OVERVIEW OF THE CRUISE LINE INDUSTRY

Prepared by: Nandy M. Gaya, MBA

Professor

0
A Brief History of the Cruise Line Industry

The Classic Ocean Liners

1818 - Black Ball Line was the first shipping company to offer regularly scheduled service
from the United States to England and to be concerned with the comfort of their
passengers.
Earlier before 1818, ocean-going vessels were not primarily concerned with passengers,
but rather with the cargo that they could carry.

1830s – Steamships were introduced and dominated the transatlantic market of

passengers and mail transport. English transport dominated the market at this time, led
by the British and North American Royal Mail Steam Packet (later Cunard Line).

The Royal Mail Steam Packet

1
In July 4, 1840, Cunard Line’s Britannia was the first ship that left Liverpool with a cow on
board to supply fresh milk to the passengers on the 14-day transatlantic crossing.

1844 - The year when the advent of pleasure cruises was linked, and a new industry
began.
1850s and 1860s – This was the time of the dramatic improvement in the quality of the
voyage for passengers. Ships began to cater solely to passengers, rather than to cargo
or mail contracts, and added luxuries like electric lights, more deck space, and
entertainment.
1880s – Ships began to carry immigrants to the United States in “steerage” class. In
steerage, passengers were responsible for providing their own food and slept in whatever
space was available in the hold.

RMS Britannia

1899 - RMS Oceanic was a transatlantic ocean liner, built for the White Star Line. She
sailed on her maiden voyage on 6 September 1899 and, until 1901, was the largest ship
in the world. At the outbreak of World War I in 1914, she was commissioned into Royal
Navy service on 8 August 1914 as an armed merchant cruiser.

2
RMS Oceanic

By the early 20th century the concept of the superliner was developed and Germany led
the market in the development of these massive and ornate floating hotels. The design of
these liners attempted to minimize the discomfort of ocean travel, masking the fact of
being at sea and the extremes in weather as much as possible through elegant
accommodations and planned activities.

The White Star Line, owned by American financier J.P. Morgan, introduced the most
luxurious passenger ships ever seen in the Olympic (complete with swimming pool and
tennis court) and Titanic.

R.M.S. Olympic R.M.S. Titanic

The Titanic was the product of intense competition among rival shipping lines in
the first half of the 20th century. In particular, the White Star Line found itself in
a battle for steamship primary with Cunard, a venerable British firm with two

3
standout ships that ranked among the most sophisticated and luxurio us of their
time.

The sinking of the Titanic

1912 - The Titanic was a luxury British steamship that sank in the early hours of April 15,
1912 after striking an iceberg, leading to the deaths of more than 1,500 passengers and
crew. The sinking of the Titanic devastated the White Star Line.

Titanic created quite a stir when it departed for its maiden voyage from
Southampton, England, on April 10, 1912. After stops in Cherbourg, France, and
Queenstown (now known as Cobh), Ireland, the ship set sail for New York with
2,240 passengers and crew—or “souls,” the expression then used in the shipping
industry, usually in connection with a sinking—on board.

As befitting the first transatlantic crossing of the world’s most celebrated ship,
many of these souls were high-ranking officials, wealthy industrialists,
dignitaries and celebrities. First and foremost was the W hite Star Line’s
managing director, J. Bruce Ismay, accompanied by Thomas Andrews, the ship’s
builder from Harland and W olff.

On April 14, after four days of uneventful sailing, Titanic received sporadic
reports of ice from other ships, but she was sailing on calm seas under a
moonless, clear sky.

4
At about 2330H a lookout saw an iceberg coming out of a slight haze dead
ahead, then rang the warning bell and telephoned the bridge. The engines were
quickly reversed and the ship was turned sharply instead of making direct
impact, Titanic seemed to graze along the sid e of the berg, sprinkling ice
fragments on the forward deck.

1914 - World War I, also called First World War or Great War, an international conflict
that lasted up to 1918 embroiled most of the nations of Europe along with Russia,
the United States, the Middle East, and other regions. World War I interrupted the building
of new cruise ships, and many older liners were used as troop transports. German
superliners were given to both Great Britain and the United States as reparations at the
end of the war.

The Sinking of R.M.S. Lusitania

1915 - Cunard’s other masterpiece, R.M.S. Lusitania which was launched at the
same year with R.M.S. Mauretania in 1907 met its tragic end on May 7, 1915,
when a torpedo fired by a German U-boat sunk the ship, killing nearly 1,200 of
the 1,959 people on board and precipitating the United States’ entry into W orld
War I.

R.M.S. Mauretania R.M.S. Lusitania

5
The Most Glamorous Years for Transatlantic Passenger Ships
The years between 1920 and 1940 were considered the most glamorous years for
transatlantic passenger ships. These ships catered to the rich and famous who were seen
enjoying luxurious settings on numerous newsreels viewed by the general public.
American tourists interested in visiting Europe replaced immigrant passengers.
Advertisements promoted the fashion of ocean travel, featuring the elegant food and on-
board activities.

World War II Interruption to Cruise Industry

Cruise liners again were converted into troop carriers in World War II, and all transatlantic
cruising ceased until after the war. European lines then reaped the benefits of transporting
refugees to America and Canada, and business travelers and tourists to Europe. The lack
of American ocean liners at this time, and thus the loss of profits, spurred the U.S.
government to subsidize the building of cruise liners.

The Beginning of the Modern Cruise Industry

The Modern Ocean Liners
The 1960s witnessed the beginnings of the modern cruise industry. Cruise ship
companies concentrated on vacation trips in the Caribbean, and created a “fun ship”
image which attracted many passengers who would have never had the opportunity to
travel on the superliners of the 1930s and 1940s.

Cruise ships concentrated on creating a casual environment and providing extensive on-
board entertainment. There was a decrease in the role of ships for transporting people to
a particular destination; rather, the emphasis was on the voyage itself. The new cruise
line image was solidified with the popularity of the TV series “The Love Boat” which ran
from 1977 until 1986.

6
Pacific Princess (The Love Boat)

HMS Queen Elizabeth 2 (QE2)

The Queen Elizabeth 2 (QE2), was launched in 1967 and made its maiden voyage
from Southampton, England, to New York in 1969. QE2, 963 feet (294 meters) long and
displacing 70,327 tons, was slightly smaller than its predecessor QE1. Panama Canal
accessibility is one of the considerations in sizing a ship particularly cruise ships. Aside
from being a transatlantic liner it was also used as a cruise ship.

In 1982 the QE2 was briefly requisitioned as a troop carrier in the Falkland Islands War.
In 1986–87 the turbines were replaced with diesel engines. The QE2 made its final
voyage between New York and England in 2008, after having become the longest-serving
ship in Cunard’s history. Later that year the ship sailed to Dubai, where it was handed
over to new owners for refitting as a floating hotel.

7
HMS Queen Elizabeth 2

HMS Queen Mary 2

RMS Queen Mary 2 is a British transatlantic ocean liner. She has served as
the flagship of Cunard Line since succeeding Queen Elizabeth 2 in 2004. As of
2017, Queen Mary 2 is the only purpose built passenger ship designed as an ocean liner,
as opposed to a cruise ship.

The ship was officially named Queen Mary 2 by Queen Elizabeth II in 2004 after the
first RMS Queen Mary of 1936. Queen Mary had in turn been named after Mary of Teck,
consort of King George V. With the retirement of Queen Elizabeth 2 in 2008, Queen Mary
2 is the only transatlantic ocean liner in regular service between Southampton, England,
and New York City, United States. The ship is also used for cruising, including an annual
world cruise.

Queen Mary 2

8
 Inside Queen Mary 2

WHAT IS A CRUISE LINE?

Cruise line is a company that operates cruise ships that operate on oceans and rivers
and which markets cruises to the public.

Cruise lines are distinct from the passengers which are primarily concerned with
transportation of passengers. Though cruise packages provided by cruise lines vary,
there are some features most have in common, such as accommodation, all meals and
entertainment. They may include alcohol and shore excursions, sometimes on additional
payment.

Among cruise lines, some are direct descendants of the traditional passenger lines, while
others were founded since the 1960s specifically for cruising. The business has been
extremely volatile; the ships are massive capital expenditures with very high operating
costs, and a slight dip in bookings can easily put a company out of business. Cruise lines
frequently sell, renovate, or simply rename their ships just to keep up with travel trends.

What is a Cruise Ship?

Cruise ships are also called cruise liners. A cruise ship is a passenger ship used for
recreational and leisure voyages, in which the journey itself and the onboard amenities,
attractions, activities and entertainment options are integrant part of the cruise
experience.

9
Cruise ships operates mostly on routes or itineraries that return passengers to their
originating port which often transport passengers on round-trips.

Passengers or cruisers main interests are the attractions of the ship’s facilities including
accommodations, food, drinks, entertainment and other amenities and the ports visited
(port of calls).

The rapid growth and specialization process experienced by the cruise industry in the last
decades has also affected the design and general aesthetics, materials, size and overall
onboard functionalities, equipment and amenities of modern cruise ships and recreational
vessels to satisfy a clientele more and more numerous and sensitive to quality, who
demands the most diversified services with assurance of satisfaction and excellence,
while providing solutions to the growing concerns about the cruise industry’s
environmental impact on marine and coastal communities and ecosystems.

Types of Cruise Ships

Mainstream Cruise Ship – The most common and known type of cruise ship, marketed
to suit the needs of the majority of passengers, with all sorts of standard hotel or resort
features.

Mega Cruise Ship – A mega cruise ships are able to accommodate more than 5,000
persons, and they are currently the largest and more sophisticated vessels in the world.

10
Luxury Cruise Ship – Luxury cruise ships are equipped with the most sophisticated and
technologically advanced nautical systems, high standard features and luxurious
comforts.

Small Cruise Ship – Cruise ships with a capacity of up to a few hundred passengers
onboard, offering more intimate and relaxing experiences in less familiar destinations.

11
Adventure Cruise Ships – These are cruise ships that are designed and equipped to
provide services that include visits of remote destinations, most commonly inaccessible
to large vessels.

Expedition Cruise Ships – Ships that are especially designed as research vessel, or
icebreaker ships, operated by specialized companies to offer their customers an exclusive
experience in remote destinations.

River Cruise Ships – River cruise ships have a capacity for no more than few hundred
passengers, and are specially designed to navigate rivers and inland waterways.

12