CRUISE SHIP AS THE

PRODUCT

The Product
Cruises have three different economic features:
Inelasticity

a cruise ship is perishable because it cant be stored

Heterogeneity

the product consists of a variety of components that make the cruise

experience different for each customer

Complementary

the cruise is not one single experience but a host of elements that
combine to form the cruise experience

SECOND-DEGREE PRICE PERCEPTION

Two-tier pricing system
First purchase-ticket to get on the boat
Additional purchases during the vacation

Cruise Line Excursions

Alcoholic/Soft Drink Beverage Packages

Classic Beverage Package (beers, wines and soft drinks) $45

Premium Beverage Package (addition of premium alcoholic cocktails) $55

On-Board Sales

Top 3 most profitable areas

Casino & Bar 53%
Shore Excursions 19%
Spa 10%

THIRD DEGREE PRICE PERCEPTION

Allows consumers to self-select into their desired price range

Different classes of boats within a cruise liner

Larger/Newer the ship, more luxurious

Different classes of room choice

Interior, Ocean View, Balcony, Suite

Room Class Price Perception

Ticket Price per Night Sale Date - April 14
$600
$512
$500
$400
Price per Night $

$289

$300
$200
$126

$162

$100
$0

Allure of the Seas

Inside
Ocean
Balcony
Suite

Temporal Pricing
(Time-based pricing)
Seasonality
Pricing jumps in the summer months and Christmas week
Itinerary (5 days, 7 days, 8 days, 12 days)
Travel during warmer summer months and colder winter
months

Inter-Temporal Pricing
As cruise approaches, consumer demand becomes increasingly more

inelastic, allowing cruise lines to raise prices.

However, immediately before the departure date, cruise lines
attempt to maximize capacity, leading to last-minute price
decreases.
Brochures are carefully designed to encourage advance booking,
through such strategies as making off-season prices look
dramatically lower than their on-season counterparts and promising
discounts for booking early.

How far in advance cruise was

planned?
3 % - less than one month
27% between one and three months
35% between three and six months
29% between sic and twelve months
6% more than one year

Documents Needed
Confirmation ticket or voucher

Embarkation date and hours

Dress requirements

Port location
Cabin number
Dining room seating
Booking ID number
Terms and conditions of the voyage

Cruise booklet
Onboard credit policies
What clothes to bring

Documents Needed
Passport / visa
Gift order
Color-coded luggage tag
Immigration and customs forms (if needed)
Travel insurance form
Itinerary
Air tickets and hotel information
Ship card