A Look At The Cruise Business
A study of the Universidad del Caribe published in 2012 and developed by a team of researchers from that school led by their principal, the teacher Arturo Escaip Manzur, makes us aware of the situation of the cruise industry, in addition to the tourism industry at a worldwide level. *
In 2010, the North American cruise industry generated resources for 28 trillion dollars, representing an increase of 8.8% with respect to 2009. That year, cruise ships transported 14.82 million passengers, an increase of 10.3%. The installed capacity grew 5.4% in vessels and 8.1% in beds and its capacity was higher than 100.0%. The only item that fell in 2009 was the earnings per passenger.
Two corporate companies engross the market: Carnival and Royal Caribbean. In 2011 both controlled 82.0% of the passengers/night. Carnival with 7 cruise lines had 54.0% and Royal Caribbean with three lines 28.0%.
The market competition occurs primarily through product differentiation. In 2009, the 17 cruise lines offered 619 different products combining the ship, the theme, the port of departure and the destination. One hundred an nine boats participated, 59 ports, 15 destinations, and the travel time was 1 to 30 nights.
Cruise trips to the Caribbean are the most common in the North American market. In 2011, the 20 existing cruise lines had 15 destinations, of which 6 are in the Caribbean and one is specific of Mexico. In the case of Mexico, there are 15 cruise destinations. The most important of the country is Cozumel, which occupies one of the top positions in the world ranking of cruise ports. This ranking is based on the volume of passenger traffic. In June 2012, the Port of Miami Cruise topped the ranking in the world because it received more than 4 million passengers in 2011.
The cruises have focused on the mass market of medium or economic level with an average or low duration. The most frequent trips with an extension of less than 6 days. Trips lasting more than nine days that demand higher-income people have a relatively minor importance.
<From this the socio-económico profile of the cruise passengers can be deduced and their low spending on land destinations>.
The main source of income of cruises, exemplified with Carnival Corporation in 2011, comes from the tickets for the cruise with 77.0%. The income generated on board is derived from the sale of beverages, boutique purchases, laundry , photography services, hairdressing, massages and phones, accounting for 21.0%. The tours <with land activities> are optional and generate 2.0%. Carnival Corporation had revenues of 17.793 million U.S. dollars in 2011, 9.5% more than in 2010.
<As a reference point for these giants, Mexico had revenues of approximately 11 billion dollars from foreign tourism>
As for utilities, Carnival, which controls about 40.0% of the market share of the Caribbean, registers annual earnings in the last three years, for close to two billion dollars. <Carnival is a listed company and its financial statements are published by law>
<The tourism balance of Mexico, considering the tourism revenues and expenditures of Mexican tourists abroad, amount to about four billion dollars annually>
As for the origin of the cruise passengers, it is mainly from the United States, which contributes with 61.0% of the demand for the service. Next in importance are the passengers from the United Kingdom with 9.0%, Germany 7.0%, Italy with 5.0% and Canada and Spain with 4.0%.
The cost of travel for cruise tourists has decreased. In 2011, the spending of $1,790 dollars was lower by 4.5% than in 2009. In that same year the cruise price at $ 1,326 U.S. dollars was 6.2% lower than in 2008; the spending on the cruise ship and at the destinations was $464 U.S. dollars, almost the same as in 2008; and the costs of air travel of $376 was 13.2% less than in 2008. In 2011, the passengers spent 61.0% of their budget on the cruise: 22.0% for consumption on board and at the destinations, and 17% in airfare.
Due to their operating characteristics, the cruise industry is in a position of competitive advantage to the hotel industry. This competitiveness has various aspects: its highly oligopolistic corporate situation, the high technological development of its design and planning processes of their services to satisfy customers with diverse interests by constantly innovating, and its non-territoriality, allowing them to evade any tax, labor and environmental regulations when it suits them. <The Captain of a ship can theoretically kick its staff with impunity because it is not subject to any territorial law>
The cruises are depreciating assets but have no surplus value, like hotels. Their greatest advantage is that they usually sail under the most convenient flags from countries without harsh tax laws. In exchange for lacking surplus value, their competitive advantage is that they don't pay taxes and they provide minimum wage conditions. <They don't respect labor laws> in comparison to hotels.
They exploit economies of scale to stock and make a "pool" or joint shopping. To be mobile, they can take advantage of offers and shop at different ports, depending on their requirements. <It's the reason for which they don't buy in Mexico>.
They are not affected by seasons, adverse political situations, devaluations, epidemics and so on, because they move their boats to the friendly and hospitable seas of the moment. <To the needy, you could add>
They can change their home-port whenever they want and flexibly modify the duration of the trip and the services offered on board, according to the economic capacity of the passengers.
They defend themselves from the destination ports, saying that tourists often return to it for a longer stay. According to the Cruise Lines International Association, about 50.0% of passengers would return on another vacation to the destinations.
They are since recently, destinations in themselves, as they promote tours to nowhere to sell travel from a few hours to a few days. They use low quality fuel to lower costs.
There is a vertical and horizontal integration of the business. The travel and wholesale travel agencies are in the same group and offer integrated services, since they promote and sell the cruise travel, air travel, stay on land, car rental, guided tours, tickets for shows and museums.
The cash flow from the Mexican cruises are an insignificant portion of the national GDP. This industry does not pay taxes does not create jobs, and does not promote local development because it concentrates purchases from passengers in some businesses to establish preliminary negotiations. Therefore, their companies are not socially responsible. While the tourism sector contributes 7.8% to the national GDP the cruises only generate 0.04%. In the case of Puerto Vallarta the cruise passenger spending, estimated in a good year as it was in 2008, doesn't even reach 0.5% of the tourism revenue of the city. The trickle from spending is centralized in a small sector of services that gravitates around the harbor and inhibits a necessary distribution in the downtown area which barely survives for lack of customers.
[readon1 url="http://notivallarta.com/2013/08/08/las-grandes-empresas-mundiales-del-turismo/"]Source: NotiVallarta Translated by Rene Tripp[/readon1]
- Smaller Small Medium Big Bigger
- Default Helvetica Segoe Georgia Times
- Reading Mode