Posted By Cruise Market Watch / 21st July 2012
The cruise industry is often defined as a niche to the global tourism industry. The reason is that, in contrast with other branches of the tourism sector, the cruise industry is mostly driven by supply and not by demand. In fact, cruise lines make profit by providing more capacity (ships) and itineraries.
However, these are only two of the marketing strategies that cruise lines use to increase profits. Experts in this industry know that the cruise prices fall when too many ships are positioned in the same port/area. How to overcome this problem?
In recent years, an interest has arisen in small/local ports as a possible way to attract a new typology of cruisers. “Off beat” ports are synonym of “new”, “less crowded” and “interesting”, and everyone wants to feel special, even when choosing a mass type of vacation such as a cruise.
This is evidenced by comparing 2011 and 2012 PortPulse rankings. Notice in the table below the percentage of unique sailings has increased by double digits in smaller ports (ranked 101 and higher) compared to the low single digits in the largest ports (ranked 1-100).
But why is it problematic for cruise lines to add small/local ports to their itineraries?
Features of ship ports and problems concerning small ports
Experts in the cruise industry claim that this business is not about destinations but about itineraries and routes. Hence, it’s understandable that, to be taken into consideration, small ports have to be in the right circle route. Given that cruise ships can cover 200 nautical miles per night, the small ports need to be within this distance parameter from other big and known ports.
Moreover, small ports are required to present a not very deep draft, which is a necessary condition for the cruise ships’ mooring, together with other specific technical features.
From the point of view of the port profile, small ports often don’t offer the same quantity of local amenities of bigger ports. When booking a cruise, cruisers not only look at the on-board activities, but also and mostly at the excursions available on the locations of the cruise itinerary.
However, the most challenging of the issues are the concerns that can arise as regards to the impact of cruise tourism on the existing economic and environmental resources. Even when economic projections confirm a potential economic growth of the sea area, strong protests can be held against the cruise companies. This is often the case in areas where most of the citizens work in the fishermen industries. Concerns range from water pollution, which may affect the fishing activity, to the changes to the historical and cultural assets of the area.
A new era for the cruise industry?
Even though little-known ports require a challenging plan of promotion, many cruise lines have focused on this aspect to increase their profits.
2011 saw some interesting statistics as regards to the cruise lines that have added less-explored ports to their itineraries, especially in North America.
Would this strategy also be applied to other areas of the world? For example, refer to the table below focused on the port of Benoa, Bali. As illustrated by passengers sailed, it has moved up the PortPulse rankings from 623rd in the world in 2011 to 394th in the world in 2012.