Cruceros Carivean

Questions

1. What global forces have contributed to the growth of the cruise industry?
Two major factors that have contributed to the growth of the cruise industry are the change in the competitive environment brought about by the advent of transoceanic airline service and increasing discretionary incomes. As demand for liner travel declined in response to the development of lessexpensive and much faster air service, shipping lines were forced to respond to the new market conditions by developing sea travel for the middle class, i.e., cruises. In addition, all-inclusive prices, a wide range of on-board and on-shore offerings, and the additional safety and security measures provided by the cruise industry have proven very attractive in light of recent political and socio-economicevents.

1. What specific steps have Carnival Cruise Lines taken to benefit from global societal changes?
Carnival has responded to global environmental changes in a variety of ways. Because a ship is highly vulnerable to terrorist acts, Carnival has instituted very strict security measures. It has also implemented strict health and safety measures. Carnival has dealt with economicrecessions by offering shorter cruises that embark closer to home and with times of economic prosperity by offering longer cruises that incorporate more exotic destinations. It minimizes staffing costs by sourcing employees on a global basis. In addition, across its various lines, Carnival offers a wide variety of themes, classes of service, and destinations.

2. What are some of the differences bycountry that affect the operations of cruise lines?
Political/legal, geographic, economic, and sociocultural differences all affect the operations of cruise lines, which are truly international in nature. For example, most shipping lines choose to flag their vessels in countries such as Liberia, Mongolia, or Panama because of the lower taxes and less stringent employment practices requiredby the laws of those countries. Relatively few countries (Finland, France, Germany, Italy, Japan, and South Korea, for example) have shipyards capable of building cruise ships. Consequently, governments (e.g., Italy) may choose to subsidize the ship-building industry in order to secure contracts for their domestic firms. The favorable location of the Caribbean/Bahamas and the Hawaiian Islandsmakes them busy destinations year round, while Alaska is strictly a seasonal favorite. Because of their professional skills and fluency in English, Philippine workers comprise nearly a third of the seamen worldwide. Yet many other crew members also come from Eastern Europe, Vietnam, and China. Finally, in addition to the fact that many ships are designed to accommodate the economic realities ofthe mass market, others are specifically designed to appeal to the cultural preferences of their clientele (e.g., Costa, based in Italy, offers a distinctive Italian flavor).

3. Although most cruise line passengers are from the United States, the average number of vacation days taken by U.S. residents is lower than in most other high-income countries. For instance, the number is 13 days peryear in the United States as compared to 42 days in Italy, 37 in France, 35 in Germany, and 25 in Japan. How might the cruise lines increase sales to people outside the United States?
Given that the majority of people in the targeted income segment ($20,000-$60,000 per year) have yet to take a cruise, the major task confronting the cruise line industry is one of marketing. In addition topromoting the many appealing features of its various cruises and lines throughout the developed world and selected developing countries, Carnival could partner with foreign airlines and travel agents in order to get foreign vacationers to its many ports of embarkation.

4. What threats exist for the future performance of the cruise line industry and specifically Carnival Cruise Lines? If you were...