Global Cruise Tourism Industry

Discuss about the International Market in Cruising Industry for Global Tourism.

The global tourism industry has developed immensely over the decades, emerging as one of the fastest growing industries in the global scenario in the contemporary period. The primary reasons behind this wide expansion of the industry in the global scenario are primarily the global phenomena like Globalization, trade liberalization and other technological and infrastructural innovations which have made travelling and communication easy and more convenient over the years and have thus made it more evident convenient for an increasing number of people across the world to travel within the country as well as outside the country for pleasure as well as for work (Hadad et al., 2012). The change in the income, consumption and preference patterns of the population have also been fast changing attributed to the changing life style of people across the globe.

In this context, it can be asserted that the tourism industry in the global scenario has been developing and diversifying substantially over the years, with different types of branches developing under the domain of this industry. Of such newly developing branches in the tourism industry one of the primary ones is that of the cruise tourism industry (Csapo, 2012). Although cruising, as a leisure entertainment and professional travelling activity has existed for centuries, however, in the last few years, the cruise tourism has developed extensively as one of the fastest growing form if tourism in the global framework. Over the last few years, the cruise industry has flourished immensely, especially in the developed countries and also in some of the developing ones with increasing activities, both in the supply as well as in the demand side (Lee & Ramdeen, 2013).

However, in spite of its huge expansion and increased revenue earnings, there are still huge unexplored markets and untapped opportunities left for the international cruise industry to capture. On one hand these unexplored markets include those sectors of population in the developed countries, where cruising is already a popular tourism activity. On the other hand, the unexplored market for the cruising industry also includes those countries, where in spite of the presence of a robust and developing tourism industry, the concept of cruise tourism has not infiltered or implemented to that extent. The report also tries to tries to investigate the hurdles and main bottlenecks in the expansion of cruise tourism in these areas as well as the opportunities which are present in these aspects, which can be utilized by the cruising industry in the coming years.

Cruise Tourism: Potential Markets and Untapped Opportunities

The term “Cruise Tourism” refers to the comparatively new and luxurious form of travelling and enjoying leisure holidays on a cruise ship, travelling to scenic and famous destinations, according to a well-planned and specific itinerary which in turn gives the customers an all-inclusive holiday experience in these “Water Hotels” (Lukovic, 2013). In the last few years, this form of tourism has been increasingly becoming popular, especially among the millennials, who, with their change preferences and an overall higher income level, are eager for new leisure, travelling and adventurous experiences, have been increasingly participating in the cruise tourism industry in the global framework. The increase in the number of people availing the cruise services across the world, over the years, can be seen as follows:

As is evident from the above figure, the number of cruise passengers in the world has been increasing steadily over the year. This in turn has increased the global revenue of the cruising industry to more than 118 billion USD in the contemporary period, employing more than 1,000,000 people and creating wage distribution of more than $40 billion in the recent times (Rodrigue & Notteboom, 2013).

This in turn indicates towards the increase in the share of cruise industry as an integral part of the global tourism industry, as can be seen with the help of the following figure, which shows the increase in the number of cruise bookings as a part of total bookings for travelling and hotels in the global tourism scenario in the current period:  

The cruise market been experiencing an increase in the number of participants both from the demand side as well as from the supply side. However, in the supply side, in spite of the presence of an increased number of players, there are a few major cruise companies and cruise lines which have been dominating the global market for a prolonged period of time, which can be seen from the following figure: 

Thus, from the above discussion and empirical evidences it can be seen cruising, as an integral part of the tourism industry, in the global framework, has been developing considerably over the years. However, there still remains huge areas in the world, where this activity and industry have not infiltrated to a considerable extent (Buckley, 2012). Keeping this into consideration, the following section of the report tries to analyse the potential and unexplored markets which can be tapped by the industry in the coming years. 

As discussed above, the number of demand side participants in the global cruising industry has been increasing robustly over the years. However, not all the countries in the global framework can be seen to be equally participating in this kind of tourism, as can be seen from the distorted distribution of the share of passengers of the cruise tourism industry, by countries across the world: 

As is evident from the above figure, the primary cruising enthusiast countries in the current global scenario are the United States of America, China, Germany, UK and Australia, with the number of people opting for cruising being specifically and visibly higher in the USA than that of any other countries (Swanson & Edgell Sr, 2013). Apart from these countries, there are also other regions from where people go for cruising. However, the percentage of population, in these countries, participating in cruising being specifically low (not more than 1%) in these countries.

Thus, from the above figures, it can be asserted that in spite of the growing enthusiasm regarding cruise tourism across the globe, the actual share of people opting for it as their holidaying activity or pleasure activity is strikingly low in all parts of the world. The USA, in spite of being the biggest contributor in the demand side of the cruise tourism industry, the percentage of population of the country, taking cruise tourism is also strikingly low, along with even lower share of population in other cruise enthusiasts countries. Thus, from these figures, it can be asserted that there remains a high level of untapped markets in the already developed countries.

Apart from these countries, where cruise tourism has been developing considerably and still have not succeeded much to capture a major share of the tourism markets, there also remain many emerging countries which are also required to be taken into account. For instance, in the contemporary periods, the different Asian countries like that of India, Taiwan and others have been developing significantly, thereby emerging as the highly developing and emerging economies in the contemporary global scenario, much of which can be attributed to the industrial and economic developments in these countries, which in turn are contributing in increasing the income and economic stability of increasing share of the populations of these countries (Xiao-Dong & Xue-Gang, 2012). This, clubbed with the technological and infrastructural developments in these countries is changing the patterns of pleasure seeking and leisure enjoying of a considerable share of the population in these countries. Apart from the Asian countries, the other developing countries in the global framework, are also experiencing considerably increase in the growth of the tourism sectors as a whole, which can be seen as follows: 

As is evident from the above figure, with time the contribution of tourism industry to the GDP, in case of the developing countries have been visibly increasing while the share of the same on part of the developed countries has been reducing, compared to that of the developing countries, the traits being primarily in the Asian region, with many robustly developing and emerging economies across this region.

However, in this context, the cruise tourism industry is also seen to be increasing its domain of expansion in these regions. However, the growth of the cruising industry is not seen to be as impressive as that of the growth of tourism industry as a whole in the Asian region. This can be seen from the following figure: 

As is evident from the above figure, the growth of the cruise industry in the Asian region has been considerably slow. Although the number of total cruise and voyages have increased to some extent, the rate of increase in the last five years and the number of deployment of ships by size, int the Asian region has not been impressive in the last five years (Chen, 2016). On the other hand, the growth in the capacity of cruise industry in the Asian region, both in terms of operating days as well as in terms of passenger capacity can be seen from the following figure: 

Thus, from the above figure, it can be seen that the growth in the capacity of the cruise industry in the Asian regions has also been sluggish, in spite of the presence of considerable opportunities of expansion of the industry in these regions.

One of the primary examples of such countries is the emerging economy of India, which is expected to enter the list of globally dominant economies in the coming years. Although India emerged as one of the lucrative markets and destinations in the current period, the growth of the cruise tourism industry has been quite sluggish both from the demand as well as from the supply side in the country, as can be seen from the statistics of passenger handlings by the five major ports of the country in the last few years (Chon, 2013). While the number of cruise passengers handled by the five major ports of the country increased from 1,04,125 in 2014-2015 to 1,25,838 in 2015-2016, the same actually declined back to 1,22,093 in 2016-2017, which in turn indicates towards a sluggish growth of the cruise tourism in the country, which is also the picture in most of the developing countries in the Asian region (Financialexpress.com, 2018).

Thus, from the above evidences it can be asserted that cruising industry in the global scenario in the contemporary period, although has developed considerably, however, there remains huge unexplored as well as untapped market and population, both in the developed countries as well as the developing countries for the cruise tourism industry (Ashworth & Goodall, 2013). Keeping this into consideration, the following section of the investigative report tries to explore, analyse and highlight the primary hurdles and bottlenecks which are present in the expansion of the cruising industry in the global framework as a whole, both in the demand side as well as in the supply side, which in turn have been cumulatively contributing in the sluggish growth of the industry. 

The issues which are existent in the cruise industry, in the global scenario, can be seen to be present both in the demand side as well as in the supply side of the industry, which in turn have to be addressed by the cruise industry in order to take advantage of the untapped opportunities and markets in the coming years.

According to one of the surveys conducted by Accenture, regarding the demand side activities in the global tourism industry, the primary issues which are seen to be highlighted as the demand side hurdles for the cruise tourism can be seen from the perceptions of the millennials of a global population, regarding the factors which can lead to an increase in the demand for cruise holidays in all parts of the world are as follows: 

1. a) High pricing problems-The primary problem in the cruise industry, which keeps a considerable number of eager population from taking cruising activities as holiday options is the usually high-priced packages which are offered by the cruise liners for the passengers. The cruise holidays differ from that of conventional holidays in the sense that cruise holidays usually come in complete and all-inclusive packages which in turn leads to the a one-time considerably big payment to be done on part of the consumer (Polat, 2015). This in turn makes it difficult for a large share of the potential customers to avail cruise tourism in spite of their eagerness and a considerable share of those who can afford choose not to due to high level of scepticism regarding investing a high amount in an experimental form of holidaying.
2. b) Maturity of the cruise tourists-Another aspect which creates a demand side bottleneck in the cruising industry in the global framework is the basic nature of the cruise holidaying and the activities included in the cruise tourism and the perceptions and level of maturity of the potential cruise tourists in the developed and especially in the developing countries. The cruise culture, being primarily emerging from the lifestyle of Europe does not match with the ideology and concept of outbound tourism in most of the countries (Webgate.ec.europa.eu, 2018). The concept of outbound tourism, especially in the Asian countries is more of sight seeing and less of leisure, which in turn leads to a blockage in the mindset of the potential cruise customers, thereby making it difficult for them to understand the utility of spending days in closed space of a cruise. This in turn creates one significant hurdle in the path of expansion of the concerned form of “Leisure Tourism”.
3. c) Duration of vacations-The duration of cruise vacations is usually lengthier and there remains no option for opting for options within the packages as in the case of normal vacations. Many people cannot afford to have so many days of vacation, which in turn decreases the demand for such cruise vacations in spite of the presence of immense eagerness among the people in the contemporary period regarding cruising. 

Apart from the demand side issues, there also exist several supply side hurdles which contributes in the considerable lagged expansion of the industry in the global framework, the primary ones being as follows:

1. a) Cruise Industry Chain-The cruise industry chain itself is a complex operative framework consisting of both upstream as well as downstream industries in it. The upstream linkages consist of ship manufactures, operating companies while the downstream ones consist of port services and the tourism and trading aspects. All these aspects being huge and a costly procedure inherently create considerable barriers for entry in the cruise tourism market due to the presence of a huge initial fixed as well as variable cost and the chance of profit being only robust after the companies earn economies of scale. Often the companies who enter in the market fail to build up a successful cruise industry chain which in turn creates problems in their services and increases the cost of production of these companies.
2. b) Poor policy infrastructure-The cruise tourism being one of the fastest and newest wings of tourism industry as a whole, the policy framework to support and develop this industry is however not that sound in many of the countries, especially the developing ones (Cscjournals.org, 2018). To develop the cruise industry, it is of utmost importance to make it cost efficient for which initially subsidies and protection are required to be provided in terms of cruise docking fees, security clearance procedures and other aspects which are by default quite costly. However, these are not provided visibly by most of the governments, thereby leading to a slow growth and pricey service on part of the supply side providers of the cruising industry.
3. c) Shortage of trained professionals-One of the primary bottlenecks in the path of development of this comparatively new form of tourism in an expansive worldwide manner is the absence of properly trained professionals who have the adequate skills to run these cruising companies and the operations in the same (Larsen, Marnburg & Øgaard, 2012). These includes employees in all aspects of cruise tourism like management, cruise trade, marketing, design, manufacturing as well as employees on board of a cruise. These problems are even more acute in the new and emerging developing economies due to the lack of awareness among a large share of population regarding the development of cruise tourism as a lucrative form of industry.

Keeping the above hurdles and bottlenecks in concern, the following recommendations can be of use in decreasing the hurdles and in helping to expand the domain of operations of the tourism industry in the global framework:

• The pricing levels and systems of the cruises need to be more economic and the industry must focus in publicizing the pre-pay options and decomposition of costs. Making the cruise vacations less expensive can draw many open-minded millennials who have started earning or are in the middle or low-middle income clusters and also the population belonging to the developing countries.
• The deluxe cruise liners along with the smaller ones, apart from providing luxurious cruise experiences should also emphasize in designing short-duration, small distance (mostly domestic) cruising experiences for the non-elite population of different countries (Cscjournals.org, 2018).
• The cruise liners need to develop new experiences, on board entertainments as well as excursions for the adventure loving millennials who can form a significant share of the next generation cruisers. Focussing only on onboard cruise leisure may decrease the interests of these people, thereby leading to stagnation in the industry.
• One of the primary bottleneck being all-inclusive cruise vacation packages, the cruise liners should start emphasizing upon provisions for the passengers to customize their vacation experiences according to their choices, the customizable options primarily being departure points, off-shore excursion activities, on board entertainment facilities and other aspects.
• In the age of increasing internet usage and digitalization, the cruise liners should focus on developing their online websites where useful information regarding their packages, tours, cruises and prices can be available and where the customers can also book their cruise tours conveniently and easily. This in turn may help the industry to expand faster and more efficiently.
• The cruise liners existing in the global market as well as the potential new supply-side entrants should focus on building up a robust industry chain with cost effective forward and backward linkages so as to increase the cost efficiency and affordability of their services (Sletvold, 2014).
• Governments should focus on building up robust and supportive policy and strategy frameworks in order to develop the cruise tourism industry.
• Emphasis needs to be given on proper training and skill development of the workforce in the operating framework of this comparatively new and emerging form of tourism in order to increase the efficiency of the industry as well as the satisfaction levels of the customers as a whole.

Conclusion 

From the above discussion and analysis of the empirical evidences, it can be concluded that over the years the cruise tourism industry has develop0ed significantly and emerged as one of the fastest growing wings of the tourism industry as a whole. However, the industry has still not reached its full development capacities and there are lot of untapped markets and client zones left to be explored. Much of this can be attributed to the hurdles which are currently existing in both demand and supply side of the industry, for which both the participants in the industry as well as the government of the respective countries also need to incorporate policy and strategic changes to a considerable extent. 

References 

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