THE GEOGRAPHY OF CRUISE SHIPPING:
ITINERARIES, CAPACITY DEPLOYMENT AND
PORTS OF CALL
Jean-Paul Rodrigue
Dept. of Global Studies & Geography, Hofstra University, New York, USA
Theo Notteboom
ITMMA - University of Antwerp and Antwerp Maritime Academy, Belgium
5th Asian Logistics Round Table & Conference
Vancouver, Canada, June 14-15 2012
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Ship Happens…
Costa Cruises: -25% bookings (May 2011/12)
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The Three Fundamentals of Cruise Shipping
Itineraries
• Attractiveness (seasonality)
• Customers availability and preferences
Capacity Deployment
• Type of ship
• Duration
Ports of Call
• Sequence and schedule
• Choice of turn port
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THE ORIGINS AND GROWTH OF
CRUISE SHIPPING
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Once Upon a Time…
SS France, 1969
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Powered Transatlantic Passenger Modes and the
Demise of the Liner
Steamship
• 1830s to 1960s (About 6 days; 4 days by the 1930s)
Dirigible
• 1931-1937 (About 80 hours)
Sea Plane
• 1934-1946 (About 15 hours)
Propeller Plane
• 1934-1960 (11 hours)
Jet Plane
• 1958- (7-8 hours); Supersonic jet (1976-2003: 3.5 hours)
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Liners and Jet Planes: Basic Economics
SS France (1962-1974)
4 days
2,000 passengers (one
way)
Boeing 747-100
(1970-)
8 hours
3,200 passengers (1
roundtrip per day)
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MARKET DYNAMICS IN CRUISE
SHIPPING
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18
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Millions
Global Cruise Passengers Carried, 1990-2011
20
Recession
16
14
12
10
8
6
4
2
0
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Cruise Source Markets, 2010
Japan
0.195
Australia
0.370
Asia (w/o Japan)
0.890
Latin America
0.984
UK
1.560
Continental Europe
3.409
North America
10.781
0
2
4
6
8
Millions of Customers
10
12
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Revenue and Expenses per Average Cruiser, 2011
Revenue ($1,663)
$38
$76
Expenses ($1,485)
Other
$57
$73 $51
$100
Ticket
$208
Casino & Bar
Excursions
$1,286
Spa
Other
On-board services: 20-30% of revenues
$295
$160
$217
$183
$193
$213
Agent
commission
Ship fuel costs
Corporate
operating costs
Payroll
Amortization
Food &
Beverages
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The Global Cruise Port System
Oceania / South Pacific
Transatlantic
South America
Mexico Pacific/Hawaii
Alaska
Europe/Scandinavia
Mediterranean
Caribbean
2.9
3.1
5.3
5.7
6.7
8.5
42.7
0
A Supply-Based Industry
70%
23.0
5
10
15
20
25
30
35
40
45
Capacity in million bed-days
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Full House: Occupancy Level of North American
Cruises, 2004-2011
14,000
Number of Cruises
12,000
10,000
8,000
6,000
4,000
2,000
0
Less than
70%
80%
90%
100%
110%
120%
130%
More than
140%
Occupancy Level
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Seven is the Magic Number: Duration of North
American Cruises (in nights), 2011
2000
Sweet Spot (47% of all cruises)
1800
Number of Cruises
1600
1400
1200
Bahamas &
Western
Caribbean from
Florida
1000
800
600
400
South Pacific
200
0
2 or
less
3
4
5
6
7
8
9
10
11
12
13
14
15
and
more
Number of Nights
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Share of Monthly Cruise Passengers by Region of
Embarkation, 2012
100%
90%
80%
70%
60%
50%
40%
30%
Other
South America
North America - ex. Alaska &
Mexico
Mexico & Central America
Europe - Southern
Europe - Northern
20%
10%
0%
Caribbean/Bahamas
Australia - New Zealand
Alaska
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Share of Monthly Cruise Passengers by Region of
Destination, 2012
100%
90%
80%
70%
60%
50%
40%
30%
Other
South America
North America - ex. Alaska &
Mexico
Mexico & Central America
Europe - Southern
Europe - Northern
20%
10%
0%
Caribbean/Bahamas
Australia - New Zealand
Alaska
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1.1
1
0.9
Other
0.8
Canada/New England
0.7
Bermuda
0.6
Alaska
0.5
Hawaii
0.4
Mexico (Pacific)
0.3
Southern Caribbean
0.2
Eastern Caribbean
0.1
Bahamas
December
November
October
September
August
July
June
May
April
March
February
0
January
Millions
Number of Monthly North American Cruise
Passengers by Destination, 2011
Western Caribbean
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Market Share of Main Cruise Lines, 2011:
Horizontal Integration and the Illusion of Diversity
Carnival Cruise Lines
(49.2%)
Royal Caribbean Lines
(23.8%)
Norwegian (7.1%)
Carnival (21.1%)
Royal Caribbean (17.0%)
MSC Cruises (5.8%)
Costa Cruises (7.2%)
Celebrity (4.7%)
Disney (2.9%)
Princess (6.4%)
Other (2.1%)
Star Cruises (1.8%)
AIDA (4.4%)
Others (27.0%)
Other (9.4%)
Holland America (3.7%)
Other (6.4%)
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NETWORK CONFIGURATION AND
PORTS OF CALL IN THE CRUISE
SHIPPING INDUSTRY
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Key Cruise Itinerary Design Variables
Customer-related considerations (demand)
• Optimal length of cruise, shore time/sail time balance
• ‘Must see’ destinations, guest satisfaction
• Seasonality
• Synchronization with air transfers
• Spending behavior and budget
Operational considerations (supply)
• Number and order of port calls
• Determination of turn ports (+ synchronization with air transfers)
• Vessel speed and vessel size
• Berth capacity, accessibility of ports
• Distances between ports of call
Strategic considerations
• Demographics of customer base
• Itineraries of competing cruise operators
• Anticipation of growth markets
• Supply push to create new cruise markets
• Revenue-generating potential of daytrips, onboard facilities, etc..
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The Advantages of Mobile Assets: Types of
Itineraries
Perennial
• Resilient demand (with high/low periods)
• Stable weather conditions
Seasonal
• Periodic market potential
• Usually summer
Repositioning
• Between perennial or seasonal markets
• Mostly between the Caribbean and the Mediterranean
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A complex vessel deployment strategy
Silver Wind (Silversea Cruises), LOA = 157m, beam = 21.5m
296 guests in very luxurious conditions
Silver Wind - Silversea Cruises
= West Med
= Adriatic
= East Med
= Middle East
= Southern Africa
= Atlantic
Bar = Barcelona, CT = Capetown, Dub = Dubai, Ist = Istanbul, Lis = Lisbon, LP = Las Palmas, Mau = Mauritius, Mon = Monte Carlo, Pir = Piraeus,
Rom = Rome (Civitavecchia), Saf = Safaga (Red Sea), Ven = Venice
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
April 2012
West-Italy, Adriatic / 6
June
Pir
Ven
August
November
December
Ven
Adriatic, Aegean, Turkey / 7
Aegean, West-Italy / 7
Aegean, Adriatic / 8
Pir
Ven
Ist
Adriatic, Aegean, Turkey / 7
Turkey, Black Sea / 9
Mon
Turkey, Aegean / 9
Pir
Pir
Saf
Aegean, Red Sea / 6
January 2013
CT
Southern Africa / 6
February
CT
Southern Africa, West Africa, Canary Islands / 7
April
Aegean, Near East, Turkey / 11
May
Canary Islands, West-Atlantic / 9
West Italy, Adr. / 7
Number of cruises =
Averate number of nights =
Average number of port calls =
Ist
Turkey, Aegean, Near East / 9
Ven
Turkey, Aegean / 7
Aegean, Adriatic / 6
Ist
Rom
Dub
Southern Africa / 8
CT
LP
Pir
Adriatic, Aegean / 9
Red Sea, Gulf / 3
Southern Africa / 6
Spain, South France, West Italy / 8
Turkey, Aegean / 8
Pir
Pir
Aegean, Turkey, Near East / 11
Mau
CT
Lis
Ist
Turkey, Aegean / 9
Spain, West-Italy / 7
West-Italy, Adriatic / 7
Ist
Middle East, India, Southern Africa / 8
LP
Ist
Turkey, Black Sea / 7
Dub
Ist
Bar
Ist
Aegean, Turkey, Near East / 11
March
no service
no service
Ven Adriatic, West Italy, South-France / 8
Aegean, Turkey / 7
Middle East / 4
Ist
Rom
Adriatic, Aegean, Turkey / 8
September
October
31
Rom
May
July
30
Southern Africa / 6
Canary Islands / 7
West Italy, Aegean / 9
Aegean, West Italy / 8
Pir
Rom
Ven
37
9.5
7.6
Standard deviation =
Standard deviation =
Source: own compilation based on schedules
2.5
1.8
No. of port calls
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Simple vessel deployment strategies
Freedom of the Seas - Royal Caribbean Cruises - LOA of 339m, beam of 39m - maximum capacity of 4,370 passengers
Period
Apr 29 to May 6, 2012
May 6-13
May 13-20
May 20-27
Nights Ports of call and order of calls
7
7
7
7
Port Canaveral
Port Canaveral
Port Canaveral
Port Canaveral
- Labadee
- Cococay
- Labadee
- Cococay
- Falmouth - Grand Cayman - Cozumel - Port Canaveral
- Saint Thomas - Saint Maarten (Phillipsburg) - Port Canaveral
- Falmouth - Grand Cayman - Cozumel - Port Canaveral
- Saint Thomas - Saint Maarten (Phillipsburg) - Port Canaveral
Region
Caribbean
Caribbean
Caribbean
Caribbean
………………… same two cruises repeated all year round
Apr 7-14, 2013
Apr 28 to May 5, 2013
7
7
Port Canaveral - Cococay - Saint Thomas - Saint Maarten (Phillipsburg) - Port Canaveral
Port Canaveral - Labadee - Falmouth - Grand Cayman - Cozumel - Port Canaveral
Caribbean
Caribbean
Allure of the Seas - Royal Caribbean Cruises - LOA of 360m, beam of 65m - maximum capacity of 6,360 passengers
Period
Apr 29 to May 6
May 6-13
May 13-20
May 20-27
Nights Ports of call and order of calls
7
7
7
7
Fort Lauderdale
Fort Lauderdale
Fort Lauderdale
Fort Lauderdale
- Nassau - Saint Thomas - Saint Maarten (Phillipsburg) - Fort Lauderdale
- Labadee - Falmouth - Cozumel - Fort Lauderdale
- Nassau - Saint Thomas - Saint Maarten (Phillipsburg) - Fort Lauderdale
- Labadee - Falmouth - Cozumel - Fort Lauderdale
Region
Caribbean
Caribbean
Caribbean
Caribbean
………………… same two cruises repeated all year round
Apr 7-14, 2013
Apr 14-21, 2013
7
7
Fort Lauderdale - Labadee - Falmouth - Cozumel - Fort Lauderdale
Fort Lauderdale - Nassau - Saint Thomas - Saint Maarten (Phillipsburg) - Fort Lauderdale
Caribbean
Caribbean
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Cruise Passengers Visits, Caribbean, 2011
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Selected Cruise Itineraries, Caribbean
3-5 nights / 2-3 port calls
Geography
History / Culture
Market proximity
7 nights / 3-5 port calls
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Cruise Passengers Visits, Mediterranean, 2011
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Selected Cruise Itineraries, Mediterranean
World class cultural amenities
Market proximity
Diversified sub-regions
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Functional Typology of Cruise Ports
Destination Cruise Port
Gateway Cruise Port
Balanced Cruise Port
The cruise port is the sole
destination.
Limited, if any, excursions
outside port area.
The cruise port is not a
destination, but a point of
embarkment (turn port).
Excursions outside port
area.
The cruise port is a
destination and a point of
transit for excursions.
High quality cultural or
physical amenities.
No other significant
amenities in proximity.
Security and safety issues.
No significant cultural or
physical amenities.
Port servicing major
touristic destination.
Various balances between
the amenities offered at the
port and in the region.
Venice, Barcelona, Labadee
(Haiti), Cococay (Bahamas)
Civitavecchia, Livorno
Miami, San Juan, Nassau,
Piraeus, Lisbon
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Most Active Cruise Ports by Passenger Visits, 2011
Katakolo
Ketchikan
Juneau
Livorno
Roatan
Dubrovnik
Southampton
Piraeus
Venice
San Juan
Grand Cayman
St. Maarten
Barcelona
Port Canaveral
St. Thomas
Civitavecchia
Miami
Fort Lauderdale
Cozumel
Nassau
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
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Is the Future Co-Location? Ensenada Cruiseport
Village (HPH)
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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).
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Thank you for your attention
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