Cruise ShipsNot Just For Grandma & Grandpa Anymore

Group 4Chien Jay Ralph

Luck Mega Praew

Cruise ShipsA cruise ship or cruise liner is a passenger ship used for pleasure voyages, where the voyage itself and the ship's amenities are part of the experience, as well as the different destinations along the way.

Cruise Ships Industry Earlier, cruising was considered to be either

for the retired and the elderly or the rich and famous

In the 1980s, the perception began to change. Cruise lines were among the most profitable

of all service business during the 1990s; low taxes and operating costs.

Due to concerns about terrorism, high energy costs, increased pollution of harbors, industry growth slowed a bit after 2002.

Cruise Ships Industry (cont.)

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2010 Total World Wide Cruise Market Share

The total worldwide cruise industry is estimated at $26.78 billion for 2010, a 7.4% increase over 2009.In addition, cruise lines are planning on introducing another 23 new cruise ships over the next three years.

In North America, the cruise industry has an annual passenger compound annual growth rate of 6.25% from 1990 – 2010.

The North American market still has growth potential and these activities would help increasing penetration;

o “Mega-ship” building

o further lowering the cost-of-sailing per passenger with economies of scale.

Projected Cruisers Growth Rate

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Cruise Ships Industry (cont.)

Shipbuilding Summary

A total of 13 new ships were added in 2010 with a total passenger capacity of 28,886.

The ships from 2011 and 2012 will add $1.9 billion dollars in revenue to the cruise industry from an additional 1.3 million passengers.

Projected Cruise Revenue Growth Rate

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Cruise Ships Industry (cont.)

Savvy Marketing Helped Fuel Industry Growth

Consumer perceptions had changed and the demand for cruise vacations had been built.

The major players in the industry run their marketing programs to appeal to a wider variety of customer segments.

The firms invested heavily in improving their physical facilities; much bigger and steadier, incorporated amenities.

Growth strategies to date have been driven by shorter cruises, more local ports, more destinations and new on-board/on-shore activities that match demands of consumers.

The combination of an attractive vacation value and marketing buzz surrounding new ship designs will provide opportunity to introduce new cruisers to the cruising experience.

History of Cruise Ship Before the dominance of air

travel, which began to enjoy commercial success in the late 1960s, passenger liners were the preferred mode of overseas travel.

The real blow to the cruise ship industry came in the 1960s when Boeing began selling 747s and other aircraft worldwide.

History (cont.)

Ships changed very little during the first half of this century.

Although engine efficiency improved, many facilities on a cruise ship built in the 1950s were not much different than those on the S.S. Titanic.

History (cont.)

Cruise ship back to life in the 1970, when classic romantic comedy show “The Love Boat” contributed to the idea of luxury cruise ship travel a luxury vacation rather than a means to travel as a necessity.

Classes of Services

Contemporary/Resort Class $150-$300 value-oriented; casual

environment; lots of open deck & pool space, organized activities, sports, etc; broadway style productions, dancing, etc; sit-down & buffet meals

* Among the Market Leaders are: Carnival, Royal Carribean, Norwegian

Premium Class $250-$600 semi-formal; more space

per passenger, more attentive service; theme lounges, theaters, cigar bars, etc.; premium food & beverages

* Major competitors are Holland America, P&O Princess

Classes of Services (Cont.)

Luxury Class $600-$1,500 greater choice of food,

beverage & entertainment in a more formal atmosphere; more spacious & luxurious accommodations; more exotic itineraries

*Competitors are Cunard Line, Crystal Cruises

Classes of Services (Cont.)

Exclusive Class $1,000-up yacht-like environment

with 200 the most passengers; high staff-customer ratio for a highly individualized service

* Existing competitions are: Seabourn Cruise Line, Silversea Cruise, Swan Hellenic

Classes of Services (Cont.)

Cruise Ships Marketing Segmentation

Market Segment for Single Crowds

These groups of people are more likely to enjoy mass sports & activities, e.g. Office outing, meeting, etc

Cruise ships offer the chance to participate in things like scuba diving, gourmet cooking & wine tasting

Luxury or exclusive class Highly individualized service

This group usually spent their time and do activity together

Resort or exclusive class Price from $150 - $ 1,000 Value-oriented and highly

individualized From 3 – 7 days More facilities, e.g. swimming

pool, buffet-style meals, games, fitness center, shopping center, lounge, theaters, lots of open deck and pool space

Market Segment for Honeymooner

Market Segment for Family Resort or premium class Price from $150 - $ 600 Value-oriented and

semiformal From 3 – 7 days More facilities, e.g.

swimming pool, buffet-style meals, games, fitness center, shopping center, lounge, theaters, lots of open deck and pool space

Market Segment for Old Couple

Premium or luxury class Price from $ 250 - $ 1,500 Premium quality with

greater choice of food, beverage and entertainment option in a more formal atmosphere, e.g. lots of open deck for enjoying sunset or take a walk, ballroom dance, etc.

Advantage Travel free of charge on the cruise ship.

Have an adequate venue.

Have a sound and lighting system featuring all the technical refinement required.

Guaranteed to give a certain number of shows and to have a public.

Travel a lot Such as Australia, New Zealand, France, Italy, Greece, England, Ireland, Spain, Hawaii, Alaska, most of the Caribbean Islands and many more.

Put less mileage on your car and it needs less maintenance.

Disadvantage

Don’t have private space to do anything and have to deal with so many people during the trip.

Have to dress up appropriately especially during formal dinner.

Limited area n bed room.

Unexpected experience related to the sea conditions.

Cruise Ships SWOT Analysis

SWOT Analysis

Strength:

Many new ships were built and were completed with full of entertainment

Shorter and cheaper cruises were added to attract more customers

Ships were located in more ports around the worlds.

They know exactly what their customers needs

SWOT Analysis (Cont.)

Weakness:

High fixed cost (25% of overall operating expenses)Seasonality of ship usageOnboard service is labor intensive Long lead time for new ship deliveryWeak environmental policy

Opportunities:

Largely MarketCan do some business relationship with tour and

travel companyUnique Vacation which is rising in popularity Aging population wants relaxing vacations

SWOT Analysis (Cont.)

Threats:

Terrorist attacks and political unrest around the world

High energy costs may squeeze industry profitsUnsteadiness of Economic situationNatural disasterThere are various competitors in the market of

cruise lines

SWOT Analysis (Cont.)

Marketing Strategy

Price Collaboration: Such as also gift certificate for free port charge, taxes, and procession fee. Canival offered substantial discount to their past

customers.

Offer new destination in order to keep existing customers satisfied while attracting new clients.

Fulfilling customer’s once-in-a lifetime experience by served 1st class service in a luxury environment. Serving one-to-one personal interaction.

Product bundling by offering fly-cruise package with leading tour operation, airline, hotel including others activities; provide several shore excursions such as golfing, spa while in port.

Enlighten customers ‘Cruise as another vacation’s option’ via; Sponsor on TV program, golf tournament Special tie-up with some tourism on board

Marketing Strategy (Cont.)

Q&A

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