Alexis Papathanassis (Ed.) Cruise Sector Growth
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1 Alexis Papathanassis (Ed.) Cruise Sector Growth
2 GABLER RESEARCH
3 Alexis Papathanassis (Ed.) Cruise Sector Growth Managing Emerging Markets, Human Resources, Processes and Systems RESEARCH
4 Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at 1 st Edition 2009 All rights reserved Gabler GWV Fachverlage GmbH, Wiesbaden 2009 Editorial Office: Claudia Jeske Nicole Schweitzer Gabler is part of the specialist publishing group Springer Science+Business Media. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the copyright holder. Registered and/or industrial names, trade names, trade descriptions etc. cited in this publication are part of the law for trade-mark protection and may not be used free in any form or by any means even if this is not specifically marked. Coverdesign: KünkelLopka Medienentwicklung, Heidelberg Printed on acid-free paper Printed in Germany ISBN
5 1.0 Editor s Foreword: Cruising through Hercules Pillars The strait of Gibraltar connects the Mediterranean with the Atlantic Ocean. For the ancient Greeks, Gibraltar represented the limits of the known world. According Roman mythology, the strait was created by Hercules attempt to cross the Atlas Mountain by breaking through it. The Rock of Gibraltar and the North African coastal peak were believed to be the remains of this action and were known to the ancient world as: Hercules Pillars. An alternative version of the myth claims that the once larger passage was reduced by Hercules in an attempt to protect the Mediterranean from the unknown and its monsters. Momentarily ignoring issues of historical validity related to these mythological accounts, mythology serves as a powerful metaphor for the situation facing the cruise sector nowadays. Hercules Pillars could be perceived as a gate, enclosing the calm familiar waters from the rough, unknown seas. In contrast they could be seen as a portal to the rest of the world. It symbolises an archetypal dilemma: Opportunity vs. danger. The recent, unprecedented growth of cruise tourism is analogous to Hercules Pillars. The proliferation of mass tourism, advances in maritime engineering, technology diffusion and globalisation have opened the way towards mega-liners, floating destinations, mass-cruising, club-ships, budget-cruises, etc. As much as this growth represents an opportunity for the cruise sector, it also draws attention to its monsters. Sailing through those Hercules Pillars is currently a prime strategic challenge for cruise operators. 1.1 The 1st International Cruise Conference: Crew mess The 1 st International Cruise Conference (ICC) and its proceedings, documented here, are an attempt to provide a compass. The conference took place in Bremerhaven (Germany) during the 26th and 27th of September 2008 and was aimed at exploring the current and future challenges facing the enthusiastically growing cruise sector. The predominant question addressed was: What is the nature of the cruise sector s growth and what are the implications for its stakeholders? Given the multidisciplinary and applied nature of the topic, particular focus was placed on detailed discussion and intense debate. During the two days, a variety of challenges, initiatives and ongoing research were presented, revealing a number of supply-related limitations. The various speakers, representing the various levels of the cruise value-chain (i.e. ports of call, crewing agencies, cruise operators, ship-builders, online retailers, and maritime tourism educators) discussed a broad range of important issues resulting from the industry s growth rates and, in many cases, also suggested solution for the emerging challenges. 1.2 Key themes: The monsters The main themes emerging from this discussion are documented in these proceedings and could be summarised under the following headings: v
6 1.2.1 New trends & innovations As the cruise sector evolves, indications of price competition and market polarisation can be identified. Capacity increases, originating from new builds and increasingly larger vessels underline the role of on-board revenue as a determinant of business sustainability. Concurrently, the quest for growth takes place beyond the arena of standardisation and scale economies. Product differentiation (e.g. old timer cruisers, medical services on board) and emerging source markets (e.g. Asia) present an alternative route to profitability Human resource management Cruise operators and crewing agencies are gradually facing sourcing difficulties. Maintaining the required human resource influx to support ship-side operations has become a challenge; in terms of the required volume as well as competence. Sourcing difficulties are not limited to nautical staff, but are also increasingly relevant for guest-service staff (incl. physicians). Within a competitive global market for labour, some customary sector-specific practices and standards need to be re-considered. In this context, crew recruitment and selection, leadership and working conditions on board, as well as education and qualification standards, are the main areas of concern Information technology & standardisation Cruises are relatively expensive and complex in their description, posing a risk-purchase for potential customers. Those characteristics of the cruise product underline the importance of trust and human face for its distribution. Despite the predominance of stationary travel agencies, the internet is assuming a complementary role for cruise retail. Cruise-related online content and social networks are increasingly being utilised as inputs to the purchase decision. Developments in online data-mining and data warehousing offer new ways of gaining market intelligence. The market expects price parity and offer transparency across all distribution channels; online and offline alike. For cruise operators, such developments signal the need for new e-commerce practices and their integration into their mainstream strategies. 1.3 Next steps: Setting the course As the cruise sector s unknowns are many and its monsters are young, the proceedings of a small-scale academic conference are barely adequate to complement such a journey. Cruise-related research remains a rarity in tourism journals and in educational curricula. Moreover, its relevance for practitioners seldom extends beyond the market research domain. The unprecedented growth of the cruise sector necessitates an equivalent development in terms of research scope, intensity and practical relevance. A series of ICCs have been planned for the next years. The aim is to: Consolidate a dispersed academic network Provide a forum for cruise researchers and professionals Propose and maintain a living research agenda, aligned with the cruise sector s realities and needs vi
7 The initiative documented here is intended as a step towards this direction. Even though the corresponding collection of blind, peer-reviewed papers is conclusive, it is by no means exhaustive. Metaphorically, it should be seen as an initial bearing for the cruise sector s Odyssey in the unknown waters of growth. Prof. Dr. Alexis Papathanassis vii
8 Table of Contents 1.0 Editor s Foreword: Cruising through Hercules Pillars... v Alexis Papathanassis, Bremerhaven University of Applied Sciences Table of Contents ix PART A: New trends & innovations Onboard Revenue: The secret of the cruise industry s success?... 3 Michael. P. Vogel, Bremerhaven University of Applied Sciences 3.0 Analysis of the Asian cruise industry and its future implementation Heung Michael Kwag & Eungyu Lee, Boston University 4.0 Cruising by old timers: A chance for local and regional development in Europe Tihomir Lukovi & Ulrike Munninger, University of Dubrovnik 5.0 FAT cruise tourism: The shifting tide of experiences Patsy Morgan, Southampton Solent University 6.0 The future of medical care on cruise ships Werner Kalbfleisch, Cruiseship-Medical-Service PART B: Human resource management & training Leadership: Short-term, intercultural and performance-oriented Wolfgang Lukas, Bremerhaven University of Applied Sciences 8.0 The future of Filipino workforce in the cruise sector Petra Milde, Bremerhaven University of Applied Sciences 9.0 Developments in UK maritime hospitality management Philip Gibson, University of Plymouth 10.0 Game-based learning for cruise management: Taking it to the web Michael. P. Vogel & Ulrike Erb, Bremerhaven University of Applied Sciences PART C: Information technology & process standardisation Online booking in the cruise sector: Determinants of online trust & implications Alexis Papathanassis, Bremerhaven University of Applied Sciences Michael Breitner, Leibniz University Hannover ix
9 12.0 Price variation across channels: A case of ex-southampton port cruises Wai Mun Lim, University of Plymouth 13.0 Online content mining & its potential for cruise management Karsten Sohns & Michael Breitner, Leibniz University Hannover 14.0 Establishing the need for a standardised rating system for cruise ships Janette McCutcheon, University of Gloucestershire x
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