Analysis of an industry based on Cruise lines entails an in-depth cover of the different operations of the industry. There are numerous factors that are associated with the analysis of an industry such as classification of the industry through SID codes, consideration of the legal framework of the industry, the past performance of the industry, present strategies about the industry, economic fundamentals of the industry as well as the growth and industry size outlook. The various reviews that are made about the industry are helpful in determining the nature of the industry in comparison to the various impacts that accrue to it due to both internal and external forces. The different aspects of the industry also focus on whether the industry has companies in the public sector or not. Nevertheless, the analysis of the industry is basically on some rigid and crucial elements which apply to the different companies in a similar industry. Therefore, through industry analysis, it is possible to identify the different characteristics that are present in the different companies under it.
The cruise industry, SIC Codes: 4424 and NAICS Codes: 483111 has experienced extensive growth over last decade. The modern Cruise Line Industry has seen continued growth in spite of the various challenges that have derailed the growth. The outstanding worldwide expansion has seen the advancement of the Cruise Line Industry to the highest widest level. As a matter of fact there have been witnessed drastic developments. The industry embraced the modern version as from the 1970s and has covered different locations such as the North America as well as other world wide locations. As a result of the growth and expansion, there has been rapid development of the tourism industry. The increased popularization of the industry has led to the increased economic advancement of the different regions served by the industry (Klein, 2002).
The growth of the Industry has majorly been influenced by the establishment of several ports and destinations around the globe, multinational clientele as well as onboard personnel with origin from the various continents. In fact, the industry has seen rapid detachment from the communities as well as nations incorporating important economic, legal, environmental and social insinuations. The modern cruising industry has incorporated different aspects of the modern technology and advancement leading to the application of dynamic crisis-resistant techniques such as the airlift options as well as modernized port structures that facilitate cruising as a vocational alternative and only available to the affluent customers. The cruise offers an exciting, eventful, relaxing and obviously an enjoyable experience to the many passengers across the world (Anonymous, 1982).
Following the dynamic expansion of the industry in terms of the services being offered, there has been rapid growth of the industry. In fact, the industry has had an annual average growth rate of 8.5% for the last twenty years. Similarly, an approximate 90 million passengers have been served by the industry since 1998. Actually, the most of the passengers are repeat customers who have embraced the services offered by the industry. As a matter of fact, 60% of the passengers served are those who have had the services in the previous years. As a result, there is tendency that has been seen in the trend of the industry with no sign of slowing. Therefore, it was recorded that approximately 13 million and 13.5 million passengers have been served in the years 2008 and 2009. This is in comparison to the 2007 which registered 12.6 million passengers. The trend is therefore anticipated to forge upwards throughout the twenty first century. Currently, the industry covers more than 60 % of the international tourism industry (Mancini, 2004).
The capacity of the vessels has also seen drastic expansion. For instance, in the 1980s, 40 new cruise ships were built and put in service. In the following years construction of more than 80 vessels led more than 40 % increase including an additional 25 % new state-of-the-art units which are meant to replace ships withdrawn from operations in the subsequent years. The expansion of the industry has also been facilitated by the multimillion investments into new, innovative and completely bigger vessels with the ability to accommodate more than 3,000 passengers. Due to the large number of the passengers who are served by the vessels, lower fares are charged with shorter cruises which enhance economy of scale (Berger, 2004).
The Cruise Industry has had to contend with the various economic and environmental challenges which have characterized many target destinations. Due to the rise of unfavorable dollar exchange rates, many companies have begun cutting back on their fleet including revising order plans for new vessels with one costing over $10 billion. Nevertheless, the industry generates an average over $15 billion every year which actually corresponds to the 79% of the North American and British markets. Thus there has been immense growth of the Cruise Line industry enhancing extensive financial gains to the companies involved (Clarke, 2007).
A look into the lifecycle of the Cruise Line Industry reveals a continued growth and resilience even at the most challenging situations. Changing economic times have, however, put pressure on companies to engage in minimal ordering of more vessels to balance earnings against expenses. Nevertheless, growth is still being seen due to management competence.
Anonymous, (1982), Cruise Travel, Lakeside Publishing Company
Berger, A., (2004), Ocean travel and cruising: a cultural analysis, Routledge Publishers.
Clarke, F.N., (2007), The recreation and entertainment industries: an information sourcebook, McFarland & Co.
Klein, R.A., (2002), Cruise ship blues: the underside of the cruise ship industry, New Society Publishers.
Mancini, M., (2004), Cruising: a guide to the cruise line industry, Cengage Learning Publishers.