Chapter 8 - Article Summary

Question 1

Article #1

Answer 1

This article traces the development of commercial air travel from its early days in 1908, when the first passenger flight occurred, to the rise of budget airlines like Ryanair and EasyJet in the 1980s and 1990s. Key moments in the aviation industry’s growth include the introduction of commercial flights in the 1920s, the role of the Boeing 747 in revolutionizing air travel, and the emergence of the “fast fashion” in air travel through budget airlines. It also touches on how modern air travel now allows consumers to book flights almost instantly, contributing to increased global connectivity.

Question 2

Article #2

Answer 2

The article traces the history of resort hotels, which originated from the Roman tradition of seaside living and the spa culture. Seaside resorts in Europe gained popularity in the 18th and 19th centuries, especially with the advent of railways making travel to coastal towns easier. By the 1930s, paid holidays in Europe allowed more people to access these resorts.
The modern concept of an all-inclusive resort emerged in Britain in the 1930s with Butlin’s holiday camps and later expanded globally with brands like Club Med in the 1950s. The business model of modern resorts addresses the “holdup problem” in economics, ensuring a fixed price for services and reducing the anxiety of price changes during a vacation. This model has become more profitable due to upfront payments and the ability to cross-subsidize services.
The article also discusses the economic impact of resorts on local communities, noting both the positive job creation and the potential negative impact, such as reinforcing racial stereotypes and creating an “enclosed bubble” for tourists. It touches on the environmental and cultural effects of resort tourism, including waste production and the commodification of local cultures.

Question 3

Article #3

Answer 3

This article explores the modern cruise industry’s focus on economies of scale through megaships, analyzing their financial, environmental, and operational impacts.

Evolution of the Cruise Industry:

Cruises, once seen as luxury travel for the wealthy, have become a middle-class vacation option.
The industry leverages economies of scale by building mega ships that maximize revenue and minimize costs.
Megaships and Their Features:

Royal Caribbean’s Icon of the Seas, the world’s largest passenger ship, exemplifies these trends with 20 decks, amenities like zip-lines, water slides, and multiple restaurants.
Such ships carry up to 7,600 passengers, saving on staff costs by centralizing operations like navigation and engineering.
Cost Strategies:

Cruise lines generate revenue from onboard spending (e.g., gambling, specialty dining) beyond ticket sales.
To cut costs, ships adopt energy-efficient technologies like liquefied natural gas engines, hull coatings, and shore power compatibility.
Environmental Impact:

Megaships are designed with greener technologies to meet international emissions standards, reducing their per-passenger environmental footprint.
Pandemic Recovery and Challenges:

The COVID-19 pandemic forced cruise lines to retire older, less efficient vessels, streamlining their fleets.
Inflation and rising costs have led to changes, like reduced services and smaller portions in dining, sparking passenger complaints.
Private Island Strategies:

Companies lease or buy private islands near ports to control customer spending and create branded experiences, boosting profitability.
Financial Rebound:

Despite pandemic-related challenges, the industry has rebounded strongly, with major operators’ shares surging in 2023.