Monopolies at Sea: The Role of Onboard Sales for the Cruise Industry’s Growth and Profitability

Vogel, Michael P.

doi:10.1007/978-3-7908-2725-5_13

Cited by 20 publications

(29 citation statements)

References 15 publications

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“…For example, as reported by the Florida-Caribbean Cruise Association (FCCA), during the 2005-2006 cruise years the average per cruise passenger spending per port of call was $98.01, and average spending per port of call by crew members was $74.56 (Brida and Zapata, 2010 Source: CLIA (2014) Some researchers pointed out that, to a growing degree, cruise lines depend on increasing on-board revenues in order to maintain profitable operations. Thus, cruise ships tend to stay in a given port for a relatively short period, forcing their passengers to spend most of their time on board (Klein, 2005;Vogel, 2011). Larsen et al (2013) noted that cruise passengers spend significantly less at their destinations than other tourists.…”

Section: Expenditures Generated By Cruise Tourismmentioning

confidence: 99%

“…The image of cruise tourism has changed in recent years from a luxury market to a mass market, targeting a wider and younger clientele. High occupancy rates are maintained through price reductions that are compensated for by increased customer volume and enhanced on-board spending (Vogel, 2011;Tuta and Micu, 2015). This study aims to explore the Omani cruising market in relation to worldwide cruise industry dynamics.…”

Section: Introductionmentioning

confidence: 99%

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Cruising Market in Oman: Current Trends and Future Perspectives

Atef¹,

Balushi²

2017

JTHM

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The worldwide cruise industry has expanded over the past decades.For many countries, it has become a significant source of income. Cruising is considered as a holiday that gives a "flavour" of each country, albeit a brief one, so if interested, the country or region could be visited another time for longer period.Cruising companies have succeed in attracting more customer segments by offering a wide range of durations, itineraries, and prices. Prices vary according to the time of year, itinerary and level of luxury. The 1990s witnessed the beginnings of cruising to Oman's three main ports: Salalah Port in Dhofar governorate, Sultan Qaboos Port in the capital, Muscat, and Khasab Port in Musandam Peninsula.This study aims to explore the Omani cruising market in relation to worldwide cruise industry dynamics. To achieve the aim of the study two objectives were identified:To portray the worldwide cruise line industry, To assess the status of cruise tourism in Oman. Disputes about the economic benefits of cruising have been raised; Who is getting the benefit? Is it the destination ports or the locals? Cruise tourists spend less money and time in Oman than other tourists, but the assumption that a short, professionally handled experience in Oman would bring them back for longer visits cannot be underestimated. As a cruising destination, Oman has great potential for growth and development in the future.

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Section: Expenditures Generated By Cruise Tourismmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Cruising Market in Oman: Current Trends and Future Perspectives

Atef¹,

Balushi²

2017

JTHM

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“…At the same time, profitability has been preserved thanks to economies of scale guaranteed by mega ships, savings in labour costs, offshore registrations and the emergence of new extra-ticket revenue centres (Klein, 2006). Nowadays, a cruise ship can be considered a "floating resort" as it includes all the facilities and activities of a tourism destination and the data show that extra revenues associated with such add-ons are the main source of profitability for firms (Vogel, 2011(Vogel, , 2009). …”

Section: Datamentioning

confidence: 99%

Add-On Pricing: Theory and Evidence from the Cruise Industry

Savioli

Zirulia

2015

SSRN Journal

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In many industries, firms give consumers the opportunity to add (at a price) optional goods and services to a baseline product. The aim of our paper is to provide a theoretical model of add-on pricing in competitive environments with two new distinctive features. First, we discuss the choice of offering the add-on, assuming that this entails a fixed cost. Second, we allow firms to have a varying degree of market power over the add-on, associated with the ability to capture the value that consumers obtain from such an additional good/service. Our model shows that the conventional wisdom, according to which offering the add-on should unambiguously lower the price of the baseline product, is not always supported. In asymmetric equilibria, in which only one firm offers the add-on, baseline prices are higher if the firm's market power over the add-on is limited. The predictions of the model are confirmed by a hedonic price model on a dataset of cruises offered worldwide.

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“…The cruise industry is considered to be one of the fastest growing segments of the tourism industry in the world (Hosany & Martin, 2012;Vogel, 2011b;Weaver, 2008). The increasing popularity and profitability of the cruise industry has led to an increase in competition which has required cruise lines and destinations to adapt their business models (Aggett, 2011;Coleman, Meyer, & Scheffman, 2003;Kwortnik, 2006;Perucic, 2007;Sun, Jiao, & Tian, 2011).…”

Section: Background To the Studymentioning

confidence: 99%

“…Although studies that are focused on specific regions or sample characteristics have their place, developing research methods applicable to the industry as a whole-that identify push and pull factors representative of cruising and cruise destinations in general-will allow future research to be conducted in a more efficient manner and permit comparisons across cruise regions and sample groups. Many studies in the literature have obtained relatively-large samples that represent more than a single geographical region or cruise market by utilizing online panel surveys (CLIA, 2008(CLIA, , 2011bHung & Petrick, 2010, 2011a, 2011bXie, et al, 2012). This approach has been adopted in the present study, which thus addresses a number of the limitations and gaps found in the literature in order to produce more generalisable results and develop a more complete understanding of the push and pull factors that relate to cruise tourism.…”

Section: Limitations Found In the Cruise Literaturementioning

confidence: 99%

Cruise tourists’ perceptions of destination: Exploring push and pull motivational factors in the decision to take a cruise vacation

Whyte¹

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Cruise tourism is an increasingly popular and profitable industry that has been experiencing growth rates since the 1980s that are greater than the travel industry as a whole. Despite this growth, research about cruise tourism remains relatively underrepresented in the academic literature, with limited research into the motivational factors that influence the decision to take a cruise vacation. This research explores the motivational factors that influence the decisions of tourists to take a cruise vacation by using the push-pull framework. Push factors are the internal psychological motives that drive the need or desire to travel (Crompton, 1979) while pull factors are the specific attributes of the cruise destination (onboard and onshore) that draw tourists towards a specific cruise line, ship, or destination.Research was conducted using a mixed-methods approach in a three-stage sequential design. In the first stage of research, one-on-one interviews (20 participants) were conducted to explore participants' personal constructs of destination image in the context of cruise vacations. RepertoryGrid Analysis and open-ended questions were used to identify the onboard and onshore attributes that travellers use to compare and differentiate between cruise vacations. The responses were presented from the cruise travellers' point of view, representing personally relevant criteria that are used in the decision-making process (Coshall, 2000;Hankinson, 2004;Young, 1995).These results were then used to create a new measurement scale for cruise destination attributes that accounts for the unique aspects of cruising and that allows researchers to separately measure the importance of both onboard and onshore attributes.In the second stage, online surveys (344 participants) were conducted to refine the list of attributes elicited from Stage 1 to a quantity that is suitable for inclusion in a quantitative survey instrument in Stage 3. The online survey also tests the ability of the instrument to determine the relative importance of onboard and onshore attributes in tourists' choice of a specific cruise.The refined cruise destination attribute scale in the Stage 3 online study (503 participants) permitted, for the first time, an effective measurement of the relative importance of onboard and onshore attributes in tourist choices of a specific cruises. The results revealed that, when deciding on a cruise vacation, the majority of travellers place greater importance on the onboard attributes than on the onshore attributes. This supports the recent development by the cruise industry of new ships that are self-contained destinations, and of marketing campaigns that position the cruise ship as the focal point of cruise vacations, with cruise destinations being of secondary importance (Weaver, 2005c;Weeden et al., 2011;Wood, 2000). Although onboard attributes were of greater importance overall to many participants, this was not true for all. Further analysis identified three distinct groups: firstly, the onboard preference gro...

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Monopolies at Sea: The Role of Onboard Sales for the Cruise Industry’s Growth and Profitability

Cited by 20 publications

References 15 publications

Cruising Market in Oman: Current Trends and Future Perspectives

Cruising Market in Oman: Current Trends and Future Perspectives

Add-On Pricing: Theory and Evidence from the Cruise Industry

Cruise tourists’ perceptions of destination: Exploring push and pull motivational factors in the decision to take a cruise vacation

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