Advanced Revenue Management in Cruise Industry

  1. Industry Overview: A cruise ship or cruise liner is a passenger ship used for pleasure voyages, where the voyage itself and the ship’s amenities are a part of the experience, as well as the different destinations along the way. Transportation is not the prime purpose, as cruise ships operate mostly on routes that return passengers to their originating port, so the ports of call are usually in a specified region of a continent. There are even “cruises to nowhere” or “nowhere voyages” where the ship makes 2-3 day round trips without any ports of call.

Cruising has become a major part of the tourism industry, accounting for U.S.$29.4 billion with over 19 million passengers carried worldwide in 2011.

Here are some big cruise companies’ websites:

http://www.carnival.com/

http://www.royalcaribbean.com/home.do

 

Cruise companies normally sell their cabins like rooms in hotel. But the stay nights of each cabin will be same which is just how long the voyage will last.

 

 

  1. Space:
    1. Cruise industry define space mainly explicitly (cabins)but sometimes  implicitly(ballroom, restaurant and other public area)
    2. Most modern cruise ships feature the following facilities:

Casino — Only open when the ship is at sea to avoid conflict with local laws

Spa

Fitness center

Shops — Only open when ship is at sea to avoid merchandising licensing and local taxes

Library

Theatre with Broadway style shows

Cinema

Indoor and/or outdoor swimming pool

Hot tub

Buffet restaurant

Lounges

Gym

Clubs

 

  1. Cruise companies commonly divide their space into different types of staterooms, ballroom, restaurant and other public area. For example, the ship Carnival Legend has four types of staterooms that is  Interior,Ocean view, BalconySuites.

 

  1. The passenger’s ticket includes the stateroom accommodation, room service, unlimited meals in the main dining room and buffet, access to shows, and use of pool and gym facilities. However, there are extra charges for alcohol and soft drinks, official cruise photos, Internet and wi-fi access, and specialty restaurants; it has been reported that the casino and photos have high profit margins. Cruise lines earn significantly from selling onshore excursions (keeping 50 percent or more of what passengers spend for these tours) offered by local contractors.In addition, cruise ships earn significant commissions for sales from onshore stores that are promoted on board as “preferred” (as much as 40 percent of gross sales).

 

 

 

 

  1. Time:
    1. Cruise industry typically sells time explicitly. They calculate time by nights you stay on board just like hotel industry.
    2. Cruise industry actually also sells time implicitly. Because all the public areas are like a park where you should find unoccupied seats or rooms available for everyone.

 

  1. Price
    1. Cruise companies use some physical rate fences to segment customers.

They provide different price according to how big and how beautiful the view the staterooms are and which route.

 

  1. Cruise companies use some non-physical rate fences to segment customers too.  They provide different price according to how long it is from your booking to the departure of the cruise and which state you are living now.$3897 Day Mediterranean • Costa Serena

    $399

    7 US & Canada • Norwegian Gem

    $399

    7 Day Mediterranean • Navigator/Seas

    $404

    7 Day Caribbean • Norwegian Pearl

    $399

    7 Day Alaska • ms Statendam</< span>

    $499

    7 Day Alaska • Millennium

    $499

    7 Day Caribbean • ms Nieuw Amsterdam

    $449

    5 Day Bermuda • Explorer/Seas

    $549

    7 Day Caribbean • Crown Princess

    $599

    7 Day Mexico • Sapphire Princess

    $549

    11 Day Caribbean • Norwegian Sun

    $959

    11 Day Hawaii • Millennium

    $2,989

    12 Day Caribbean • Quest

    $4,599

    11 Day Caribbean • Seven Seas Navigator

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