THE GEOGRAPHY OF CRUISE SHIPPING: ITINERARIES, CAPACITY DEPLOYMENT AND PORTS OF CALL
Jean-Paul RodrigueDept. of Global Studies & Geography, Hofstra University, New York, USA
Theo NotteboomITMMA - University of Antwerp and Antwerp Maritime Academy, Belgium
IAME 2012 ConferenceTaipei, September 6-8 2012
Ship Happens…
Costa Concordia disasterCosta Cruises: -25% bookings (May 2011/12)
Global Cruise Passengers Carried, 1990-2011
19901992
19941996
19982000
20022004
20062008
20100
2,000,0004,000,0006,000,0008,000,000
10,000,00012,000,00014,000,00016,000,00018,000,00020,000,000 Recession
• Cruise industry emerged in the late 1960s• Mass market using large vessels and adding more revenue-generating services
onboard. • Symbol of the globalization of the tourism industry (e.g. Weaver, 2005; Wood,
2000).
Cruise shipping in literature
• Cruise shipping in literature:- Seasonality of the world cruise market (Charlier and McCalla, 2006)- Industrial organization of cruise shipping (Papatheodorou, 2006)- Demand for cruise tourism (Petrick and Li, 2006), - Supply of cruise shipping (see e.g. Wilkinson, 2006 and Wood, 2000)- Economic significance of cruise tourism (Dwyer and Forsyth, 1996; 1998 and Dwyer,
Douglas, and Livaic, 2004) - Cruise ship passenger spending patterns (Douglas and Douglas, 2004) - Operational studies:
• Optimal routing of cruise ships (see e.g. Hersh and Ladany, 1989)• Cruise ship port selection process (Marti, 1990) • Optimal cruise-liner passenger cabin pricing policy (Ladany and Arbel, 1991).
- The service offerings and locational qualities of cruise ports:• McCalla (1998): site and situation requirements of cruise ports• Vagellas and Pallis (2010): different services provided by 20 European passenger ports• Gui and Russo (2011): structure of cruise value chains and the regional articulation of land-based
cruise services.
• Geography of cruise shipping remains an under-researched academic field in maritime and tourism studies.
Focus of paper
• This paper focuses on capacity deployment and itineraries in two major cruise markets: the Caribbean and the Mediterranean.
• We argue that:- the cruise industry sells itineraries, not destinations, implying a level
of flexibility in the selection of ports of call- The two cruise markets are interconnected in an operational
manner- Cruise ports can be classified based on the role they serve within
their regions.
The Three Fundamentals of Cruise Shipping
Itineraries• Attractiveness (seasonality)• Customers availability and preferences
Capacity Deployment• Type of ship• Duration
Ports of Call• Sequence and schedule• Choice of turn port
Market Share of Main Cruise Lines, 2011: Horizontal Integration and the Illusion of Diversity
Carnival 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%)
Full House: Occupancy Level of North American Cruises, 2004-2011
Less than 70%
80% 90% 100% 110% 120% 130% More than 140%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Occupancy Level
Num
ber o
f Cru
ises
Cruise Source Markets, 2010
North America
Continental Europe
UK
Latin America
Asia (w/o Japan)
Australia
Japan
0 2 4 6 8 10 12
10.781
3.409
1.560
0.984
0.890
0.370
0.195
Millions of Customers
The Global Cruise Port System
Caribbean
Europe/Scandinavia
Mexico Pacific/Hawaii
Transatlantic
0 5 10 15 20 25 30 35 40 45
42.723.0
8.56.7
5.75.3
3.12.9
Capacity in million bed-days
70%
A Supply-Based Industry
Most Active Cruise Ports by Passenger Visits, 2011
NassauCozumel
Fort LauderdaleMiami
CivitavecchiaSt. Thomas
Port CanaveralBarcelona
St. MaartenGrand Cayman
San JuanVenice
PiraeusSouthampton
DubrovnikRoatanLivornoJuneau
KetchikanKatakolo
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000
Cruise Passengers Visits, Caribbean, 2011
Cruise Passengers Visits, Mediterranean, 2011
Functional Typology of Cruise Ports
Destination Cruise Port Gateway Cruise Port Balanced Cruise Port
The 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, Livorno Miami, San Juan, Nassau, Piraeus, Lisbon
The impact of shoreside power/coldironing
• Large differences in CO2 emissions:- From 93 to 615 kg of CO2 per passenger-day- From 199 to 1,314 g CO2 per passenger–km
• Juneau in Alaska was the first (2001)• Obstacles:
- Challenges a city’s power grid - Investment costs (also for retro-fitting ships) - the cost of shore power- the absence of international standards for
shore power systems. • Environmental regulations in urban areas
=> move to less urban areas
Is the Future Co-Location? Ensenada Cruiseport Village (HPH)
Key Cruise Itinerary Design Variables
Customer-related considerations (demand)• Optimal length of cruise, shore time/sail time balance• ‘Must see’ destinations, guest satisfaction• Seasonality• Synchronization with air transfers• Spending behavior and budget
Operational considerations (supply)• Number and order of port calls• Determination of turn ports (+ synchronization with air transfers)• Vessel speed and vessel size• Berth capacity, accessibility of ports• Distances between ports of call
Strategic considerations• Demographics of customer base• Itineraries of competing cruise operators• Anticipation of growth markets• Supply push to create new cruise markets• Revenue-generating potential of daytrips, onboard facilities, etc..
$1,286
$208
$76 $38 $57
Revenue ($1,663)
TicketCasino & BarExcursionsSpaOther
$295
$217
$213
$193
$183
$160
$100
$73 $51
Expenses ($1,485)
OtherAgent com-missionShip fuel costsCorporate op-erating costsPayrollAmortizationFood & Bev-eragesOnboard servicesInterest
Revenue and Expenses per Average Cruiser, 2011
On-board services: 20-30% of revenues
Looking for Fuel-Efficient Routes:17 knots x 14 hours= 200 nm is ideal
The Advantages of Mobile Assets: Types of Itineraries
Perennial• Resilient demand (with high/low periods)• Stable weather conditions
Seasonal• Periodic market potential• Usually summer
Repositioning• Between perennial or seasonal markets• Mostly between the Caribbean and the
Mediterranean
Ship repositioning by Royal Caribbean Cruises
Northern hemisphere
Winter of 2011
Northern hemisphere
Summer of 2011
Caribbean 23 8Mediterranean 3 21South America 9 0Asia/Australia 4 1Alaska 0 5Baltic 0 4Bermuda/New England 0 3
Mexico (Pacific) 1 0Middle East 1 0Hawaii/Californ. 1 0Total 42 ships 42 ships
Seven is the Magic Number: Duration of North American Cruises (in nights), 2011
2 or less
3 4 5 6 7 8 9 10 11 12 13 14 15 and
more
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Number of Nights
Num
ber o
f Cru
ises
Sweet Spot (47% of all cruises)
Bahamas & Western Caribbean from Florida
South Pacific
Selected Cruise Itineraries, Caribbean
GeographyHistory / CultureMarket proximity
7 nights / 3-5 port calls
3-5 nights / 2-3 port calls
Selected Cruise Itineraries, Mediterranean
World class cultural amenitiesMarket proximityDiversified sub-regions
A complex vessel deployment strategySilver Wind (Silversea Cruises), LOA = 157m, beam = 21.5m
296 guests in very luxurious conditions
No. of port calls
Source: own compilation based on schedules
Silver Wind - Silversea Cruises
= West Med = Adriatic = East Med = Middle East = Southern Africa = Atlantic
Bar = Barcelona, CT = Capetown, Dub = Dubai, Ist = Istanbul, Lis = Lisbon, LP = Las Palmas, Mau = Mauritius, Mon = Monte Carlo, Pir = Piraeus, Rom = Rome (Civitavecchia), Saf = Safaga (Red Sea), Ven = Venice
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
April 2012 Rom
May West-Italy, Adriatic / 6 Ven Adriatic, Aegean, Turkey / 7 Ist no service Ist Turkey, Aegean / 9
June Pir Aegean, West-Italy / 7 Rom no service Bar Spain, West-Italy / 7
July Ven Adriatic, Aegean, Turkey / 8 Ist Turkey, Black Sea / 9 Ist Turkey, Aegean, Near East / 9 Pir
August Aegean, Adriatic / 8 Ven Adriatic, West Italy, South-France / 8 Mon West-Italy, Adriatic / 7 Ven Adriatic, Aegean / 9
September Pir Aegean, Turkey / 7 Ist Turkey, Black Sea / 7 Ist Turkey, Aegean / 7 Pir Aegean, Adriatic / 6
October Ven Adriatic, Aegean, Turkey / 7 Ist Turkey, Aegean / 9 Pir Aegean, Turkey, Near East / 11 Ist
November Aegean, Turkey, Near East / 11 Pir Aegean, Red Sea / 6 Saf Red Sea, Gulf / 3 Dub
December Middle East / 4 Dub Middle East, India, Southern Africa / 8 Mau Southern Africa / 8
January 2013 CT Southern Africa / 6 CT Southern Africa / 6 CT Southern Africa / 6
February CT Southern Africa, West Africa, Canary Islands / 7 LP Canary Islands / 7
March LP Canary Islands, West-Atlantic / 9 Lis Spain, South France, West Italy / 8 Rom West Italy, Aegean / 9 Pir
April Aegean, Near East, Turkey / 11 Ist Turkey, Aegean / 8 Pir Aegean, West Italy / 8 Rom
May West Italy, Adr. / 7 Ven
Number of cruises = 37Averate number of nights = 9.5 Standard deviation = 2.5Average number of port calls = 7.6 Standard deviation = 1.8
Simple vessel deployment strategiesFreedom of the Seas - Royal Caribbean Cruises - LOA of 339m, beam of 39m - maximum capacity of 4,370 passengers
Period Nights Ports of call and order of calls RegionApr 29 to May 6, 2012 7 Port Canaveral - Labadee - Falmouth - Grand Cayman - Cozumel - Port Canaveral CaribbeanMay 6-13 7 Port Canaveral - Cococay - Saint Thomas - Saint Maarten (Phillipsburg) - Port Canaveral CaribbeanMay 13-20 7 Port Canaveral - Labadee - Falmouth - Grand Cayman - Cozumel - Port Canaveral CaribbeanMay 20-27 7 Port Canaveral - Cococay - Saint Thomas - Saint Maarten (Phillipsburg) - Port Canaveral Caribbean
………………… same two cruises repeated all year roundApr 7-14, 2013 7 Port Canaveral - Cococay - Saint Thomas - Saint Maarten (Phillipsburg) - Port Canaveral CaribbeanApr 28 to May 5, 2013 7 Port Canaveral - Labadee - Falmouth - Grand Cayman - Cozumel - Port Canaveral Caribbean
Allure of the Seas - Royal Caribbean Cruises - LOA of 360m, beam of 65m - maximum capacity of 6,360 passengers
Period Nights Ports of call and order of calls RegionApr 29 to May 6 7 Fort Lauderdale - Nassau - Saint Thomas - Saint Maarten (Phillipsburg) - Fort Lauderdale CaribbeanMay 6-13 7 Fort Lauderdale - Labadee - Falmouth - Cozumel - Fort Lauderdale CaribbeanMay 13-20 7 Fort Lauderdale - Nassau - Saint Thomas - Saint Maarten (Phillipsburg) - Fort Lauderdale CaribbeanMay 20-27 7 Fort Lauderdale - Labadee - Falmouth - Cozumel - Fort Lauderdale Caribbean
………………… same two cruises repeated all year roundApr 7-14, 2013 7 Fort Lauderdale - Labadee - Falmouth - Cozumel - Fort Lauderdale CaribbeanApr 14-21, 2013 7 Fort Lauderdale - Nassau - Saint Thomas - Saint Maarten (Phillipsburg) - Fort Lauderdale Caribbean
• Very tight schedules => schedule reliability!• Stability in the sailing schedule of ships: not only linked to vessel size, but
also to the strategies of the cruise operators and cost and technical considerations
Conclusion: 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).
Thank you for your attention
