Expansion in the Cruise Industry

In the past decade, the world cruise industry has grown considerably as cruise vacations have gained in popularity and affordability. While the industry is still centered around the North American market, in the face of increasing competition and discounting, and a possible drop-off in the high passenger growth rates recorded in recent years, cruise lines are attracting a variety of potential passengers by expanding itineraries around the world and building new and larger ships. Meanwhile, new companies have been able to take advantage of these developments to establish their own niches in the world cruise market, thereby adding further to the growth in the industry.

In its August 1996 report, Cruise Lines International Association (CLIA) reported on the overall growth in the North American cruise market. According to its survey, the average annual passenger growth rate between 1980 and 1995 was 7.6%. While some of the prominent cruise companies have been able to ride along on the back of this growth in demand, other cruise lines have suffered, reporting losses or near losses for several years running. How will the strategies of these companies respond to developments in the industry in order to achieve or retain a place at the top?

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