Cruise Tourism: Development, Growth, and Major Corporations

This essay discusses the development and growth of cruise tourism in the global scenario, highlighting the three major cruise corporations present in the market, namely the Carnival Corporation, the Royal Caribbean Cruises, and the Norwegian Cruise Holdings. It also provides a detailed overview of the Carnival Cruise Line, one of the prominent cruise lines in the contemporary period. The essay explores the advantages of cruise vacations and the global impact of the industry.

Running head: CRUISE TOURISM
Cruise Tourism
Name of the Student
Name of the University
Author Note

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Introduction
The tourism industry, over the decades, have grown significantly, in the global
scenario, in terms of its geographical expanse, revenue generation, operational framework as
well as in terms of an increasing number of people across the world, availing these services.
Cruise tourism is one of the fastest growing component of this already flourishing industry,
which has contributed in huge development of the cruise ship industry over the years (Chin,
2008). The essay tries to discuss the development of the global cruise ship industry in the
light of the impressive growth of tourism industry in general and cruise tourism in particular.
It also tries to highlight the three major cruise corporations present in the global scenario,
namely the Carnival Corporation, the Royal Caribbean Cruises and the Norwegian Cruise
Holdings, comparing them with one another and in the last section the essay tries to provide a
detailed overview of one of the prominent cruise lines in the contemporary period, namely
the Carnival Cruise Line.
Tourism industry
International phenomena like Globalization, internationalization of businesses,
awareness about different places and their utilities, technological innovations and building up
of robust communication and transport channels both intra-countries as well as inter-
countries have been increasingly facilitating domestic as well as international tourism, which
in turn has resulted in the extraordinary growth of the industry in the global framework, as
can be seen from the following figure:

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Figure 1: Contribution of the tourism industry in the global economy (2006-2017)
(Source: Statista, 2018)
As is evident from the above figure, over the years, the industry has grown
significantly, thereby contributing increasingly and consistently to the growth of the global
economy. Currently, the tourism industry is considered to be one of the fastest growing
industries in the global scenario, generating nearly 12% of the international Gross Domestic
Product (Cabiddu, Lui & Piccoli, 2013). The industry is also one of the primary employment
generator across the globe, both directly as well as indirectly, as is evident from the following
figure:

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Figure 2: Global employment generated by tourism industry over the years
(Source: Itb-berlin.de, 2018)
The number of employment being nearly 260 million (8.7% of total global
employment) in 2012, is expected to rise as to almost 328 million (9.8% of total global
employment) by 2022.
As can be seen from the above discussion, the tourism industry has been consistently
growing at an impressive pace and with time, the industry is incorporating huge variations,
genres and types of tourism with the changing preferences and tastes of the customers across
the globe (Brotherton, 2012). One of such genres of tourism, which has gained immense
popularity and experienced considerable dynamics over the years, is cruise tourism.
Growth of the cruise ship industry and cruise tourism
Cruise tourism is the fastest growing component of the global tourism industry.
Although travelling by ship is not a new phenomenon and was once the only way to travel
across counties, however, in the recent years, cruise travelling has taken the shape of mainly
pleasure travelling and vacationing, thereby gaining immense popularity, especially among
the millennials, who tend to seek for new experiences (Papathanassis, 2009). The economic

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growth of most of the countries resulting in an increase in the standard of living of the
residents has also contributed to increased affordability and increased numbers of pleasure
travels, which has positively affected the cruise tourism industry. Over the years, the industry
has been experiencing a huge increase in the number of people availing their services, as can
be seen from the following figure:
Figure 3: Number of global passengers availing cruise services
(Source: Statista, 2018)
The significant increase in the number of customers availing the cruise ships services
across the world indicates towards the robust and rapid growth of the cruise ship industry
across the world. The increasing popularity of the Cruise Tourism and the ensuing success of
the cruise ship industry can be attributed to several reasons, the primary ones being discussed
as follows:
All in one vacation- The primary advantageous aspects of cruise tourism in that the customers
can enjoy an all in one vacationing experience by availing the service package of one cruise.
Cruise vacations consists of multiple destination visiting, without the hassle of packing and
unpacking and the cruise ships are also equipped with lavish entertainment, relaxation and
dining options (Dowling, 2011).

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Value- Due to the presence of every amenities under one package, as offered by most of the
cruise ships, cruise vacationing appears to be of great value and budget friendly for
vacationers, especially those looking for a wholesome family vacation.
Family Vacation Option- One of the primary advantages of cruise ships is that they have the
provision for the families to stay together and enjoy diverse vacationing experience. There
usually remains entertainment and vacationing options for all ages in a cruise ship. There are
childcare facilities in most of the cruise ships where children can enjoy fun activities and
games, along with various relaxation and entertainment options for the adults. There also
remains entertainment options which can be enjoyed with families (Cerić, 2018).
With the evolution of the “Ship Hotel” vacations, the cruise lines have modified their
itineraries substantially, with introduction of diverse ports of call, embarkation ports and
innovative facilities onboard, like multi-themed dining, diverse options of rooms and villas,
internet connectivity, game parlours and fun activities, clubs and spas, open air movies,
planetarium and many other modes of entertainment for all ages.
Growth of the Cruise Ship Industry
The above discussed facilities and advantages provided by most of the cruise ships
contribute considerably in the immensely increasing popularity of cruise tourism, which in
turn in facilitating the growth of the cruise ship industry. The cruise ship industry has been
catering to millions of customers every year with nearly thousands of operating locations, the
numbers increasing rapidly (Hwang & Han, 2014). The incredible growth of cruise ship
vacationing has led to creation of jobs, directly in the cruise ship industry itself as well as
indirectly in the industries with linkages to the same.

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Figure 4: Direct and indirect contribution of cruise ship sector in global and regional
economies
(Source: Cruising.org, 2018)
The cruise ship industry has achieved nearly 2000% growth since the 1970s and is
currently one of the fastest employment and income generator in the global scenario, as is
evident from the above figure. With the growth in the number of loyal customers, the cruise
line industry has been consistently increasing its passenger capacity. In the 1980s nearly 40
new cruise ships were built, while 80 new ships came in the industry in the next decade. The
numbers have been increasing in the current years and the ship sizes are also increasingly
considerably with time (CruiseShipJobsNetwork, 2018).
This has in turn resulted in the advent of considerable competition among the supply
side providers in the cruise ship industry, in the aspects of affordable pricing, varieties of
services provided, service quality as well as accommodation of as many passengers as
possible. In spite of the consistent increase in the number of passengers across the world,
there remains larger share of population among most of the countries (including that of the
USA, where only 20% of the citizens have went for cruise vacationing), who have not
travelled in cruises (Gmelch & Kaul, 2018). Thus, there remains immense scope of expansion
of the industry due to the presence of a huge untapped and unconquered global market, which

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may lead to considerable increase in the profitability, sustainability and prospects in the
cruise ship industry in future, along with the scope of increased competition and entry of new
supply side providers in the market.
Cruise Corporations
With the development of the cruise ship industry in the global scenario, there has been
an increase in the number of cruise line corporations, each owing a number of cruises and
operating at multiple locations, catering to a global population and their diverse demands.
These cruise line corporations have been increasing their domain or operations with time and
with the increase in the demand supply dynamics, the intensity of competition among these
corporations have also been increasing substantially (Cruisecritic.com, 2018).
However, in spite of the presence of a number of cruise line corporations across the
world, the market is roughly oligopolistic in nature, with three main cruise line companies
capturing the lions’ share of the total industry in the international scenario (Weaver & Duval,
2014). These three biggest and most popular cruise line corporations in the world are namely
the Carnival Corporation, the Royal Caribbean Cruises and the Norwegian Cruise Line
Holdings. The global market share of each of these dominating cruise lines can be shown
with the help of the following figure:
Figure 5: Company wise market share of the global cruise ship industry
(Source: Statista, 2018)

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It is evident from the above figure that the three cruise lines, Carnival, Royal
Caribbean and Norwegian Cruise Lines dominate the global cruise industry and together they
enjoy considerably higher revenue as well as share of clientele than all the other cruise lines
taken together. Among these three cruise corporations, the largest and most popular one is
evidently the Carnival Corporation, with its own share of global revenue as well as clientele
being higher than all the other cruise corporations in the global scenario.
All the three above mentioned cruise corporations are trend setters in the aspects of
what is referred to as luxury cruise vacations in the contemporary period. However, while the
cruise lines like Carnival and Royal Caribbean Cruises are known for elite and luxurious
cruising experiences, the Norwegian Cruise Lines, the relatively smaller one of the global trio
in the cruising industry, is a trend setter in freestyle cruising experiences, where there are no
pre-set meal times, seating arrangements or requirement for formal attires. This company is
especially famous among those travellers who seek for casual and budget cruising
experiences (Rodrigue & Notteboom, 2012). Each of these corporations own a number of
cruise lines and their cruises are usually divided into several classes based on the
destinations, number of days and the types of services availed by their customers.
The Carnival Corporation serves worldwide with an employee strength of 120,000,
followed by the Royal Caribbean Cruises who employ nearly 66,000 people for providing
services across the globe. All the three cruise corporations have been benefitted in the recent
periods by the lower prices of fuels, increasing demand for cruise vacations among customers
of developed countries and an increasing tendency of water traveling among the tourists from
Asia, Europe and the USA (Vogel, Papathanassis & Wolber, 2012). The performances of the
three cruise corporations over the last few years can be seen from the following figure:

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Figure 6: Comparison of performances of the three cruise lines in the last three years
(Source: Sharma, 2018)
As is evident from the above figure, the stock prices of all the three cruise lines,
especially Norwegian Cruise Line had been increasing consistently till 2016, which was
followed by a decrease in the price levels, much of which can be attributed to the
announcement of Brexit in 2016. However, the prices have increased post 2016, catching up
with the initially increasing trend. With the increase in the scope of venturing into the
untapped markets, the future of all the three cruise liners seem to be highly profitable and
prosperous.
The Carnival Cruise Line
In the contemporary period, one of the most popular as well as one of the largest
cruise line is that of the Carnival Cruise Line, which is one of the ten luxury cruise lines
owed by the largest cruise ship corporation in the world, the Carnival Corporation. With the
headquarters in Miami and with 26 ships, this cruise line carries nearly 4.5 million travellers
across the world each year (Schrandt, 2018). The cruise line has own accolades including that

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of Best Cruise Line for Millennials, for Families, for entertainment and many others. Being
one of the pioneers of leisure cruising, the Carnival Cruise Line is famous for its various
short itineraries and uniform services to all its guests.
Figure 7: Revenue (in millions) of Carnival Cruise Line (1990-2015)
(Source: Researchgate.net, 2018)
The huge increase in the revenue of the most popular cruise line can be attributed to
the continuous innovations and modifications of the cruising experience brought by this line,
the provision of family friendly cruising as well as the incorporation of one of a kind cruising
experience for the millennials and the solo travellers too. To attract people of all age group
and to surpass their land-based competitors the line provides facilities like multiple
destinations, multi-cuisine dining experiences, 24X7 Pizza services, dance clubs, casinos,
pubs, family programs and various other entertainment options. The cruise line also tries to
provide the same in affordable price ranges, which contributes to its long term customer
loyalty and sustainability in the industry (Klein, 2011). With less expensive and short cruise
vacations and with the Las Vegas style decors of its “Fun Ships”, Carnival Cruise Line is
highly popular among the Americans and is increasingly gaining popularity across different

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parts of the world in spite of the increase in competition due to the entry of many other new
cruise lines along with the old competitors already present in the global scenario.
Conclusion
From the above discussion, it is evident that cruise tourism has been continually
becoming one of the fastest growing component of the tourism industry in the world. With
increasing demand for cruise vacationing, the cruise companies across the world are enjoying
immense growth and prosperity along with the increase in the level of competition in the
industry. However, the global cruise industry is primarily dominated by three cruising
corporations, namely the Carnival Corporation, the Royal Caribbean and the Norwegian
Cruise Lines, each of which has immense scope of expansion given the huge untapped global
market left to infiltrate. The Carnival Cruise Line, belonging to the Carnival Corporation is
broadly considered to be one of the most popular cruise lines, which can be seen from its
increasing operational framework, number of clients served annually and increasing revenue
over the years.

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