Marine Transport

Learning Objectives• Assess & evaluate the connections between

globalization & transnationalism & the global cruise industry.

• Identify & describe various types of marine transport in the context of recreation & tourism.

• Explain how certain marine tourism products are packaged & marketed.

• Describe & assess models of market segments associated with cruise tourism.

• Identify & evaluate the environmental impacts of marine transport.

Introduction

• Marine transport consists mainly of transport of goods & transport of people.

Cruise Tourism: Resorts at Sea

• Mobility by sea is at the heart of human expansion.

• The first cruising yacht in operation in 1881, by the Oceanic Yachting Company.

• Early 2005, global cruise tourism shows few signs of stagnation, although annual & seasonal fluctuations continue to exist.

Cruise Tourism: Resorts at Sea (Continued 1)

• Cruise tourism has, in recent years, also expanded internationally.

• For example; Star Cruises, a Malaysian-based cruise line, has a number of large cruise ships visiting larger ports of call throughout Southeast Asia. Star cruises ships are generally targeted at local Asia markets, but they also attract Australians & Americans.

Cruise Tourism: Resorts at Sea (Continued 2)

• The provision of cruise experiences is often measured in terms of available “berths”, which is one way of describing total accommodation available on a ship.

• Berths refer to individual bunks, & thus give an accurate indication of the total number of people that a ship is able to hold.

• Roughly one-third of ships have a total berth capacity of less than 500 & approximately 11% have berths of less than 100.

• Ships with fewer berths may also target a high-net income market segment & thus offer more luxurious on-board amenities.

Cruise Tourism: Resorts at Sea (Continued 3)

• Cruise demand is greatest in North America. • The cruise tourism can be said to have been

globalised as a consequence of substantial international demand for international cruise experiences.

• North American market is currently served by 3 major companies (Carnival Corporation/ Carnival PLC, Royal Caribbean Cruises, & Star Cruises), which account for over 80% of the cruise market capacity.

Cruise Markets & Products

• Cruise tourism had made remarkable growth over the past few decades.

• The Caribbean, with the North American market, carries the highest berth capacity.

• The largest source markets for cruise tourism are the United States and the United Kingdom.

• United States alone makes up approximately three-quarters of the worldwide cruise market.

Cruise Markets & Products (Continued 1)

• The most rapid growth of cruise tourism was during the 1990s, when demand for international cruise trips grew at a cumulative rate of 7.9%.

• Larger ships=greater economies of scale. • With bigger ships, cruise companies can

reduce the cost per berth & maximize revenue per berth, but for some destination larger ships may mean fewer ports of call.

Cruise Tourism “Product”: Evolution

• Three broad markets; mass, niche & luxury. • Mass market product that characterizes modern cruise

tourism can be divided into 3 categories: 1. Budget segment, characterized by small companies & use of

older ships. 2. Contemporary segment, manifested in most major cruise

lines. Ships in use are generally larger & allow for significant economies of scale, & are thus described as “floating destinations” or “floating resorts”, because of the wide variety of amenities, attractions & services on board.

3. Premium segment, targeted towards upscale markets & may feature specific destination in line with the demands of these markets.

Cruise Tourism “Product”: Evolution (Continued 1)

• Classifying cruise line companies & the products on offer is difficult because of the wide range of products, destinations (ports of call), market access & size of ships. • Berlitz’s lifestyle classification, encompasses the

following groups: 1. Standard; in lower proportion of the price scale for

cruises. 2. Premium; the middle band of price scale, featuring

better amenities, such as accommodation. 3. Luxury; upper grade of price scale where amenities

are considered to be excellent.

Niche Market

• Niche market segment, comprised of more luxurious product components.

• The luxury cruise market is characterized by higher prices as well as premium on-board products and services.

Transnational Corporate Realities of Global Cruise Lines

• Cruise companies operate in multiple markets & service multiple international destinations.

• Cruise companies are often incorporated in countries where corporate tax is minimal.

• Ships registered in countries where employment, health & safety laws are either absent or unchecked can hire crews at low wages & fewer benefits.

• “the flag of convenience regime is at the heart of the cruise industry’s economic competitiveness”.

Transnational Corporate Realities of Global Cruise Lines (Continued 1)

• Cruise ships are structured & operated to be not dissimilar to all-inclusive resorts: many contain casinos, shopping malls, libraries, meeting rooms, discos & night clubs, gym, theatres, bars, variety of restaurants (some with 24-hour service), beauty salons, all designed to entertain guests.

• These large ships, often classified as VLCV, are not only a means of transport, but are the destination itself.

• As well, all-inclusive cruise tourism & all-inclusive resort tourism, feature heavy integration among all aspects of the production cycle. For example; cruise companies will offer packages that feature integration with other commercial operations, including airlines, hotels & various activities at certain ports of call.

Profiling Cruise Tourists

• As cruise tourism is one of the fastest growing forms of leisure based travel, accurate forecasts are important for a

variety of reasons: 1. Knowledge of future demand enables corporation to

make more profitable decisions to be made, such as; port planning & alliances.

2. Costal & island destinations that court cruise tourism are better able to plan for future (re)development of ports & their associated activities.

3. Horizontal corporate entities that are allied with cruise corporations will be able to act strategically in terms of the benefits & potential pitfalls of entering into alliances with these companies.

Profiling Cruise Tourists (Continued 1)

• The most logical indicator of demand for cruise vacations would be the proportion of cruise vacations taken against the overall demand for leisure trips within a certain market.

• However, there are a number of problems with this: 1. Demand for leisure travel can be varied, & thus include

international, national & local travel, thus complicating which market is of prime importance for assessing demand.

2. Because cruise lines operate out of base port (i.e. Miami for most Caribbean lines), cost of transport to & from Miami for those markets outside of the city itself must be build into the demand model. For instance, relative cost of transport to & from Miami for tourists on northern part of Eastern Seaboard, must be factored into the demand for cruise vacations from this segment.

Profiling Cruise Tourists (Continued 2)

• Relating to demand, the motivation for cruise travel is complex, & thus not unlike the motivation for leisure travel in general.

• Market segmentation in cruise tourism has been undertaken in numerous studies both by private companies & companies as scholars with a general interest in marketing & tourism.

• In Europe, one of the largest growing niche markets for cruising is the senior citizens market, mainly because of the strong purchasing power they hold.

Profiling Cruise Tourists (Continued 3)100 cruisers were surveyed & found that the typical cruise profile

consisted of seven elements that demonstrated the reasons to undertake a cruise:

1. partygoer, takes a cruise for the purpose of activities & nightlife. 2. Relaxer, generally less concerned with ports of call, more content

with lounging 3. Enthusiast, high repeat visitation, addicted to cruising. They are

very knowledgeable about the industry & cruise companies.4. Stroller, individuals who travel for the purpose of dressing up or

experience formalities. This group represents passengers escape routine.

5. Seeker, represent individuals for whom cruises are not ideal, interesting in learning about the destination visited, including culture & history.

6. Explorer, interested in visiting places, targeted with such cruises as those featuring Antarctica for example.

7. Dipper, represents vast majorities of cruisers.

Evaluating The Economic Impact of Cruise Tourism

• Cruise passengers will normally spend on a variety of elements associated with their cruise experience, including air transport to & from the cruise base, food on board the ship itself, & in port when a ship makes a temporary stop.

• Added to this, money spent by tourists before they leave for their holiday, i.e. expenditures on items needed for the trip itself, including clothing.

• Individual ports of call benefit from cruise tourism. Not all destinations benefit directly from cruise tourism & the expenditures of cruise tourists. Many cruise ships put into port for a limited time, often only a few hours.

• Vast majority of cruise expenditures take place within duty-free areas or areas specifically controlled by local port authorities.

Functional Marine Transport

• Considered those types of marine transport that acted, as both attractions & mode of transport. However, these are examples of marine transport in which their function is more practical.

• Refer to this kind of usage as “line voyage”, where the main purpose is to travel from point A to point B.

• Between the north & south islands of New Zealand, several companies offer ferry services.

Functional Marine Transport (Continued 1)

• Watercraft are used as a functional means by which other tourism experiences are provided. Whale watching is an excellent example of this.

• In Boston harbour, the use of bigger & faster boats allowed more tourists, in greater comfort, to view whales, but some whales are injured by these watercraft. (www.whales.co.nz)

Ferry Services

• Ferry systems are common in several parts of the world & offer transport for either practical reasons (i.e. to remote areas not easily accessible on land or air) or for other reasons (i.e.in order to allow people to sightsee while on a ferry)

• Ferry services are critical for maintaining accessibility to more remote destinations.

Challenges facing ferry industry: (particularly in Europe)

1. Safety issues2. Creation of fixed land links can render some

ferry operations financially unviable. 3. Price of fuel is a consideration for financial

viability of ferry services. 4. Biggest challenge, is loss of duty-free sales

with the introduction of common markets across Europe.

Challenges facing ferry industry: (particularly in Europe) (Continued 1)

• Another issue that has arisen from ferry services is the environmental impact. (wave damage from ferry crossings have been raised) and pollution from ferries.

• Wave action is destroying sensitive under-water environments & contributing to erosion onshore.

Sustainable Marine Transport

• Many of the environmental concerns over marine transport are around the damage done to sensitive aquatic environments as a result of presence of watercraft of varying sizes.

• Waste management on cruise ships is a concern for both cruise companies & local jurisdiction in which they operate.

Sustainable Marine Transport (Continued 1)

Ocean Conservancy, an environmental NGO, has characterized ship pollution can include:

1. Oil pollution resulting from groundings & collisions or pumping of water. 2. Sewage, which is generally diluted with smaller amounts of water. 3. Grey water, or waste water not from sewage sources, it can include food

waste, shampoos & medical waste. 4. Hazardous wastes can come from on-board photo processing chemicals,

paints, etc. 5. Ballast water, which is often taken on by some ships in order to balance

the overall weight distribution of vessel. 6. Solid waste, for 3000 passengers & crews, about 50 tons of solid waste is

generated over a week-long cruise. 7. Air pollution, from diesel engines, used in large ships. 8. Physical damage, to aquatic ecosystems results from all of the above

combined.

Sustainable Marine Transport (Continued 2)

• In the Caribbean, where cruise tourism is more popular, concerns about environmental stability continue to grow as the number of ships & passengers grows or remain constant.

• Ocean Conservancy, outlined a series of recommendations for the United States cruise industry:

1. Reducing & regulating cruise ship discharges to improve water quality.

2. Improving monitoring & inspection. 3. Strengthening enforcement mechanism. 4. Improving air quality controls. 5. Developing education & training programs. 6. Improving research & development.

Text book

• Duval D. (2007). Tourism and Transport: Modes, Networks and Flows. Multilingual Matters & Channel View Publications. (Chapter 5)