Tourism (3): Cruise Industry and Economies of Scale

Question 1

How does Spencer Jakob believe the cruise ship industry changed?

Answer 1

Used to be for “newly wed and nearly dead” (wealthy), now for middle-class Americans and children.

Question 2

How do cruise ships keep their costs down?

Answer 2

1. Cheap labour and tax havens
2. Economies of scale

Question 3

What strategies do cruise ships use? Why do cruise ships have low ticket prices?

Answer 3

Use larger ships (cost-efficient).

While tickets are low, 1/3 of revenue comes from purchases on board (drinks, spa, restaurants, gambling)

Question 4

How has COVID caused the ship industry to go green?

Answer 4

COVID forced ships to recycle older vessels. New models have more space but also cleaner fuel (natural gas).

Question 5

What are some characteristics of new models of cruise ships?

Answer 5

Less friction, connect to shore power, treat waste

Question 6

What’s a niche that cruise ship companies promote? How does it benefit them?

Answer 6

Bigger ships can’t get into small spaces, so cruise lines lease private islands for docks. This way:
1. Boost their own revenue as they don’t have to pay locals
2. Save energy
3. Promote safety