Ship Happens…

1. THE GEOGRAPHY OF CRUISE SHIPPING: ITINERARIES, CAPACITY DEPLOYMENT AND PORTS OF CALLJean-Paul RodrigueDept. of Global Studies & Geography, Hofstra University, New York, USATheo NotteboomITMMA - University of Antwerp and Antwerp Maritime Academy, BelgiumIAME 2012 ConferenceTaipei, September 6-8 2012

2. Ship Happens… Costa Concordia disaster Costa Cruises: -25% bookings (May 2011/12)

3. Global Cruise Passengers Carried, 1990-2011 • Cruise industry emerged in the late 1960s • Mass market using large vessels and adding more revenue-generating services onboard. • Symbol of the globalization of the tourism industry (e.g. Weaver, 2005; Wood, 2000). Recession

4. Cruise shipping in literature • Cruise shipping in literature: • Seasonality of the world cruise market (Charlier and McCalla, 2006) • Industrial organization of cruise shipping (Papatheodorou, 2006) • Demand for cruise tourism (Petrick and Li, 2006), • Supply of cruise shipping (see e.g. Wilkinson, 2006 and Wood, 2000) • Economic significance of cruise tourism (Dwyer and Forsyth, 1996; 1998 and Dwyer, Douglas, and Livaic, 2004) • Cruise ship passenger spending patterns (Douglas and Douglas, 2004) • Operational studies: • Optimal routing of cruise ships (see e.g. Hersh and Ladany, 1989) • Cruise ship port selection process (Marti, 1990) • Optimal cruise-liner passenger cabin pricing policy (Ladany and Arbel, 1991). • The service offerings and locational qualities of cruise ports: • McCalla(1998): site and situation requirements of cruise ports • Vagellasand Pallis (2010): different services provided by 20 European passenger ports • Guiand Russo (2011): structure of cruise value chains and the regional articulation of land-based cruise services. • Geography of cruise shipping remains an under-researched academic field in maritime and tourism studies.

5. Focus of paper • This paper focuses on capacity deployment and itineraries in two major cruise markets: the Caribbean and the Mediterranean. • We argue that: • the cruise industry sells itineraries, not destinations, implying a level of flexibility in the selection of ports of call • The two cruise markets are interconnected in an operational manner • Cruise ports can be classified based on the role they serve within their regions.

6. The Three Fundamentals of Cruise Shipping

7. Market Share of Main Cruise Lines, 2011: Horizontal Integration and the Illusion of Diversity

8. Full House: Occupancy Level of North American Cruises, 2004-2011

9. Cruise Source Markets, 2010

10. The Global Cruise Port System 70% A Supply-Based Industry

11. Most Active Cruise Ports by Passenger Visits, 2011

12. Cruise Passengers Visits, Caribbean, 2011

13. Cruise Passengers Visits, Mediterranean, 2011

14. Functional Typology of Cruise Ports

15. The impact of shoreside power/coldironing • Large differences in CO2 emissions: • From 93 to 615 kg of CO2 per passenger-day • From 199 to 1,314 g CO2 per passenger–km • Juneau in Alaska was the first (2001) • Obstacles: • Challenges a city’s power grid • Investment costs (also for retro-fitting ships) • the cost of shore power • the absence of international standards for shore power systems. • Environmental regulations in urban areas => move to less urban areas

16. Is the Future Co-Location? Ensenada Cruiseport Village (HPH)

17. Key Cruise Itinerary Design Variables

18. Revenue and Expenses per Average Cruiser, 2011 On-board services: 20-30% of revenues Looking for Fuel-Efficient Routes: 17 knots x 14 hours= 200 nm is ideal

19. The Advantages of Mobile Assets: Types of Itineraries

20. Shiprepositioningby Royal Caribbean Cruises

21. Seven is the Magic Number: Duration of North American Cruises (in nights), 2011 Sweet Spot (47% of all cruises) Bahamas & Western Caribbean from Florida South Pacific

22. Selected Cruise Itineraries, Caribbean 3-5 nights / 2-3 port calls Geography History / Culture Market proximity 7 nights / 3-5 port calls

23. Selected Cruise Itineraries, Mediterranean World class cultural amenities Market proximity Diversified sub-regions

24. A complex vessel deployment strategySilver Wind (Silversea Cruises), LOA = 157m, beam = 21.5m 296 guests in very luxurious conditions No. of port calls Source: own compilation based on schedules

25. Simple vessel deployment strategies • Verytightschedules => schedulereliability! • Stability in the sailing schedule of ships: not only linked to vessel size, but also to the strategies of the cruise operators and cost and technical considerations

26. Conclusion: Live by the Supply, Perish by the Supply? • Unique characteristics of the cruise industry: • Supply push strategy of cruise operators; ‘creating’ demand by providing new capacity (ships). • Itineraries, not destinations. Specific regional and cultural experiences offered through a combination of sailing time and choice of ports of call. • Expand and capture revenue streams by offering on board goods and services as well as shore-based excursions. • Adapt to seasonal and fundamental changes in the demand; repositioning ships (seasonal) and changing the configuration of port calls (fundamental).

27. Thank you for your attention