Growth Of Cruise Ship Industry Essay Research

Paper

Introduction

In 1977, a television production company, Aaron Spelling Productions,had an idea that a luxury cruise ship would be an ideal setting for a television series. The idea became a reality and “The “Love Boat” was born. The series continued in production for over ten years and is still in syndication all over the world. (www.asb.com/usr/indtvprd/loveboat/ lbp2.htm.)

“The Love Boat” popularized the idea of cruising. Before the series aired cruises were thought to be only for the rich and famous. Now the industry was beginning revolutionize. The industry realized there was a need for change and now cruises are being enjoyed worldwide by people of all ages and social classes.

Changes to the Cruise Industry

Over the last few decades cruises have also adapted to accommodate the ever-changing cruising population. Cruises now range from theme cruises including jazz, singles vacations and holiday cruises. Also, with the health awareness in the market place, many cruise ships now include fitness programs, special meals, lap pools and state of the art gyms. (Vladimir, D. 1997).

One of the biggest changes in the cruise industry is the amount of families taking cruises. In the past, it was rare to see children on cruises. It is for that reason that cruise lines have had to adapt their packages to include younger children, one of the best examples of this is the Disney Cruise line. Disney delivers a cruise vacation with a lot to offer. On a Disney cruise, you can see three new original Broadway-style shows and you can also experience a different dining experience every night. There are oversized rooms that are perfect for families with children and even separate activity areas for kids, teens, and adults. Disney cruises even make a stop at their own private island in the Bahamas, where you can have your own private beach party, snorkel or enjoy other water activities. (http://www.disney.go.com/DisneyCruise/index.html)

Size of Cruise Market

The cruise industry is an ever-growing industry. The Cruise Lines International Association estimates that approximately 5.2 million people took a cruise somewhere in the world in 1988. (http://www.cruising.org/). The cruise industry has experienced strong growth over the last two decades and the majority of the growth has been in the North American market. In 1988, cruises embarking from North American ports comprised the majority of the worlds cruise markets both in terms of revenue and passengers. Passengers embarking in North America made up 61% of the worlds total cruise passengers and 67% of the worldwide cruise industry revenue. (EPGC, 1990)

The North American cruise industry is over a $7 billion business that carries almost 5 million passengers annually and directly employs approximately 50,000 people. It is projected that by the end of the year 2000, as many as 8 million passengers per year will cruise. Cruising has become the fastest growing segment of the vacation business for the last decade; beating land based resorts, theme parks, and other attractions. Studies show that whether people are first time cruise users or repeat users, the majority of them rate cruising as better than any other vacation experience and ninety percent of them expect to take more cruises in the future.(Vladimir, 1997)

Growth of the Cruise Industry

Of the North American growth, a large percentage has been from the growth in Nova Scotia, especially Halifax. One of the main reasons why Halifax has seen so many more cruise ships is because the port of Halifax is an ideal port of call for cruise ships. Halifax’s convenient location on the Great Circle Route between Europe and North America provides easy access to cruise ships whether the cruises are on North American East Coast routings or Transatlantic routes. Halifax harbour also has a deep draft with minimal tidal variations which allows for easy passage of large cruise ships.(http://www.portofhalifax.ca)

In 1999, 73 cruise ships called at Halifax Port Authority facilities. This is up from 53 cruise ship calls in 1998 and represents an increase of 38%. Compared to 33 cruise ships and 15,800 passengers in 1988. A Port record was set again this year for the most number of cruise line passengers in Halifax, cruise vessels brought 107,837 passengers to our port in the 2000 cruise season. This is a staggering 125% increase over the 1998 cruise season when the record was set at 47,798 passengers. (http://www.portofhalifax.ca)

One of the reasons why people in the cruise ship industry believe that North America is experiencing such an increase in the number of people taking cruises is the change in the demographic profile of the North American population. The increasing percentage of the population that are middle aged and older will expand the potential cruise market. The cruising market tends to be single people or couples, people without children, and well educated.

Table 2

Socio-Demographic Characteristics of Cruise Ship Passengers

Sex

Male 53%

Female 47%

Children in household

Yes 23%

No 77%

Age

25-39 28%

40-59 28%

60 or over 44%

Household size

1 to 2 63%

3 to 4 29%

5 or more 8%

Average (2.6)

Education

High School 28%

Some College or more 72%

Source: Cruise Lines International Association (http://www.cruising.org/)

This market profile fits well with the existing visitors to Nova Scotia who tend to be middle aged and older couples, well educated in professional and management positions.

There is even potential for more growth in cruise ship industry. In 1988 there were 120 cruise ships that serviced North America. These ships ran from the large budget cruises to the small economic cruises allowing people a large range of cruises to choose from. Studies show that satisfaction from cruise ships is high. This satisfaction leads to repeat business. Today the cruise industry can count on between 60% and 90% repeat business from there existing passengers. (Vladimir, D. 1997)

Economic Impact of Cruise Ships

The cruise ship industry is very good for North America, especially in Halifax. In 1988, the average benefit per cruise ship passenger visiting the Atlantic Coast is $150.67. This is made up of $48.12 in vessel related expenditures, such as port charges and $102.55 in passenger related expenditures including air travel, tours and shopping. (EPGC, 1990) The cruise ships are excellent for the Nova Scotia economy and tourism in general. The revenue increased from the passengers who have stopovers in Halifax is what keeps a lot of local businesses afloat. Local business owners, especially those located on the waterfront, look forward to the cruise ship season. Many business owners recognize a noticeable difference in their business when there is a cruise ship docked in the harbour. Cruise ships mean increases in business for local restaurants, shops, and tours.

The cruise season was longer this year; it began on May 5 and ended October 30. More than 114,000 cruise ship passengers visited in this time period. According to the Halifax Port Authority, a total of 15 cruise lines docked 75 boatloads of tourists in Halifax this year, up from 53 the previous year. This growing number of ships increased direct passenger spending in Halifax from $3.3 million in 1998 to an expected $7 million this year. (Ryan, C. 1999)

Encouraging the Growth of the Cruise Ship Industry In Halifax

The cruise industry is one of the fastest growing industries in Nova Scotia tourism. For that reason, the Halifax Port Authority is doing all they can to attract more cruise lines to come to Halifax. The Halifax Port Authority, in conjunction with other local interests, manages a cruise ship welcome program that encourages passengers to disembark the ship for the day and gives visitors a positive East Coast experience. Under this program, passengers arriving at the Port of Halifax receive a traditional Nova Scotian greeting that involves the Town Crier, pipers, drummers, and highland dancers performing on the brow as ship lines are fastened. After disembarking, a local tourism representative is available to greet passengers and they can also visit the Community Kiosk to receive directions, gather information, or pick up brochures and can shop at the waterfront shops and boutiques. (www.portofhalifax.ca)

The Halifax Port Authority has done a lot in the last few years to encourage cruise ships to visit Halifax. The Port Authorities have improved pedestrian and vehicle access at ocean terminals. Also in 1999, the Port of Halifax spent a million dollars renovating Pier 21 to better accommodate the passengers and crews of visiting cruise ships. The newly renovated Pier 21 offers 23,000 square feet of interior space, public washrooms and telephones, and an area large enough to hold 40 buses. (www.portofhalifax.ca)

Conclusion

It is obvious that the cruise ship phenomenon has hit Nova Scotia, and it looks like it’s here to stay. The cruise ship industry is great for our province; it helps our economy but it also introduces people from away to the beauty we have to offer here which indirectly can have an impact on our province’s economy. Many people that get a quick glimpse at what Nova Scotia has to offer will return to visit again, probably not by cruise ship, but in such a way that they will have more time to relax and explore our wonderful province. Over the past few years, the Halifax Port Authority and Tourism Nova Scotia have been working hard developing marketing strategies that will attract cruise ships to Halifax. These strategies must be working because the growth of the industry is vibrant with increases in cruise ships and passengers coming to Halifax. The industry can and will grow in this region in the coming years, it is inevitable.

Bibliography

Ryan, C. 1999. Halifax’s popularity as cruise ship destination continues to increase. http://novanewsnet.ukings.ns.ca/stories/99-00/991014/cruises.htm

The Economic Planning Group of Canada (EPGC) 1990. Summary of product and market research for cruise ships: Nova Scotia market match.

Vladimir, D. 1997. Selling the sea: an inside look at the cruise ship industry. John Wiley and Sons Inc. New York City, USA.

“The Love Boat ” Basics. www.asb.com/usr/indtvprd/loveboat/ lbp2.htm.

http://www.portofhalifax.ca

http://www.cruising.org/

http://www.disney.go.com/DisneyCruise/index.html