the Korean government is now at the planning stage for appreciating and utilizing marine resources' growth potential. In particular, it plans to nurture water-based tourism and cruise and marina industries into tourism service industries (Chang, Park, Liu, & Roh, 2016). As such, water-based tourism resources reflect Korea's spatial and socio-cultural characteristics.…”