Case study report 1

CASE STUDY REPORT

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Table of Contents
Introduction ..................................................................................................................................... 3
Historical perspective of Cruise Tourism ......................................Error! Bookmark not defined.
Growth of Cruise Tourism .............................................................Error! Bookmark not defined.
Future of Cruise Tourism ...............................................................Error! Bookmark not defined.
Expansion of Cruise Tourism ........................................................Error! Bookmark not defined.
Consumers for Cruise Tourism ......................................................Error! Bookmark not defined.
Recommendations ..........................................................................Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
Bibliography ................................................................................................................................. 14
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CASE STUDY REPORT

Introduction

The tourism industry has become essential for leisure and event activities. Additionally, this

segment has a large economy in the world. Nonetheless, many niche groups of tourism exist in

the tourism industry. These tourism products are essential for a particular audience as they are

tailored to meet their specific needs. Moreover, they assist destinations in differentiating

products of tourism and competing efficiently in a clustered environment of tourism. Cruise

tourism is one of the tourism product that is growing considerably in the tourism industry.

Nowadays, more people prefer leisure cruising. The historical perspective of cruise tourism will

be addressed in detail.

Historical perspective of Cruise Tourism

Cruise tourism is a highly advanced product of tourism that has emerged recently as a massive

industry. However, this tourism was not a significant industry in the past. According to Tarlow et

al. (2012, p.17), the biblical times have always displayed human beings as travelers. Moreover,

these travels have been for particular purposes such as escaping an advancing army or for

business purposes. Nonetheless, people started traveling for leisure on a later period. In fact,

Tarlow et al. (2012, p.17) assert that tourism began after the urbanization time had begun as

agricultural societies had neither the resources nor leisure time for pleasure travel. The reality of

leisure travel began after urban centers had grown and hence, people saw the need for pleasure

travel. According to Qiu and Tingting (2014, p.170), the origin of the cruise was in the middle of

the nineteenth century. This new unique phenomenon was s because of an urban perspective.

The primary meaning of cruise meant the route and time-fixed big passenger ships, which were
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used on the ocean (Qiu & Tingting, 2014, p.170). More precisely, the initial value of the cruise

was based on the transoceanic transport of cargo, personnel, and mail.

The establishment of a passenger service in the cruise ship was attributed to some companies.

According to Jones et al. (2016, p.274), the United States based Cruise line called Black Ball

established the first oceanic passenger schedule between the United States and England in 1818.

This ship was concerned mainly for the comfort of the passengers. However, the navigation

Company called Peninsula and Oriental Steam also referred P & O embarked on leisure

excursions in the 1840s for passengers who traveled from England Mediterranean and Iberian

Peninsula ports (Jones et al., 2016, p.274). Previously, this company focused primarily on mail

delivery. Later in the nineteenth century, the quality of ocean experience for passengers was

improved. In fact, in the early 20th century, larger cruise ships were built for passenger comfort

and leisure activities (Jones et al., 2016, p.274). The ocean liners were luxuriously furnished and

were much more significant. However, the sinking Titanic in 1912 led to a reminder of the

severe damages that may occur during ocean travel and hence, led to the introduction of safety

standards of maritime that were much stricter (Jones et al., 2016, p.275). Eventually, the

construction of cruise ships was halted due to world war one, and many of the cruise ships were

used to carry troops.

Evidently, the First World War was a significant hindrance to cruise tourism. Nevertheless,

cruising for leisure regained its popularity and Laconia that owned Cunard cruise line designed

its own cruise that stayed for approximately 6 months in 1922 (Jones et al., 2016, p.275).

Nonetheless, some of the cruise ships were short-lived. During the Second World War, most

cruise liners were used for ferrying troops and were destroyed severely (Cerchiello, 2014, p.16).

When the Second World War ended, the aviation industry developed. Cruising declined due to
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aircraft development (Johnson, 2002, p.263). Therefore, the transatlantic cruises had to withdraw

their services due to the limited carrying capacity and speed. Nonetheless, in 1960, the

transatlantic cruise, which composed of pleasure converted into passenger ocean ships (Qiu and

Tingting, 2014, p.171). This period began for the innovation of modern day cruise ships. In fact,

the transatlantic cruise ship was equipped with all kind of equipment, leisure, entertainment,

vacation, and complete life making the industry of cruise tourism to expand gradually.

Ultimately, the market of cruise tourism began to mature, and its value began to show.

Evidently, the growing of this tourism in the consumption market had grown significantly.

Nonetheless, this rapid growth had to be catered for and therefore, in 1969, the first lines of new

cruise known as the Royal Caribbean and Norwegian cruise were founded in America (Qiu and

Tingting, 2014, p.171). In 1980, the structure of the market of cruise tourism gradually formed in

European and North America where the middle class that was emerging substituted the upper

class to be the primary consumer of tourism using cruise lines (Qiu and Tingting, 2014, p.171).

Ocean cruising developed considerably and became a dynamic and iconic niche within the

market of leisure tourism. The continual extending of cruise tourism enhanced the service and

products offered, leading to the development of new markets. Jones et al. (2016, p.275) assert

that the geography of cruising currently has embraced many destinations such as New Zealand

and Australia, Caribbean, Atlantic and Mediterranean islands, Alaska and Canada, Northern

Europe, Pacific and Asia, Antarctica and South America, Arabian Gulf and Dubai. Apparently,

this geography accounts for almost sixty percent of passengers using cruise ships in the world

(Jones et al., 2016, p.275). Currently, Royal Caribbean and Carnival Corporation cruise line

group are important representative companies of cruise tourism in the international market

(Lester and Weeden, 2004). They dominate cruise tourism in the cruising market.
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Growth of Cruise Tourism

Cruise tourism has been developing significantly in the leisure tourism. According to Juan

and Chen (2012, p.485), this segment has been increasing annually at the rate of 7.2 percent

since 1990, which is a double-figure after every decade. Although the growth is greatest in

America especially the Northern side, growth has been rapidly increasing at the rest of the world

in recent years. For instance, passenger numbers between 2006 and 2009 in North America

never changed yet other parts outside this region increased by 68 percentage (Klein, 2011,

p.107). Moreover, with the addition of ships, many nations are likely to increase the level of

growth in cruise tourism. For example, New Zealand has reported an average increase of 37

percent of cruise tourism annually, which is 513 percent from 1996 to 2010 (Klein, 2011, p.107).

Ultimately, it has grown from a niche product to a significant commercial entity.

The rapid growth of cruise tourism has been attributed to various reasons. According to Brida

and Zapata (2009, p.5), the development of cruise tourism is due to the redeployment of ships

that were older from North of United States to various locations like Europe , Asia, and

Australia. Additionally, the growth has been due to the construction of larger ships than the

previous ones (Weeden et al., p.26). For instance, Royal Caribbean and Carnival Cruise ships

first carried 724 and 1024 passengers respectively. However, the new ships currently carry six

thousand and four thousand passengers respectively. The growth of the ships has led to the

number of cruise lines increasing and thus has led to the establishment of new ports. Eventually,

the number of passengers has increased and hence, leading to the growth of cruise tourists.

Belize has had a two thousand increase in arrivals of cruise passengers between 1999 and 2009,

where it had an increase of 1591 percent in four years between 1999 and 2003 (Klein, 2011,

p.107). Furthermore, the Bahamas, Antigua, and Saint Maarten saw an increase in passenger
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arrivals between 110 and 120 percent (Klein, 2011, p.107). Evidently, this influx of tourists has

converted cruise tourism into a commercial entity in the market of global tourism.

Furthermore, the expenditure of cruise tourism has various effects on the regions and

economy within. According to Jones, Hillier, and Comfort (2016, p.276), the direct effect is

evident when suppliers sell services and goods to cruise operators or tourists. The expenditure of

tourists is received as revenue due to various suppliers like beverages and food, fuel, restaurants,

entertainment venues, shops and many others. Ultimately, this tourism is viewed as a commercial

entity when owners get profits, when employees are paid their wages, or when the government is

paid its revenue tax. Equally important, this industry can obtain financial development when

there are many cruise passengers (Dickinger and Zins, 2006, p.2019). For instance, in the United

States of America, ten million Americans in 2007 took a leisure vacation using cruise ships,

which represents 76 percent of the passengers using cruise lines in the world (Aguirre & Brida,

2008, p.1). Evidently, a large number of passengers spent in the cruise lines and thus brought a

lot of revenue to the cruise tourism.

Future of Cruise Tourism

The development of Cruise Tourism has become popular within the last ten years. However, it

has been affected by many macroeconomic problems. According to Research Centre for Coastal

Tourism (2012, p.11), the confidence of consumers is influenced strongly by financial crisis

especially from the Europe and United States. The political instability in parts of Africa such as

the North Africa also contributes to the crisis. Equally important, there are pirates and severe

natural disasters in the Gulf of Aden and the areas that surround it that act as threats (Research

Centre for Coastal Tourism, 2012, p.11). Evidently, all these elements have a significant

influence on the demand for cruise tourism and holidays at international and local level.
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Nonetheless, the market of cruise tourism is in North America, and it constitutes more than half

of the market in the worldwide while the second massive industry is in Europe. Therefore,

Europe is expected to have the greatest potential growth in the cruise tourism in the future

(Research Centre for Coastal Tourism, 2012, p.11). Nevertheless, this potential has not been

exploited fully. Cruise travel is expected to grow considerably in the nearby future due to the low

penetration, which offers great opportunities for future travel.

Evidently, the market of Europe is well represented by countries such as France, Germany,

Great Britain, and Italy. For instance, in the year 2010, 5.5 million passengers were transported

from the European port, which was a market share of about thirty percent (Research Centre for

Coastal Tourism, 2012, p.11). Consequently, cruise tourism comprises of a major engine for the

development of tourism and economy in Europe. Moreover, when approximately four percent of

jobs were added to the industry, the total number of employees of cruise market in 2010 summed

up to 300,000 (Research Centre for Coastal Tourism, 2012, p.11). Undoubtedly, cruise tourism is

showing a strong growth under circumstances that are difficult and inspires confidence for

prospects. The expectations for future for this industry are very promising. In spite of problems

posed by the crisis of the economy, cruise tourism has excellent prospects for growth in the

future.

Furthermore, cruise tourism has had its majority of customers coming from America

especially in North America. Nonetheless, the dominance of North America is beginning to

erode due to the fluidity of international markets, which has led to the shift in wealth of nations

(Barron and Greenwood, 2006, p.89). Moreover, shifting has been progressing towards the

European waters. In fact, many countries have realized that cruising is a significant means of

transport for leisure activities. Therefore, in the future, more companies are expected to
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strategize the realignment of their cruise ships towards the European ports and the rapidly

growing Asian ports (Frey, 2011). Ultimately, cruise tourism is expected to have a major

international load shifting in the nearby future. Additionally, the current cruise ships are

overwhelmed by uniformity such that they all resemble each other. However, people nowadays

are more inclined to choose a particular product or service through brand differentiation. In the

future, cruise companies are expected to identify themselves with a certain brand using corporate

sponsors to create for themselves a brand experience (Frey, 2011). For instance, a cruising ship

can align itself with Amazon and refer itself as an Amazon shopping cruise line to ensure the

passengers are attracted by particular products from Amazon and board the cruise ship.

In recent years, technology has been the core of most companies in the world. Cruise tourism

is also expected to embrace innovations in future for better leisure activities for the passengers

(Law et al., 2009, p.601). For instance, onboard networks that are wireless will give rise to

certain entertainment such as playing games via personal cell phones, photo competitions that are

ship based, audience voting and many others. Moreover, some cruise ships can use flying

drones activities such as storm monitoring, whale watching, weather analysis, and cloud

formation (Frey, 2011). Undoubtedly, such innovations are going to improve cruise tourism in

the nearby future. Equally important, short lead times are the future of cruise tourism (Frey,

2011). Previously, a passenger who would want to board a cruise ship would have been required

to book a ticket six to twelve months in advance. However, passengers nowadays can book a

ticket in less than two to one month in advance. Although switching destination and embarking

points require advanced planning, the process is much easier today than it was in the previous

years. In future, short lead times are expected during a ticket booking. Customer notifications

can occur rapidly and last minute bookings will become more manageable. Finally but
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importantly, creative cruise ship designs are expected in the future of cruise tourism (Frey,

2011). The more outrageous a cruise ship, the more profitable. Evidently, this perception will

pave the way for new extreme designs of cruise ships and operational strategies.

Expansion of Cruise Tourism

Undoubtedly, the market of cruise tourism is proliferating in the segments of the tourism

industry. According to Sciozzi et al. (2015, p.8), cruise tourism can provide essential chances to

countries developing that have harbor amenities as cruise lines attempt to look for new

destinations. However, the investments required in cruise tourism due to fierce competition and

accessibility form barriers to entrance. Moreover, it can result in adverse effects on the

destination such as environmental pollution (Cari, 2011, p.107). Nonetheless, this industry has

possible room for expansion. As stated earlier, the market for cruise tourism has experienced

exponential growth since cruise ships modernized in 1990 where it developed from 3.8 million to

approximately 22.2 million in 2015 (DOWLING, 2017, p.44). Apparently, this expansion is

expected to continue. CBI (2016) assert that the dynamic growth of this industry is expected to

expand significantly and reach more than 25.3 million customers of cruise ships in 2019.

Currently, there is a variety of greater choices when it comes to destinations of cruise ships. Due

to such development, cruise lines are in the process of searching for new destinations and

therefore, increase the possibility of further expansion of cruise tourism.

Furthermore, the possibility of expansion of cruise tourism is due to the growing demand

from countries in Europe. According to CBI (2016), the residents of Europe are interested in

exploring nature and culture in developing countries like Africa. Consequently, the European

passengers have led to the extension of cruise lines in developing countries since they have

developed into cruise ships target. Ultimately, cruise tourism can extend their seasonality when
 Case study report 11

they target such new groups in European countries. Moreover, some destinations have suitable

weather that makes it conducive to cruise tourism (Yasar, 2012, p.419). For instance,

Mediterranean and Caribbean areas. These regions are popular due to their seasonality and

weather for leisure activities. In fact, these two regions continue to dominate cruise tourism, and

some of the destinations within the Caribbean like Jamaica, Puerto Rico, Bahamas, Cayman

Islands, and Cozumel Islands have welcomed about one million cruise customers in 2014 (CBI,

2016). Evidently, the popularity of such destinations will lead to more cruise passengers and

thus, provide a significant room for expansion in cruise tourism.

Consumers for Cruise Tourism

The cruise ships never carried a significant number of people in previous years. Most of them

used to deliver mails and less significant number of passengers. According to Hritz and Cecil

(2008, p.169), cruise ships were used to carry about five hundred thousand passengers worldwide

in 1970. However, by 2011, these cruise lines have been estimated to carry approximately 16,

365,000 passengers (Avrami, 2013, p.10). Evidently, these figures indicate the rapid growth of

passengers using cruise ships over the years for their leisure activities. Nonetheless, the

passengers who used the cruise lines previously were not of the same class. Lallani (2017, p.3)

asserts that the cruise ship in its early stages was used by upper, upper-middle, and elite class

consumers. Apparently, consumers who used cruise lines before were supposed to be very rich.

However, after the establishment of the Carnival Cruise lines in 1972, which departed from

Miami, the middle-income consumers were later involved (Avrami, 2013, p.10). This cruise line

revolutionized the tourism industry of cruising as it introduced cruise lines that were regarded as

fun ships. Ultimately, these ships were responsible for revolutionizing cruise tourism industry as

they offered entertainment, themed dcor, shopping, and other amenities and activities, which
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made it to the main attraction (Avrami, 2013, p.10). Undoubtedly, this approach by Carnival

cruise lines was paramount to the change of consumers in cruise tourism. Currently, cruise ships

used in tourism are categorized into four primary classes. These include luxury, contemporary,

budget, and premium Avrami (2013, p.10). The contemporary and premium categories have

more consumers who belong to the younger and middle-income citizens, as they are not

expensive.

Recommendations

The industry of tourism has one of the largest sectors of economy with developments rates

that are extraordinary in the world. Many niche tourisms are growing significantly. Undoubtedly,

Cruise tourism is an example of a tourism product with the fastest growth in tourism. This fact

has led cruise market an attractive product for destinations found worldwide, and thus many

individuals seek to obtain part of the market. However, such growth can lead to other tourism

products that were there being eliminated such as wildlife tourism, ecotourism, and many others.

Growing cruise tourism without considering its negative consequence on other tourism products

would affect adversely. Therefore, when growing the cruise line industry, I would ensure

destinations meant for cruise tourism maintain primary cores of culture and nature. Policies

should be implemented to safeguard the culture and nature of the destination to protect other

tourism products like ecotourism (Gen, 2016, p.82). Additionally, I would approach the market

of cruise tourism with other stakeholders of tourism products. This approach will assist in getting

significant information in regards to the disadvantages and advantages of growing cruise tourism

where other products are available. It will enhance the other stakeholders give their input on how

their tourism product and cruise tourism can coexist without alienating each other.
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Conclusion

The historical perspective of cruise tourism has been addressed in detail. Undoubtedly, cruise

tourism industry is essential for leisure and event activities. Moreover, it has the largest and

fastest growth of economy in the world. However, cruise tourism was a small market in the

tourism industry, as ships were used mainly to deliver mails. Nevertheless, after the introduction

of passenger service, the cruise market began to proliferate. The rapid growth has also been

attributed to the redeployment of ships that were older from North of America to various

locations like Europe, Asia and Australia. Additionally, the growth of the ships has led to the

number of cruise lines increasing and thus has led to the establishment of new ports. Ultimately,

it has led to cruise tourism growing significantly.

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