Of course, Touristologists!!! At the end of the day, a cruise is a kind of Hotel/Resort with similar behavior to a transport company. We have to remember that the average length of stay in a cruise is seven days doing 3-4 stops. So, you go to places, but most of the time you are in a kind of resort with plenty of activities. Anyway, lodging or transport… clearly, it is related to Tourism, therefore, Touristology will give you the necessary tools to become AND remain competitive!
Globally, the cruise market is growing in number of passengers (21.3 million passengers in 2013 and expecting 21.7m in 2014). What about in revenues AND profits? -Ask Touristology’s voice!
It is a closed business (Economists like to name it oligopoly) where three players get 80% of passengers and 72% of revenues. Those three players are:
Carnival, Royal Caribbean and Norwegian Cruise Line
The cruise industry is a big success in North-America, origin of 55% of all passengers. In Europe the market is also growing (even though the market experienced a backward movement after the, tragically, famous accident)
One of the tools that Touristology provides is the following matrix. Let’s see if we can use it in order to analyze and provide some advice for the cruise sector!
You can learn more about this matrix here…
And here… (don’t miss the video!!!)
This matrix reminds us that, in order to be and remain competitive, you can follow the Innovation path or Standarization path….
In the standardization path we have examples of successful companies: Ryanair, McDonald’s, TuneHotels….. The basic strategy is to get economies of scale and then offer the lowest possible price, do promotion based on discounts…. It can provide good results BUT if you want to beat the three dominant players in the cruise sector OR one of them wants to increase their profit… then you will have to explore new segments, new channels of value… Welcome to the Innovation path!
There are different ways to follow the innovation path (some of them are not yet discovered! Are we talking about innovation, right?)
A) Selling using my POSITIONING in the market. Do you want to see some examples?
A-1) Disney. They don’t have any problems selling their cruises… People love to spend time with Disney Characters!!! If you are selling experiences, like Disney does, you are not selling cruises anymore. The cruise is just a place (a commodity as many hotels have become) where you enjoy the important thing… the feeling of being part of Disney’s world!
A-2) Virgin looking for the segment I-wanna-be-Richard-Branson aimed at younger generations.
A-3) National Geographic who, clearly is selling experience over luxury.
A-4) Scientific American. Some people believe that tourism is just searching for happiness… But Tourism can help you to achieve other important things, as well. Learn new things? Gain international contacts with experts in the cutting edge of science? To change your regular perspective?
Those examples are innovation and My own 1,2,3. They identified a segment, customized their product and distributed it through their travel agencies and their own meeting places (Shops of Disney, Disney Channel, Virgin outlets, National geographic channel and magazine!!!)
B) Other option for walking the Innovation path is to rely on Specialization (To me, the best!): What about cruises for heavy metals fans as Royal Caribbean tried through a partnership with TUI? It was a big success. If you are selling the experience of enjoying concerts of your favorite music band, together with other people that feel the same, then they feel part of a community… Then you can add value selling customized ancillary products (tattoos, Karaoke, music lessons, you-name-it…), promote direct bookings, use the long tail in order to promote and commercialize your business.
Of course, when you are selling a cruise, you are selling experiences BUT, as all Touristologists know, if you don’t use specialization power, then the price will become the most important driver to choose a cruise or a substitute product.
If you follow this advice you wouldn’t sell just a cruise anymore, you would sell the benefits of a trip where you can get what Touristology provides…
Community building, New perspectives…creativity, isolation from the usual place….
As I said here “Touristology is a science related to Tourists travelling/moving from one place to another for travel reasons or for necessities that they can better achieve through a trip: Getting and keeping international contacts; healing wounds (both physical and psychological); learning new things (specially multidisciplinary ones); giving a bust to their creativity, as Alain de Botton said “Journeys are the midwives of thought”; improving relationships (organization team building, couple, grandparents-grandson, single parents…)…”
You can read here some ideas about how to use specialization in order to transform your cruise into the place to be.
Do you think that you can improve the profits of a player in the cruise market using those matrixes? Do you think that you can help (OR BE) a new intermediary in this growing sector?
Do you want to become a Touristologist? I will be here waiting for YOU!!!… By the way… Happy New Year!
