Article # 3 Flashcards
EXCHANGE --- Heard on the Street: The Math Behind The Megaships --- The cruise industry is bringing a whole new meaning to the phrase 'economies of scale'
Which TV show helped popularize cruises, and when did it air?
the Love Boat, which aired from 1977 to 1986, helped popularize cruises as a vacation option.
What was the cruise industry passenger count in 1980?
There were 1.4 million oceangoing cruise passengers in 1980.
Who are the main demographics of today’s cruise passengers?
Middle-class Americans and Europeans, often families looking for a convenient vacation experience.
What are two key factors that have helped keep the cost of cruises down?
Tax havens and employing thousands of workers from developing countries.
What is the capacity of Royal Caribbean’s Icon of the Seas?
7,600 passengers, excluding 2,350 crew members.
What is one of the significant advantages of megaships like Icon of the Seas?
Economies of scale—having only one captain, bridge team, and engineering team for a large number of passengers.
How do modern cruise lines generate a substantial part of their revenue aside from ticket sales?
Through onboard spending on drinks, spa treatments, specialty restaurants, and gambling.
How did the pandemic impact the cruise industry?
Carnival and other companies neared financial collapse, leading to older, less efficient ships being sold or recycled.
What improvements do the newest megaships have over older cruise ships?
They have better environmental footprints, use liquefied natural gas, treat their own waste, and include features like shore power connection.
What is the significance of cruise companies leasing private islands?
It allows cruise lines to create controlled environments for their passengers and keep all spending profits within the company, offering a sanitized version of the tropics.
What are some examples of cost-cutting measures taken by cruise lines recently?
Reduced turndown service for non-premium cabins and smaller burger portions.
By how much have the shares of the major cruise operators rebounded in 2023?
Their shares have rebounded by an average of 85%.
