 Onboard Revenue: The secret of the cruise industry’s success?Michael P. Vogel
Chapter 2.0 in Cruise Sector Growth, 2009, pp 3-15 from Springer Abstract: Abstract Based on an analysis of Carnival Corporation and Royal Caribbean Cruises’ published financial statements since 2001, this paper derives five stylised facts of cruise line economics: 1. Net onboard revenues are outgrowing ticket revenues. 2. Ticket prices are barely or not cost-covering. 3. Real ticket prices tend to decline. 4. Demand for mass market cruises is highly price elastic. 5. Demand for items onboard is only weakly price elastic. The paper then develops an argument to explain the first three stylised facts using the last two. It looks at cruise industry market structures off and onboard, analyses the impact of onboard revenue on the optimal pricing of cruises, on profit, and on optimal capacity levels. It concludes that high-margin onboard revenue is likely to be the main driver of cruise industry growth because it gives the cruise lines the possibility to subsidise ticket prices to make cruises more affordable. Lower ticket prices attract more customers who, once onboard, fuel this process with their spending. Keywords: Stylise Fact; Optimal Price; Cost Curve; Occupancy Rate; Optimal Capacity (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-8349-8346-6_1 Ordering information: This item can be ordered from DOI: 10.1007/978-3-8349-8346-6_1 Access Statistics for this chapter More chapters in Springer Books from Springer |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.