Presentation on theme: "Ship Happens… Costa Cruises: -25% bookings (May 2011/12)"— Presentation transcript:
0THE GEOGRAPHY OF CRUISE SHIPPING: ITINERARIES, CAPACITY DEPLOYMENT AND PORTS OF CALL Jean-Paul Rodrigue Dept. of Global Studies & Geography, Hofstra University, New York, USA Theo Notteboom ITMMA - University of Antwerp and Antwerp Maritime Academy, Belgium 5th Asian Logistics Round Table & Conference Vancouver, Canada, JuneTIMEFRAME: 25 minutes
1Ship Happens… Costa Cruises: -25% bookings (May 2011/12) Costa Concordia: A lesson that hubris can derail the safest structures.Costa Cruises: -25% bookings (May 2011/12)
2The Three Fundamentals of Cruise Shipping ItinerariesAttractiveness (seasonality)Customers availability and preferencesCapacity DeploymentType of shipDurationPorts of CallSequence and scheduleChoice of turn port
5Powered Transatlantic Passenger Modes and the Demise of the Liner Steamship1830s to 1960s (About 6 days; 4 days by the 1930s)Dirigible(About 80 hours)Sea Plane(About 15 hours)Propeller Plane(11 hours)Jet Plane1958- (7-8 hours); Supersonic jet ( : 3.5 hours)
6Liners and Jet Planes: Basic Economics SS France ( )4 days2,000 passengers (one way)Boeing (1970-)8 hours3,200 passengers (1 roundtrip per day)
9Cruise Source Markets, 2010Source: adapted from Cruise Lines International Association (CLIA),
10Revenue and Expenses per Average Cruiser, 2011 Source: Cruise Market Watch.Note: Excursions only cover those organized by the cruise line.On-board services: 20-30% of revenues
11The Global Cruise Port System Source: data adapted from Cruise Market Watch. Source: adapted from Cruise Lines International Association (CLIA),70%A Supply-Based Industry
12Full House: Occupancy Level of North American Cruises, 2004-2011
13Seven is the Magic Number: Duration of North American Cruises (in nights), 2011 Sweet Spot (47% of all cruises)Bahamas & Western Caribbean from FloridaSouth Pacific
14Share of Monthly Cruise Passengers by Region of Embarkation, 2012 Source: Cruise Market Watch.
15Share of Monthly Cruise Passengers by Region of Destination, 2012 Source: Cruise Market Watch.
16Number of Monthly North American Cruise Passengers by Destination, 2011
17Carnival Cruise Lines (49.2%) Royal Caribbean Lines (23.8%) Market Share of Main Cruise Lines, 2011: Horizontal Integration and the Illusion of DiversityCarnival Cruise Lines (49.2%)Carnival (21.1%)Costa Cruises (7.2%)Princess (6.4%)AIDA (4.4%)Holland America (3.7%)Other (6.4%)Royal Caribbean Lines (23.8%)Royal Caribbean (17.0%)Celebrity (4.7%)Other (2.1%)Others (27.0%)Norwegian (7.1%)MSC Cruises (5.8%)Disney (2.9%)Star Cruises (1.8%)Other (9.4%)Source: adapted from Cruise Market Watch.
18NETWORK CONFIGURATION AND PORTS OF CALL IN THE CRUISE SHIPPING INDUSTRY
19Key Cruise Itinerary Design Variables Customer-related considerations (demand)Optimal length of cruise, shore time/sail time balance‘Must see’ destinations, guest satisfactionSeasonalitySynchronization with air transfersSpending behavior and budgetOperational considerations (supply)Number and order of port callsDetermination of turn ports (+ synchronization with air transfers)Vessel speed and vessel sizeBerth capacity, accessibility of portsDistances between ports of callStrategic considerationsDemographics of customer baseItineraries of competing cruise operatorsAnticipation of growth marketsSupply push to create new cruise marketsRevenue-generating potential of daytrips, onboard facilities, etc..
20The Advantages of Mobile Assets: Types of Itineraries PerennialResilient demand (with high/low periods)Stable weather conditionsSeasonalPeriodic market potentialUsually summerRepositioningBetween perennial or seasonal marketsMostly between the Caribbean and the Mediterranean
21A complex vessel deployment strategy Silver Wind (Silversea Cruises), LOA = 157m, beam = 21.5m 296 guests in very luxurious conditionsSource: data adapted from Cruise Market Watch.No. of port callsSource: own compilation based on schedules
22Simple vessel deployment strategies Source: data adapted from Cruise Market Watch.
23Cruise Passengers Visits, Caribbean, 2011 Source: data adapted from Cruise Market Watch.
24Selected Cruise Itineraries, Caribbean 3-5 nights / 2-3 port callsGeographyHistory / CultureMarket proximity7 nights / 3-5 port calls
26Selected Cruise Itineraries, Mediterranean World class cultural amenitiesMarket proximityDiversified sub-regions
27Functional Typology of Cruise Ports Destination Cruise PortGateway Cruise PortBalanced Cruise PortThe cruise port is the sole destination.Limited, if any, excursions outside port area.The cruise port is not a destination, but a point of embarkment (turn port).Excursions outside port area.The cruise port is a destination and a point of transit for excursions.High quality cultural or physical amenities.No other significant amenities in proximity.Security and safety issues.No significant cultural or physical amenities.Port servicing major touristic destination.Various balances between the amenities offered at the port and in the region.Venice, Barcelona, Labadee (Haiti), Cococay (Bahamas)Civitavecchia, LivornoMiami, San Juan, Nassau, Piraeus, LisbonSource: typology expanded from Gui, L. and A.P. Russo (2011) “Cruise ports: a strategic nexus between regions and global lines—evidence from the Mediterranean”, Maritime Policy & Management, Vol. 38, No. 2, pp
28Most Active Cruise Ports by Passenger Visits, 2011 Source: data adapted from Cruise Market Watch.
29Is the Future Co-Location? Ensenada Cruiseport Village (HPH)
30Conclusion: Live by the Supply, Perish by the Supply? Unique characteristics of the cruise industry:Supply push strategy of cruise operators; ‘creating’ demand by providing new capacity (ships).Itineraries, not destinations. Specific regional and cultural experiences offered through a combination of sailing time and choice of ports of call.Expand and capture revenue streams by offering on board goods and services as well as shore-based excursions.Adapt to seasonal and fundamental changes in the demand; repositioning ships (seasonal) and changing the configuration of port calls (fundamental).