Cruise Sector Challenges: Making Progress in an Uncertain World

Philip Gibson / Alexis Papathanassis / Petra Milde (Eds.) Cruise Sector Challenges

GABLER RESEARCH

Philip Gibson / Alexis Papathanassis Petra Milde (Eds.)

Cruise Sector Challenges Making Progress in an Uncertain World

RESEARCH

Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://dnb.d-nb.de.

1st Edition 2011 All rights reserved © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011 Editorial Office: Ute Wrasmann | Nicole Schweitzer Gabler Verlag is a brand of Springer Fachmedien. Springer Fachmedien is part of Springer Science+Business Media. www.gabler.de No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the copyright holder. Registered and/or industrial names, trade names, trade descriptions etc. cited in this publication are part of the law for trade-mark protection and may not be used free in any form or by any means even if this is not specifically marked. Cover design: KünkelLopka Medienentwicklung, Heidelberg Printed on acid-free paper Printed in Germany ISBN 978-3-8349-3167-2

Acknowledgements This book is dedicated to the fellows and associates of the Cruise Research Society. It is their openness, enthusiasm and commitment that is enabling us to gradually develop an emerging knowledge base in the area of cruise tourism. Particular thanks to the co-authors for their contributions. Moreover, our gratitude goes to the Bremerhaven University of Applied Sciences and rectorate for providing the resources necessary to finance and produce this piece of work. Our appreciation also goes to Ute Wrasmann and Nicole Schweitzer from the Gabler Verlag (our publishers) for their patience, professional support and flexibility over the last years. Prof. Dr. Philip Gibson Prof. Dr. Alexis Papathanassis Prof. Dr. Petra Milde

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Editors’ foreword: analogies and the cruise industry The world of cruising generates easy, almost clichéd, analogies in respect of the business of this form of holiday. ‘In deep water’ or ‘all at sea’ are examples of the efforts of those who seek to create an attention grabbing headline. Yet, during these challenging post recessionary times, the cruise business can be represented as an olden day galleon, sailing the seven seas and making its way in uncertain waters and in unpredictable weather. Like these rather cumbersome historical vessels the cruise industry manages to stay afloat even in the heaviest seas. The captains of this cruise industry seem to have a weather eye for what may be over the horizon. Indeed there is even a sense of the industry being able to harness its overwhelmingly unique characteristic and being able to change course to avoid what might lead to inevitable catastrophe for less flexible industries. Clearly, the cruise industry continues to make progress in this uncertain world. Ship building since the crescendo marked by the introduction of the Oasis and Allure of the Seas may have slowed down and new ship orders may have faltered over the last few years but signs are that this is but a momentary hesitation in the seascape of cruise history. The challenge for cruise operators is to come to terms with a changing world where the realities of the past are not constant. The hegemonies of the pre-recessionary world are likely to be different in tomorrow’s post-recessionary world.

The second international cruise conference This textbook presents a compendium of important issues that were discussed at the 2nd International Cruise Conference in Plymouth (UK) between the 18th and 20th February 2010. The conference title was: 'Cruise industry challenges: making progress in an uncertain world' and the theme of the conference was to consider emerging issues, problems and solutions for the cruise industry at a time when trading conditions were perceived to be highly volatile. The focus for the conference was to provide a platform for cruise industry professionals and academics to engage in dialogue, to share research findings and to examine good practice. The conference attracted a wide range of delegates from industry, from academia and from cruise related businesses. This helped to create an atmosphere of engagement and an opportunity to share research findings and to examine good practice. The benchmark, to create quality in cruise related research and to encourage active research in this field, which was established during the 1st International Cruise Conference in Bremerhaven in September 2008 and subsequently enhanced with the introduction of the Cruise Research Society, played a major part in helping to achieve the outcomes for the conference in Plymouth.

Key themes The main themes that arose from the conference and which are presented in this textbook are as follows:

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Market and trends The first part of the textbook within the theme of market and trends starts by reflecting on crowding and cruise customer expectations. Brochures and on-line content portray ships and destinations neutrally in relation to the possible impacts of large scale cruising but what are the issues in terms of customer satisfaction if what they see is considered unrealistic? The cruise season is a construct that bears examination in terms of strategic development and the consequences on markets and operators. Developing this further the next chapter considers forecast practices when considering increasing capacity at a time of variable growth. Thereafter, implications of Flags of Convenience are considered in relation to competitiveness and factors governing choice are reflected upon. Finally, branding of onboard restaurants by making use of celebrity chefs to generate uniqueness and add to customer choice is examined. Destinations and sustainability What place does traditional ocean cruising have in a fast changing industry dominated by large corporations with the power to construct and develop brands for a changing market. This first paper concerning sustainability is a study of what some believe may be a dying market but what others consider is a blueprint for industry success. As ships anchor off destinations their presence can cause unseen problems below the waterline. This chapter presents a study into the environmental impacts of large cruise ships dropping anchor in Falmouth Bay. Processes and practices Two major international conventions; SOLAS and MARPOL affect all international shipping. These and Codes of Practice such as the ISM Code and the ISPS Code are examined using case studies to identify key issues for cruise operators. Latest regulations consider safety onboard the world’s largest cruise ships and have focused on ensuring ship design assures improved survivability so the ship is, in itself, its own lifeboat. Increasingly, customers are becoming adept and prolific in sharing their experiences online. How do cruise operators make best use of electronic word-of-mouth (eWOM)? Human resources The Maritime Labour Convention (MLC) is a topic worthy of debate and here, in this first chapter on human resources, the International Labour Organisation sponsored convention is considered for what it should achieve in terms of social responsibility. The industry continues to struggle to secure a competent workforce in an ever changing global context. This chapter considers the mechanisms and issues concerning crew retention. Cruise education and research The first chapter in this theme examines cruise education and what is done in respect of the focus, content and approach to develop and deliver the programmes. Research into business settings brings certain challenges, but for the Cruise Research Society the challenges are viii

heightened by the relative immaturity of research in this field. The researchers bring their motivations to the table but frequently it can be claimed that what is missing is the need to ensure that research is legitimate and critical. This final chapter considers the notion of performativity in the context of the purpose of research for this industry and stimulates debate about the next steps that the Cruise Research Society could consider.

Cruise research for the future The plan for the future of the Cruise Research Society is to continue to grow and to develop an ever stronger voice. The annual cruise conference programme continues unabated and society members remain committed to being inclusive, to engage with industry and to develop research that matters. This is no drop in the ocean.

Prof. Dr. Philip Gibson Prof. Dr. Alexis Papathanassis Prof. Dr. Petra Milde

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Table of Contents Acknowledgements .................................................................................................. v Editors’ foreword: analogies and the cruise industry .................................................... vii Table of Contents .................................................................................................... xi

PART A: Market & Trends ..................................................................................1 1.0

Customer deception in the cruise industry ....................................................3 Miriam Crisco Schmenner

2.0

Seasonality: A factor of crisis or development in cruise tourism? ....................25 Tihomir Lukoviđ & Katja Božiđ

3.0

Evaluating cruise demand forecasting practices: A Delphi approach ................39 Hannah Kollwitz & Alexis Papathanassis

4.0

The Development and meaning of vessel flags in the cruise industry ...............57 Cordula Boy

PART B: Destinations & Sustainability.............................................................77 5.0

Consumer behaviour in the traditional cruise market and implications for the sustainability of ocean cruising ..................................................................79 Martin Cholwill

6.0

Assessing the environmental impact of anchoring cruise liners in Falmouth bay ......................................................................................93 Sarah Tuck, John Dinwoodie, Harriet Knowles & James Benhin

PART C: Processes & Practices .......................................................................107 7.0

Ensuring safe and sustainable cruise operations .........................................109 Paul Wright

8.0

Safety perceptions in the cruise sector: A Grounded Theory approach ...........127 Margret Cordesmeyer & Alexis Papathanassis xi

9.0

Cruise passengers’ complaints: an analysis of online reviews .......................147 Mandy Aggett

10.0

Influences of celebrity chefs on cruise fine dining experiences......................163 Patsy Morgan & Christopher Edwards

PART D: Human Resources ............................................................................177 11.0

Staffing the cruise industry in 2020: Exploring solutions ..............................179 Caroline Wiscombe, John McGirl, & Michael Piontek

12.0

Crew retention .....................................................................................199 Wolfgang Lukas

13.0

The Maritime Labour Convention 2006: An instrument to improve social responsibility in the cruise industry ..........................................................207 Petra C. Milde

PART E: Cruise Education & Research ...........................................................225 14.0

Critical cruise research in the age of performativity ....................................227 Michael P. Vogel

15.0

Plotting a course in cruise management education .....................................245 Ate de Groot

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PART A:

Market & Trends

1.0

Customer deception in the cruise industry Exploring the influence of crowding on the expectation – satisfaction relationship

Miriam Crisco Schmenner Bremerhaven University of Applied Sciences Bremerhaven, Germany

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_1, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

1.1 Introduction Imagine the following situation: You are on vacation, walking down the alley of an architecturally beautiful village that you always wanted to visit. But, there are 200 other tourists with you in that little beautiful alley. It is noisy and you are not able to fully enjoy the atmosphere that you were awaiting for so long. How do you feel? While working on a cruise ship I often times dealt with complaining or dissatisfied guests on excursions. Complaints of customers often arose from unmet expectations. Especially in small destinations, where many ships called at simultaneously resulting in a high amount of tourists, the number of complaints increased. Often times passengers expected to be the only ones in the specific destination as frequently suggested by cruise lines’ advertisements. The problematic situation that more than one ship calls at one port leading to crowded destinations or attractions caused by a high number of cruise passenger tends to increase due to two main reasons. The first reason is a strong trend of increasing cruise ship sizes. Klein (2002) states that in the 1970s the average accommodation onboard was 600-700 passengers. When looking at Ward´s (2009) list of ocean ships to debut 2010 (Figure 1a), most of the debuting ships can carry 2.000-4.200 Passengers. Furthermore, fleets are getting extended and new cruise lines are entering the market (e.g. TUI Cruises in 2009).

Figure 1a: Ocean ships to debut 2010 The second reason is the limited amount of destinations, which offer both port facilities required for the large ships and sufficient attractiveness for cruise passengers. Therefore, many ships have similar itineraries, calling at the same destinations. This paper will investigate the relationship between expectations of cruise passengers towards crowding derived from publicity material of cruise companies and guest satisfaction. This research topic is relevant since the cruise industry is a highly competitive environment 4

where customer satisfaction is crucial to success and therefore increasingly important to ensure high repeater numbers and to prevent negative word-of-mouth. The paper is composed of six sections. Following this introduction, a section on background information and a literature review will shed light on important topics such as satisfaction theory and crowding. Subsequently, the research methodology and data analysis procedures are described. In the further course of this paper findings are discussed in a concluding section with recommendations for the industry. Finally limitations of this work and input for further research are shown.

1.2 Background The expectation - experience gap (Figure 1b), which occurs if expectations are not met by experience, can be minimized in various ways.

Influencing Variables: Weather Traffic Personal Mood Overall Atmosphere Overall Organisation Crowding

Past Experiences

Needs

EXPECTATIONS

GAP

EXPERIENCE / PERCEPTION

(DIS)SATISFACTION

Communication (WOM, Marketing)

Before Holiday (Pre-consumption)

On Holiday (Consumption)

On Holiday / After Holiday ((Post-) Consumption)

Based on Brown, S.A. et al. (2008), Fallon P. & Schonfield, P. (2004), Govers, R. & Go, F.M. (2009), Kozak, M., Decrop, A. (2009), Moscardo, G. (2009), Oliver, R.L. (1980), Uysal, M. , Williams, J. (2004)

Figure 1b: Expectation - Experience gap Either the perspective of increasing the experience to expectations can be taken, or the perspective of lowering expectations to match with experiences can be favored (Figure 3). In the tourism industry usually the perspective of increasing experience is used to minimize this gap. However, improving experiences may prove challenging as a change of experiences in the destination involves many parties such as port authorities and incoming agencies, who follow contradicting objectives. Measures to align destinations towards the expectations of cruise passengers could include exclusive openings of attractions for cruise passengers, 5

visitor/port restrictions by the government and creating new destinations, which is illustrated in Figure 1c. Some of these measures are already being executed, but in many cases they are not sufficient to successfully handle large masses of cruise passengers. Destination 3 Destination 2 Country of Source Market

Destination 1

(company - passenger relationship)

(company - destination relationship)

Customers‘ Past Experiences

Word of Mouth

EXPECTATIONS

Cruise Company (Advertisement, Internet, Brochures)

Lowering Expectations

Port Authorities (Passenger restrictions, exclusive

GAP

… Government

EXPERIENCES

Sights / Attractions

Incoming Agencies

(Exclusive openings for cruise passengers)

(Stretching day schedules, excursion timings)

Increasing Experience

Based on Brown, S.A. et al. (2008), Fallon P. & Schonfield, P. (2004), Govers, R. & Go, F.M. (2009), Kozak, M., Decrop, A. (2009), Moscardo, G. (2009), Oliver, R.L. (1980), Uysal, M. , Williams, J. (2004)

Figure 1c: Possibilities ro decrease Expectation-Experience gap cause by crowding The reaction of the cruise industry to crowding is to call at private islands (Ward, 2009), build large ships where the ship is the destination itself (Röwekamp, 2009) or operate smaller as well as more differentiated ships, which can sail to small and remote destinations. Since all of these measures are either complicated or costly, the focus of this paper will be on lowering expectations to match with experiences. Therefore it will concentrate on the expectation creation via external communication such as internet, brochures and advertisements. Consequently, this paper is built upon the basic assumption that the expectations of the guest can be changed more easily than the destination characteristics. The idea of this work is to reverse the satisfaction approach the way it is predominantly used nowadays. The focus lies on guest expectations, which are formed by the cruise company´s communication with the guest (e.g. brochure), past experiences of cruise customers and tips and experiences of friends. Although experiences are manifold, this paper will focus on expectations and experiences concerning crowding, neglecting other possible factors that could influence satisfaction. More specifically, the primary goal of this paper is to analyze the relationship between crowding via descriptions of crowding in brochures, the experiences with crowding and the satisfaction level of cruise passengers resulting from crowding experiences. This will be done via an experiment with cruise passengers. 6

1.3 Literature review Due to the specificity of this topic, several disciplinary areas need to be explored in combination. The following secondary research looks at both the relevant academic and commercial literature, including research papers on satisfaction theory, holiday brochures and crowding. 1.3.1 Satisfaction theory Satisfaction theory tries to understand the relationship among ‘a priori expectations, a posteriori evaluations, and subsequent satisfaction’ (Brown et al., 2008, p.52). Fallon & Schofield (2004) define customer satisfaction as a ‘post-consumption evaluative judgment that represents the ‘outcome’ for the customer after exposure to the service product.’ (Fallon & Schofield, 2004, p.203), which hence is an intangible parameter. Due to the fact that ‘satisfactory travel experiences remain an important goal for both tourists and tourism organizations alike’ (Foster, 2009, p.133), the measurement of satisfaction awoke interest in the tourism business in recent years. In a review of literature on tourist satisfaction Pearce (2005) states that literature is replete with the challenges of measurement, elaboration and case studies, whereas most of the literature ignores the fact of satisfaction being an individual judgment. According to him, most satisfaction studies are used for creating competitive advantage and for quantitative measurement of performance targets. Consequently satisfaction measurement should take a more qualitative approach to unmask relationships rather than addressing numbers to it. Hence, a qualitative approach to analyzing (dis)satisfaction towards crowding will be used. There are various approaches to satisfaction theory, but for the purpose of this paper the Expectation Disconfirmation Paradigm (EDP model) by Richard L. Oliver (1977, cited in Oliver, 1980) is used as the fundamental approach (Figure 1d).

Expectations Disconfirmation

(Dis)Satisfaction

On-site Experiences / Perceived Performance Source: Based on Nevo, D. 2005, (Online) available at http://www.istheory.yorku.ca/ect.htm, last accessed on July 11, 2009

Figure 1d: Expectation Disconfirmation Paradigm (EDP Model) The EDP model assumes that customers compare their expectations with the actual product/experience. Depending on the outcome results can be satisfaction, neither 7

satisfaction nor dissatisfaction, or dissatisfaction (Oliver, 1980). This basic assumption is depicted in a linear three-dimensional relationship (Figure 1e). If experience exceeds expectations, there is a high likeliness of satisfaction, which is the optimal outcome for both company and customer.

Figure 1e: Response Surface Representation of the EDP Model Besides measuring disconfirmation, satisfaction theory entails a further step, which takes place after the tourist returns home. Tourists need to make sense of their holiday experiences, which happens through narration and translation of the on-site experience into different contexts (O´Reilly, 2005; Foster, 2009). ‘(Dis)satisfaction is therefore not simply ascribed; rather, (dis)satisfaction is actively achieved’ (Foster, 2009, p.136) through evaluative talk. This process also leads to the positivity bias of satisfaction theory (also called satisfaction trap) as Pearce (2005, p.166) explains as follows: ‘There is (…) an explanation for [a very positive result in satisfaction surveys]. It is likely that a substantial amount of ego or self-esteem protection is operating with customers not wanting to admit that in the free-choice tourism situation they have selected badly. Tourism products and experiences reflect people´s values and represent aspects of (and opportunities to enhance) their identity; it is therefore counterproductive and reflects poorly on personal credibility to be very dissatisfied with a situation that one has willingly entered and often paid handsomely to experience. ‘ Hence, people desire to be seen as discriminating and sophisticated individuals and envision themselves as experienced and competent decision makers. This is also a very important theory to incorporate when interpreting satisfaction results as answers might be more positive than satisfaction truly is. This phenomenon is referred to as positivity bias. Due to its simple structure the EDP model bears some weaknesses. Arnould and Price (1993, cited in Morgan & Watson, 2009, p. 118) question the approach by suggesting that people 8

usually have vague expectations of intense emotional outcomes. Furthermore, expectations are formed upon personal variables, such as individual human characteristics, disposition, nationality and previous travel experiences. This leads to the fact that satisfaction theory cannot be seen in social isolation since various cultures have different satisfaction preconditions (Fournier and Mick, 1999, cited in Morgan and Watson, 2009, p.118). Additionally, ‘word-of-mouth’ (Uysal, 2004, p.235) and marketing efforts of e.g. tour operators influence tourist expectations. Moreover, experience is a multi sensory event where situational variables (Moscardo, 2009), such as external circumstances (e.g. weather), travel companions, general interactions and the personal mood of the tourist are influencing parameters. Pizam et al. (1978) also argue against the completeness of the EDP model, saying that it is inoperative and ‘does not identify the separate components and dimensions of tourist satisfaction’ (Pizam et al., 1978, p.316). As already shown by the positivity bias, satisfaction is also an ongoing evaluation process and may develop as time passes. Although these weaknesses of the EDP model are obviously valid, the approach is a basic starting point to reveal potential relationships amongst some of the components, which this paper will make use of. However, while the mentioned weaknesses should be seen as potential limitations, the research design employed tries to limit these. In this paper, the EDP model will be extended and applied reversely. The focus is not primarily on the satisfaction parameter, but on the influencing expectation parameter. Nykiel (2007) explains that a higher level of expectations and therefore highly demanding tourists lead to an overall decline in tourist satisfaction, as it becomes tougher for the supply-side to live up to those expectations. Therefore publicity material and advertising will be analyzed in detail. 1.3.2 Publicity material From research on tourist brochures Edelheim (2007) concludes that the content of tourist brochures is normally sold in a positive and attractive way in order to create a selling proposition. Govers & Go (2009) identify that this influences the tourists buying behavior. Also Klein (2002) notes that the ‘image is what sells cruises’ (Klein, 2002, p.1). Promotional material typically depicts the ‘romantic holiday, that is a heterosexual couple on their own gazing at the sunset’ (Urry, 2002, p.139), which leads to further expectations on how specifically a place/destination/cruise ship can be consumed. Urry (2002 [1990]) created various categories on how tourists can gaze upon a place. The two most interesting gazes for this paper are the romantic gaze, where tourists expect solitude, to look at an object privately and to see ‘undisturbed (natural) beauty’ (Urry, 2002, p.43) and the collective gaze, where tourists expect conviviality and public places. Here, other people also viewing the site are necessary to give liveliness to the object or place. Although publicity material tells what customers want to hear, the cruise itself can differ from that picture in reality (Ward, 2009; Klein, 2002). The incongruity between the image and reality of cruises creates gaps, which seem to be occurring independently from cruise segments and type of cruise, and may lead to customer disappointments and complaints (Klein, 2002). As competition has become fiercer in recent years (Urry, 2002), the need of tourism companies to offer attractive products and to represent those products accordingly has intensified. After the predominantly promoted positive image of cruises, which creates high 9

expectations, was highlighted in this section, the next section focuses on crowding and its consequences on human behavior. 1.3.3 Crowding Research on crowding classically focuses on space limits and density conditions of human beings and its psychological and sociological consequences. Freedman (1972) discovered that humans may react with increased aggressiveness to crowding/density as they are limited in their usual behavior. Freedman found that there are various forms of reaction to density, but it is generally accepted that density intensifies typical responses to a situation. Other researchers (Stokols 1972; Kuykendall & Keating 1984; Kaitilla 1998; Worchel 1978) hold a rather psychological perspective and define crowding as an internal state, psychological experience or feeling of a perceived loss of personal control over an environment, which is not necessarily related to actual density, but may have a similar influence on people’s behavior. For this paper crowding in relation with limited space availability will be called ‘physical crowding’, whereas crowding in respect to a psychological experience will be called ‘psychological crowding’. If ‘crowding’ is used by itself, then a mixture of both definitions is applicable. Worchel (1978) found that subjects experience least crowding when they are in a state of arousal as for example in a concert or in a big city, where there are many things to gaze at. The biggest impact of crowding is experienced if people are in a relaxed condition. Translating this to a cruise context, visitors of larger cities often feel less crowded even with high physical crowding due to visual arousal than visitors of a nice beach or idyllic place, where moderate physical crowding is given. This is again related to differing expectations and differing expected gazes. Relating this to the previously examined romantic marketing strategy the assumption is not farfetched that tourists expecting a romantic gaze are more likely to experience crowding and hence are subject to aggressive feelings or other negative effects. Furthermore, Klein (2002) claims that often too many cruise passengers are in one place at one time and that the problem of physical crowding (also referred to as people pollution) as well as psychological crowding is much greater in smaller communities as fewer sights and attractions are available to spread the masses. Hence, crowding surely influences the passengers´ experience of a port and can influence the subjective quality of the tourist experience (Klein, 2002). Although cruise operators and destinations are mostly aware of the phenomenon of physical crowding, it has to be weighed against economic benefits, demand patterns, port availability, ship size and other factors, which all influence the itinerary decisions of cruise companies. Looking at the whole picture of satisfaction, expectations, advertisements and crowding this creates a vicious circle. Consequently the question arises why cruises and destinations are still marketed in such positive and stunning ways?

1.4 Research methodology and data procedures There are several underlying assumptions that this paper builds upon. Firstly, the assumption is made that the degree of crowding is an important factor for creating satisfaction. Secondly, the assumption is made that cruise operators have more influence on 10

customer expectations through their communication than on the actual experiences within the destination, which legitimates the focus on the expectation -experience gap. Thirdly, it is assumed that most cruises in the German source market are still bought via brochures of the cruise operators, as the purchase process is decision and information intensive. Therefore the suggested image of destinations within brochures plays an important role in the expectation generation phase of the cruise passengers. The fourth assumption is that many ships have similar itineraries and that there are attractive must have seen ports which are popular within certain cruise areas and hence, due to competitive pressure, frequently visited. Consequently, the more ships in operation, the higher the possibility that more than one ship calls at each port. This results in a higher probability of overcrowding destinations with an increasing amount of passengers. These assumptions are understood to be valid and therefore not content of the analysis. The goal of the primary research was to analyze the potential causal relationship between catalogue or internet descriptions focusing on crowding and expectation formation of cruise passengers as seen in Figure 1f. Independent Variable: Crowding Elements in Brochures

Existence of Causal Relationship?

“Manipulation” by implementation of Crowding Elements into Cruise Operators’ Brochures

Dependent Variable: Decrease in Expectations Resulting in an Adequate Satisfaction Level

Observation of Changes in Expectations and Satisfaction

Figure 1f: Possible causal relationship between independent and dependent variable Therefore the operational hypothesis is as follows: The customer expectation-satisfaction gap can be decreased by realistic holiday descriptions, including indications towards crowding. Passengers reading the modified description are expected to have lower expectations and hence are more likely to be satisfied with their holiday. In order to achieve the research goal the research method of an explorative experiment was chosen, as an interpretive (qualitative) consumer research paradigm provides the key advantage of uncovering realities that could not be predicted a priori (Blichfeldt & Kessler 2009). The fundamental idea of a qualitative experiment is to draw conclusions about the structure of a matter by controlled and adequate manipulations on the analyzed matter in preferably natural circumstances. Hence, the research design of an experiment was chosen to prove a causal relationship between one independent variable (catalogue content) and one dependent variable (expectation leading to satisfaction) as depicted in Figure 6. Through 11

manipulation of the independent variable (catalogue) and the division of participants into a test- and a reference-group, the effect and impact can be measured or observed looking at the dependent variable (expectation/satisfaction). To test the impact of alternative catalogue content on the expectation formation of cruise customers, a cruise brochure was modified by adding sentences about crowding. The reference group was provided with the non-manipulated -romantic- content of a destination. The test group was provided with the manipulated content of the same destination, where sentences about crowding and images with many people were provided instead of the beautified pictures and descriptions usually used by cruise operators (Figure 1g). Term

Detail

Independent Variable

Crowding description and crowded images

Dependent Variable

Level of expectation and satisfaction

Test Group

Manipulated content (including descriptions and pictures of crowding)

Reference Group

Non-manipulated content (commonly used romantic descriptions and beautiful pictures)

Figure 1g:

added

Overview About Used Terms

The segmentation of the experiment participants into test or reference group happened systematically. Additionally, the experiment participants were restricted to people who cruised before, or people who were about to take their first cruise, and the German population to gain relevant answers and to reduce the scope. The experiment has been designed as a simulation of a whole vacation in accordance to the consumption process, which Crouch (2004) and Duman & Kozak (2009) define as prepurchase, purchase and post purchase. In a tourism context the pre-purchase contains the information search and expectation formation, the purchase can be viewed as the trip itself, and the post purchase is the post evaluation after returning from the holiday. This design helped to prevent a conjoint conduction of expectations, experience and satisfaction, which is necessary to secure initial thoughts and to work out the details of expectations. Since expectations are best measured prior to the experience (Pearce, 2005), this was incorporated into the research design by splitting the experiment into three main parts (Figure 1h).

12

INTRO General Questions

PART 1 Description of the Destination

PART 1

PART 2

PART 2

PART 3

Interview Questions

Statistical Questionnaire

Travelogue Interview Questions

+ Observation

Figure 1h: Experiment Layout Following a general introduction, part one consisted of a destination description including pictures, which simulated the decision and expectation formation process. Part two contained the travelogue, including a description and pictures of a day in the respective destination, and simulated how the experiment participant would have experienced the vacation day. In order to create the link between customer experience and satisfaction an additional set of evaluative questions (travel talk) was included after the first experiences were observed. Hence, this second part simulated not only the experiences, but also the satisfaction formation process of the experiment participant, as first expectations, created and written down in part one, were compared to experience. Both participant groups were provided with the same experience scenario in order to create a comparable situation. Part three consisted of a questionnaire to generate demographic and psychographic data, with the purpose of detecting potential correlations. As exemplary destination the Greek island of Santorini was chosen, since it is a popular cruise destination and the problem of crowding is well known and obvious due to the small size of just 13.000 inhabitants and its popularity among cruisers. Many people think about Santorini as having beautiful little white and blue houses. They think about the view from the crater onto the ample sea, which is being advertised and reflects the romantic gaze. As already elaborated, the romantic gaze is most vulnerable to crowding effects, but most appealing as a marketing tool at the same time. Considering this, the non-manipulated destination description for the reference group was produced in the style of a regular brochure/internet description with beautiful pictures from Santorini. The experiment was executed employing the method of open face-to-face interviews as Pearce (2005) detected it to be common for collecting satisfaction data. To enrich the findings resulting from the open ended questions, observation was used as an additional research method as shown in Figure 1i. To reduce the probability of misunderstanding, questions were created with simple, specific and short wording and a pilot experiment was carried out. Findings from the pilot were incorporated into the interview design used in the actual experiment.

13

Part 1

2

3

Action

Task of Interviewer

Handing out the destination description and Observing pictures to the experiment participant Interview part 1 Interviewing Handing out travelogue and pictures to the Observing experiment participant Interview part 2 Interviewing Questionnaire Observing and paying attention to the participants while they are completing the questionnaire

Figure 1i:

Overview of the Experiment Execution

Source: Author

The experiment was conducted the following way: Firstly, destination descriptions were read by the experiment participant, before the decision to purchase had to be made. Afterwards experiment participants were given a scenario (travelogue) about how they would have experienced their holiday in order to find out the participants´ satisfaction level about their simulated vacation. The experiment was executed in the Columbus Cruise Centre in Bremerhaven as well as in the harbour area of Kiel in the first week of June 2009. Caused by the restriction of time, areas and the available budget the sample is a non-probability sample, which means that the sample was not randomly selected (Nykiel, 2007). Since this research paper is based on an interpretive experiment approach the weakness of non-probability sampling and the small sample size of 24 participants can be neglected. EXAMPLE Question 1 Question 2 …

Figure 1k:

Participant 1

Participant 2

…

Answer Participant 1 Answer Participant 2 … Question 1 Question 1 Answer Participant 1 Answer Participant 2 … Question 2 Question 2 ... … …

Example Excel Spreadsheet for the Experiment Analysis

Due to the highly individualized design of the experiment interview notes were digitalized into an Excel spreadsheet (Figure 1k and specific data interpretation techniques were established. Firstly, data was sorted according to reference group and test group. Then various analyzing approaches were undertaken. One approach was a combination analysis, where each part of the individual participant experiment was analyzed according to a specifically designed decision tree (Figure 1l) which visualizes answer patterns. Both test and reference group were visualized in their own decision tree. The decision tree was designed 14

according to the three parts expectation/image, experience/reaction and satisfaction. After participants were sorted according to the decision tree, the satisfaction level, word-ofmouth attitude and their experience were written down accordingly. As the test group is faced with the additional hassle of dealing with a manipulated description, some additional information had to be included in the details of each participant.

Image

Reaction

Satisfaction po ne

positiv neutral negativ

ne

Experiment

Reference code of participant (statement, word of mouth attitude, experience with crowding) ...

positiv

...

positiv Participan t-Group

neutral

neutral negativ

negative

positiv neutral negativ

Figure 1l: Decision tree template After sorting the answers, findings within and between test and reference group were compared. Furthermore a classification of participants into various segments, such as repeaters or not attracted participants, was made to uncover more similar or differing patterns in tourists` behaviours.

15

Participant 1 Question about Image Question about Reaction Question about Satisfaction … Figure 1m:

Participant 2

Participant 3

…

Topic Analysis

Combination Analysis

Data Analysis Approaches

A second analysis according to topics (questions) was undertaken. As the combination analysis detects the vertical relationships among the answers, the topic analysis detects the horizontal patterns (Figure 1m) within and between test and reference group. Wordings and phrases used by the participants were split into various categories. An example of categories about the participants’ expectations towards Santorini would be expectations towards nature, expectations towards local culture (architecture, townscape), (historical) culture, overall picture of Santorini and not fitting into other categories. Via a specific word analysis predominantly used words and word groupings were identified, which not only detected details referring to the expected gazes, but also formed a predominant image from the various answers. Consequently, the different analyzing approaches were used separately as well as conjointly to produce the findings described in the following section.

1.5 Discussion of findings General characteristics of the test group and the reference group are shown in Figure 1n. The most obvious finding of the experiment is the differing image of Santorini between participants of the test group and the reference group after the different brochures were distributed. Twelve out of 13 participants in the reference group had a rather positive image of Santorini, whereas the images of Santorini from the test group were more diverse as four either had a neutral or negative image. Consequently, fewer people from the test group were willing to purchase the cruise. Hence, we can suppose that the manipulated brochure influenced the image formation of Santorini and the willingness to buy.

Number of Participants Gender Distribution

Test Group

Reference Group

11

13

5 Female / 6 Male

8 Female / 5 Male

Average Age

60

49

Number of Repeaters

6

7

16

Who They Take a Cruise With Most Decisive Factor

Partner

Partner

Itinerary, Travel Time

Ship, Itinerary

Prior Visit to Santorini Preferred Vacation Form

0

2

Sun & Beach, City Trips

City Trips, Cultural Vacation

Figure 1n: Details of Participant Groups The central objective of this study was to analyze the effects of realistic cruise brochures on passengers´ expectations with the subordinate aim of testing the impact of the crowding phenomenon on overall customer satisfaction by applying realistic cruise brochures. These two focuses will be analyzed in detail in the following two sections. 1.5.1 Effects of brochure manipulations on tourists´ expectations The analysis of the experiment reveals many fascinating trends. The first striking tendency is that the participants of the test group can be split into two sub-groups: either the manipulation has been recognized by the participants or it has not. For further discussion only those participants of the test group who recognized the manipulations will be called the real test group as the others more likely have the same preconditions as the reference group since they did not recognize any differences to regular brochures. In fact, it is fascinating to note the similarity of test group participants’ answers of those who did not notice the manipulations, to those in the reference group who did not receive the manipulations. The created destination image is predominantly positive. Keeping this in mind, it is interesting to note that the real test group participants tend to have a more negative or neutral image of Santorini. Further indications for this trend are derived from the topical and the word analysis. The first reactions to the description of the reference group are all positive (taking out the answers from repeaters) and pictured with words such as ‘ideal vacation destination’, ‘worthwhile visiting’, ‘gorgeous’, ‘desire to go there’ and ‘I definitely get itchy feet, I want to go there’. In addition, the expectations of the reference group concerning Santorini as a destination are all positive, too (neglecting the answers of repeaters). Expectations are mainly about nature and local culture and are worded the following: ‘picturesque’, ‘breath-taking perspective’, ‘pristine nature’, ‘idyllic’, ‘romantic’, ‘not many tourists’, ‘cute white and blue houses’ and ‘beautiful winding alleys’. These expressions also fit to the ‘romantic gaze’ (Urry, 2002) participants would expect including privacy and exclusivity. In contrast, the first reactions to the manipulated descriptions of the real test group also included negative aspects next to positive ones. Words such as ‘nice winding alleys’ as well as ‘impressive panorama’ are contrasted by expressions such as ‘I don’t want to visit during high season’ and ‘I am scared of the masses’. More specifically, when looking at the expectations towards Santorini as a destination derived after reading the manipulated description, the real test group comments more on the overall picture of Santorini by saying ‘I expect Santorini to be dreamy but crowded’ and ‘crowded with tourists, but a worthwhile destination’ than only on the nature and local culture. Usually a positive trait is mentioned in 17

the same breath with crowding/density or masses of tourists. This way of describing Santorini leads to the assumption that the romantic gaze is still predominant, but that also the masses play a role in the expectations of the real test group. Looking at these findings it can be concluded that the manipulated brochure does have an effect on the created destination image and thus on the participants expectations. Participants of the real test group expect many tourists to be in Santorini beside themselves, whereas participants of the reference group did not expect crowds of tourists to be present. This finding additionally supports the theory that publicity material influences tourist expectations as mentioned by Jenkins (2003, cited in Moscardo, 2009) and Govers and Go (2009). Accepting this conclusion as valid, it is then interesting to take a closer look at the implications that different expectations towards Santorini as a destination may have on the willingness to buy. The combination analysis shows that from the reference group only repeaters would not book this vacation. Both repeaters argued that there are nicer places to visit and one even mentioned the masses of tourists. However, it can only be assumed that they would not visit Santorini again because of their negative experiences with crowding. In contrast to this, four out of eleven participants of the test group would not have booked the vacation. To specify it even further, three out of the seven real test group participants refused to book this holiday mainly due to crowding. In summary, it can be concluded that the manipulations of the brochure had effects not only on the participants’ expectations, but also on their willingness to buy. 1.5.2 Impact of crowding (descriptions) on satisfaction This section will highlight the second part of the hypothesis, where the derived expectations are first compared to the experiences and then jointly compared to the claimed satisfaction level of the experiment participants. The real test group expects Santorini to be crowded. However, they still tend to desire gazing exclusively at nature and cultural sights, as derived from the topical analysis. Consequently, it can be concluded that an individual exploration of the island is favored over an organized excursion as participants hope to escape the masses this way. However, the findings suggest that there is no one single reaction to crowding among the participants. The analysis showed that there are five predominant stereotypes of tourists´ reaction to crowding and crowding descriptions: The blocking tourist – I hate mass tourism

This reaction only applies to tourists who are faced with real crowding facts. Blocking tourists are already scared about the masses of tourists when examining the brochure, which results in a choice not to book this holiday/cruise as the destination is classified as unattractive. Blocking tourists are either falsely convinced that small ships will never face crowding, or have had negative experiences with crowding before. The shocked tourist – Help! 18

These tourists usually do not have much experience with crowding. Shocked tourists are often individual cruisers, go on holiday in low season, cruise on small ships, or are first time cruisers. Shocked tourists tend to be dissatisfied when faced with crowding. The convinced tourist - I know what I have to expect This type of tourist can only emerge if realistic information (about crowding) is available. The convinced tourist is educated about possible crowds by realistic descriptions or other sources, but still convinced to go due to the perceived attractiveness of the destination. But still, he would rather explore the island by himself to escape the crowds. In case the convinced tourist still faces crowding, he would presumably react with dissatisfaction. The experienced tourist – Crowding can happen anywhere if you go on holiday The experienced tourist has experienced crowding before and knows that there are usually other tourists as well, especially when sailing on a big ship. This type of tourist either expects and accepts crowding or knows exactly where to go (destination, ship) in order to avoid crowding. He is assumed to have similar characteristics as the ‘post-tourist’ (Urry, 2002, p.91). The post-tourist knows about other tourists, is prepared to queue from time to time and is prepared for hassles during vacation, since he knows that glossy brochures are ‘a piece of pop culture’ (Urry, 2002, p.91). The happy tourist – I don’t care about anything, I´m on holiday! Although crowding might be present or has been mentioned in publicity material, these tourists state as their immediate reaction that the positive aspects outweigh negative ones and that they are satisfied with their holiday. There are two possible explanations for this behavior. Either these tourists pretend to be ignorant against hassles, or they truly possess such a positive basic attitude. Since no direct indications were found for either possible explanation, the actual source of this behavior is still open to research. In order to verify this stereotyping attempt, further research needs to be undertaken as the analyzed sample size was very limited. Also people might qualify as a mix of these stereotypes. Besides these findings on the five tourist reaction types to crowding, it is important to note the influence of the positivity bias, which seems to take place within almost all participants at least to some extent. None of the participants claimed to be very dissatisfied, although the word analysis showed that some were ‘shocked’, ‘angry’, ‘bothered’, ‘frightened of masses’, ‘disillusioned’, ‘disappointed’ or that they felt ‘awful’. Hence, I strongly assume that the positivity bias is present and satisfaction findings should be treated cautiously. The question arises if the real test group participants, who claimed to be satisfied, are more truly satisfied than those of the reference group, or if the positivity bias and therefore a glorification process occurred within the real test group. According to the EDP model, lower expectations of the real test group should lead to a higher level of satisfaction. However, contrary to the initial assumption that the real test group participants are more truly satisfied, no indications for this assumption were found. The word analysis within the real 19

test group shows that participants were not always strongly convinced by their satisfaction. Phrases like ‘It is hard to say whether I am satisfied or not. I would not have wanted to miss Santorini. I would be satisfied that I went there although there was crowding’, or ‘I did the possibly best I could out of the given situation’ state this clearly. As a result, it cannot be supported that lower expectations result in higher satisfaction, given the same experience. Hence it can be assumed that ”tourists perceive the destination as an extraordinary holistic experience” (Morgan & Watson, 2009, p.120) and that it is difficult to test influencing aspects of satisfaction, such as crowding, in isolation.

1.6 Conclusions This study focused on crowding in the cruise context, an increasingly important challenge for cruise operators as the continuous increase in ships sizes, an increasing number of ships and the finite availability of attractive and suitable cruise destinations will lead to a higher probability of cruise ports to face density/crowding of cruise customers. The purpose of this study was to examine the expectation-satisfaction gap concerning crowding in cruise destinations and to test the hypothesis that the customer expectationexperience gap can be decreased, and hence satisfaction increased, by realistic holiday descriptions. The analysis of the conducted experiment shows that the first part of the hypothesis, namely that modified brochure content affects customers expectations, holds true for the German source market as customers reactions to manipulated brochures differed from their reactions to non-manipulated ones. However, no indications were found supporting the second part of the hypothesis, namely the direct impact of crowding on satisfaction. This could possibly be ascribed to the impact of positivity bias. Rather, the analysis of the experiment indicated that there are five different types of tourist reactions to crowding in the German source market. These are the blocking tourist, the shocked tourist, the convinced tourist, the experienced tourist and the happy tourist. If cruise companies took these five tourist types into account when calling at potentially crowded destinations, excursion staff, cruise staff and guides could be briefed accordingly on how to handle those different tourist types. Another implication could be in the domain of personalized marketing. If reaction types were known prior to the booking individually designed offers could prevent a mismatch between personal preferences of a passenger and the type of cruise offered. Coming back to the crowding–satisfaction relationship this study does not show whether the stated satisfaction of the test group is true satisfaction, or whether the positivity bias dominates the level of satisfaction of the test group as well. It can only be hypothesized that participants of the test group who received realistic brochure content including crowding warnings were more truly satisfied than participants from the reference group. This should be the content of potential further research. If true satisfaction was reached, a very positive word-of-mouth would probably be the consequence. As word-of-mouth is a very powerful 20

tool and crucial to economic success in today's competitive cruise industry, the credibility and reputation of cruise companies that use realistic descriptions could improve. This again could lead to increased bookings and thus to sales increases. Combining the findings with respect to the two components of the hypothesis in a practical way, this study provides implications for management as well as marketing. Since it can be assumed that brochure content influences customers’ expectations considerably, but does not seem to have a strong influence on overall satisfaction, there are two possible recommendations: Change company communication and publicity material (e.g. brochures) to a realistic approach. Cruise companies should try to position themselves as an honest operator in their respective target-market and thus create positive word-of-mouth as true satisfaction levels are potentially higher than in the case of regular descriptions. Note, however, that this is a hypothesis and hence to be verified. Keep marketing content as it is or even enhance it by making it more promising and attractive than it truly is. Crowding should not be taken into consideration as it does not have considerable impact on satisfaction in general. By raising the expectations with corresponding beautiful content, competitiveness is going up and potentially prices could be set higher accordingly, as customers have higher expectations and are thus possibly willing to pay more. This approach disregards the actual on-site experience, but as this does not seem to have a great influence on satisfaction over time it can be neglected. In evaluating these two absolutely divergent courses of action, two main factors need to be considered: 1) the opportunity created for the specific tour operator by pursuing the realistic approach and 2) the impact on the industry. Firstly, the opportunities to the specific operator resulting from a change to a more realistic approach in marketing are very clear. Positioning as an honest operator offers the opportunity to increase reputation through true satisfaction levels of customers, resulting in positive word-of-mouth and possibly high numbers of repeaters. Any increase in customer satisfaction will increase the probability for repeat purchases and thus leads to a potential increase in future sales. This holds especially true since the probability for long-term relationships between customers and operators critically depends on trust. Hence, such move can be seen as a customer retention mechanism. In fact proactive connotation of publicity material with respect to potential crowding is a defensive play by the cruise company in order to protect itself from a reputation of making unrealistic promises. Secondly, a potential change to a more realistic marketing approach may prove to have a significant impact on the entire market. The realistic approach offers a great potential for changing the tourism market to a more transparent one in terms of service offerings and thus a more customer-oriented industry standard. From my experience, tourists prefer to be treated with honesty and to know that they will not be disappointed. With current industry practices, however, unless a destination/hotel has been visited or a cruise has been made, one cannot be sure what expectations should be like as publicity material cannot be fully trusted. This is in fact a primary driver for the increased popularity of ‘online communities’ (Aschenbeck, 2008, p.19) and the ‘social web’ (Stirm, 2008, p.31), since customers try to get 21

a realistic picture through this virtual word-of-mouth about their holiday beforehand. Moreover, the internet offers more and more audiovisual holiday content which also faces increasing popularity. Although Parinello (1993) argues that more information equals the impossibility of dreaming, an argument against this would be based on the fact that the customer still determines the degree to which he actively seeks information and thus his ability to dream. If he seeks to get the whole picture of a place, he is likely to succeed with the large amount of available information. For a vacation sold for one price with same characteristics, I would prefer to have moderate experiences according to my expectations, rather than having high expectations that cannot be met. Although people should already be disillusioned about the perfect dream vacation, especially with the dominant mass tourism to attractive destinations today, I think a lot of hassle and frustration during holiday could be prevented or limited by realistic publicity material. To substantially support this opinion I recommend a professional field test to see how potential customers react and whether potential booking hesitation could be overcome by detailed explanations. This could possibly change the whole structure of the industry. In summary, these two aspects are highly convincing to decide for the realistic approach, as opportunities for the companies as well as positive impacts on the whole industry are achievable. Especially cruise operators of small ships should incorporate this approach as their passengers usually chose the ship for its size and to avoid masses. The most important recommendation to cruise companies resulting from this study is to be aware of the extreme influence of holiday descriptions and corresponding pictures on the customers. If this fact is kept in mind, marketing should not solely try to attract customers but also accept publicity material as a source of information for the customer. Hence, effective marketing decisions can be made if this causal relationship of publicity material and expectations is known in cruise companies. 1.6.1 Limitations and further research This study is not immune from limitations putting restrictions to the usage of its findings. Not only the hypothesis, but unintentionally also some underlying assumptions were tested in the course of the experiment, some of which turned out not to hold true and therefore should be given a second thought in future research. The most important limitation is the bounded possibility of generalization caused by the very limited sample size as well as the research method being qualitative. Therefore, the existence of the five tourist reaction types to crowding and the given recommendations need further research in order to be verified. Additionally the research design shows weaknesses as only one sample port is examined, whereas a different choice might have lead to varying findings. Furthermore, a simulated satisfaction level as used in this study does not necessarily have a link to a real satisfaction level. Due to the fact that this experiment was a qualitative research method, further qualitative and quantitative research should be conducted on this topic in order to verify or reject findings or interpretations. During the period of work further questions arose which may found the basis for future research in this area. One important question concerns the types of destinations where crowding problems are predominant and in which part of the destination lifecycle, which predominant tourist gaze and at which population size this problem occurs. Furthermore this leads to the question if displeasure or dissatisfaction 22

within the destination falls back to the reputation of the destination itself or if the customer primarily blames the tour operator for his (dis)satisfaction. With respect to future research it is suggested that other possible factors influencing expectations or satisfaction are to be tested in order to see if findings only apply to crowding or if they are valid on a generic level. Last but not least, it seems appropriate to direct the attention to the potential relationship of the five tourist reaction types towards other tourist behavior models as developed by Plog (Plog, S. C. (1991), Leisure Travel: Making It a Growth Market...Again!. USA: Verlag Wiley), which includes allocentric and psychocentric tourist types with differing needs and behaviours.

1.7 References x x

x x

x

x x

x

x x x x x x x

Aschenbeck, A. (2008). ‘Das große Geplapper’. FVW, Vol.18, 18-23. Blichfeldt, B. S., Kessler, I. (2009). ‘Interpretive Consumer Research – Uncovering the „Whys“ Underlying Tourist Behavior’, in M. Kozak, A. Decrop (ed.) Handbook of Tourist Behavior - Theory & Practice. New York: Routledge. Brown, S. A. et al. (2008). ‘Expectation confirmation: An examination of three competing models’. Organizational Behavior and Human Decision Processes. Vol. 105, 52-66. Crouch, G.I. et al. (2004). ‘Building Foundations of Understanding the Consumer Psychology of Tourism, Hospitality and Leisure’, in G. I. Crouch et al. (ed.) Consumer Psychology of Tourism, Hospitality and Leisure. Oxfordshire: CABI Publishing. Duman, T., Kozak, M. (2009). ‘Service Failure, Tourist Complaints, and Service Recovery’, in M. Kozak and A. Decrop (ed.) Handbook of Tourist Behavior - Theory & Practice’. New York: Routledge Edelheim, J. R. (2007). ‘Hidden messages: A polysemic reading of tourist brochures’. Journal of Vacation Marketing, Vol. 13 (1), 5-17. Fallon, P. , Schofield, P. (2004). ‘First-time and Repeat Visitors to Orlando, Florida: a Comparative Analysis of Destination Satisfaction’, in G. I. Crouch et al. (ed.) Consumer Psychology of Tourism, Hospitality and Leisure. Oxfordshire: CABI Publishing. Foster, C. I. (2009). ‘Processes and Performances of Tourist (Dis)Satisfaction’, in M. Kozak and A. Decrop (ed.) Handbook of Tourist Behavior - Theory & Practice. New York: Routledge. Freedman, J.L. et al. (1972). ‘Crowding and Human Aggressiveness’. Journal of Experimental Social Psychology, Vol. 8, 528-548. Govers, R., Go, F. M. (2009). ‘Tourism Destination Image Formation’, in M. Kozak and A. Decrop (ed.) Handbook of Tourist Behavior - Theory & Practice. New York: Routledge Kaitilla, S. (1998). ‘Privacy and Crowding Concepts in Melanesia: The Case of Papua New Guinea’. Habitat Intl., Vol. 22 (3), 281-298. Klein, R. A. (2002). Cruise Ship Blues – The Underside of the Cruise Industry. Gabriola Island: New Society Publishers. Kozak, M., Decrop, A. (2009). Handbook of Tourist Behavior - Theory & Practice. New York: Routledge. Kuykendall, D., Keating, P. (1984). ‘Crowding and Reactions to Uncontrollable Events’. Population and Environment, Vol. 7(4), 246-259. Morgan, M., Watson, P. (2009). ‘Unlocking the Shared Experience’, in M. Kozak and A. Decrop (ed.) Handbook of Tourist Behavior - Theory & Practice. New York: Routledge. 23

x

x x

x x x x

x x x x

x x

24

Moscardo, G. (2009). ‘Understanding Tourist Experience through Mindfulness Theory’, in M. Kozak and A. Decrop (ed.) Handbook of Tourist Behavior - Theory & Practice. New York: Routledge. Nykiel, R. A. (2007). Handbook of marketing research methodologies for hospitality and tourism. Binghamton: The Haworth Press. O´Reilly, C.C. (2005). ‘Tourist or Traveler? Narrating Backpacker Identity’, in Jaworski & Pitchard (ed.) Discourse, communication and tourism. Clevedon: Channel View Publications. Oliver, R. L. (1980). ‘A Cognitive Model of the Antecedents and Consequences of Pearce, P.L. (2005). Tourist Behavior – Themes and Conceptual Schemes. Clevedon: Channel View Publications . Pizam, A. et al. (1978). ‘Dimensions of tourist satisfaction area’. Annals of Tourism Research, Vol. 5, 314-22. Röwekamp, C. (2009). Lifestyle-Areal statt Landgang. [Online]. Presented at Spiegel Online: Reise. Available at: www.spiegel.de/reise/aktuell/0,1518,611484,00.html . Last accessed 6th March 2009. Stirm, P. (2008). ‘Die große Online-Show’. FVW, Vol.12, 30-33. Stokols, D. (1972). ‘On the distinction between density and crowding: some implications for future research’. Psychological Review, Vol. 79, 275-277. Urry, J. (2002). The Tourist Gaze (2nd edn). London: SAGE Publications [First published in 1990]. Uysal, M., Williams, J. (2004). ‘The Role of Expressive and Instrumental Factors in Measuring Visitor Satisfaction’, in G. I. Crouch et al. (ed.) Consumer Psychology of Tourism, Hospitality and Leisure. Oxfordshire: CABI Publishing. Ward, D. (2009). Complete Guide to Cruising & Cruise Ships 2009. London: Berlitz Publishing. Worchel, S. (1978). ‘Reducing Crowding Without Increasing Space: Some Applications of an Attributional Theory of Crowding’. Journal of Population, Vol. 1(3), 216-230.

2.0

Seasonality: A factor of crisis or development in cruise tourism?

Tihomir Lukoviđ University of Dubrovnik Dubrovnik, Croatia Katja Božiđ Split, Croatia

Abstract: As one of the three basic types of nautical tourism, cruise industry has been developing constantly in the course of the last 30 years. Professor Ross K. Dowling analyzed that development of cruise tourism on the world market. The analysis indicates that there are four main world markets of cruise tourism. The analysis of market of (1) North and Central America, (2) Europe (The Mediterranean Basin and Transatlantic), (3) The rest of the world, and of (4) Unexplored potential market, indicates the essential differences in the levels of development of cruise tourism. If we focus our analysis on the two most developed markets of cruise tourism, North and Central America and Europe, we can see the important differences that can be analyzed from the aspect of seasonality in the industry of cruise ships. If we put the seasonality of cruise tourism in the focus of this paper, the subject of our research will be to determine its presence intensity, and will point out our goal to define the reasons why it occurs in cruise tourism. The purpose of this research is to determine the consequences of seasonality on the strategic development of cruise tourism market, and consequently on cruise industry. The seasonality of cruise tourism is not self-explanatory, therefore its influence on the strategic development should be explained, and all features of active cruise market, as classified by Professor Ross K. Dowling, have to be taken into consideration. Within the framework of global crisis and of this year’s results in nautical and cruise tourism, there is neither stagnation, nor decrease in development, which indicates the constant development of cruise tourism. But there is also a question whether the seasonality in cruise tourism would determine the strategic development of this phenomenon, and in such a case the question is how and to what extent. In the conditions of global crisis, seasonality can be a part of general crisis, but on the other hand it can also be a new chance for development. The introductory hypothesis focuses on the seasonality as a new challenge in development, and by a thorough analysis, we will either accept or reject that hypothesis.

25

P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_2, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

2.1 Introduction Scientifically speaking, cruise tourism is an integral part of nautical tourism, and they are often analysed together. Various scientific studies indicate this mutual connection and dependence. These studies are focused on the consumer's / tourist's primary motives, such as enjoying the sea, the ships and the coastal destinations. The cruise industry, as highly developed and very complex, spread out in several directions, such as large global cruises, small cruise ships of local and regional importance, and finally specialized ports and destinations adapted to cruisers of all sizes. Two variables will be the subject of this research. They are: x x

Large cruise ships as a valuable and highly organized corporative segment of world cruising, Seasonality of this business

The purpose of this study is to investigate the seasonality, as well as its impact on development and management of large world cruisers. Seasonality is different for each of 300 cruisers operating on the global market of large cruise ships. Therefore, the main objective of this research is to determine how seasonality influences the operating of cruisers, what is the standpoint of cruise ships towards seasonality, what are its advantages and disadvantages, should it be countered or not, and in what way. If we set sustainable development as a fundamental business guideline, then the basic hypothesis of this research must consider seasonality as a factor, which should be managed by taking into account the interests of all parties, and also the viability of destination-cruiser relation. Thus, the main hypothesis is that seasonality is not entirely negative, and this research will provide a detailed analysis, particularly from a management perspective. This research is based on Dowling’s (2006) research, as well as on the authors’ statistical analysis and research, published in a specialised magazine of the University of Dubrovnik, “Naše More” 55(5-6)/2008.

2.2 Seasonality in the industry of nautical tourism Seasonality of business is a limiting factor for every manager. Seasonality is known as an undesirable element originating from a business environment that limits the realisation of the business objectives of a company. For this purpose, many strategies, dominated by adverse seasonal impacts, have been developed. But still, like everything in life, even seasonality is not absolutely negative. In the case of diversified sectors, such as nautical and cruise tourism, seasonality increasingly shows its positive aspects. The imperative of sustainable development increasingly supports the existence of seasonality. However, it is undeniable that the development of a particular industry is extremely difficult and complex when seasonality is an integral part of a particular business. There is an open question that 26

we will try to answer. The question is how and in what way does seasonality occur in the global nautical and cruise tourist market, and what are its key aspects. 2.2.1

Seasonality, comparative analysis

Building on the seasonality research, conducted by Dowling (2006)1, tourism and nautical tourism of a small, but yet significant Mediterranean country, such as Croatia, we will get a clear overview of the intensity of seasonality impact. In this part of our study we will define the quarterly movements in global cruise industry. We will also define Croatian tourism and its nautical segment from the aspect of sailing licenses issued and extended in Croatia, which is the basis for the operations of ports of nautical tourism and of charters in 2004. We will base our statistical analysis on the comparative analysis of seasonality coefficient defined as the ratio of the original phenomenon value and the trend of values (Y/Yc). The starting hypothesis is based on the assumption that seasonality in cruise industry is significantly lower than in tourism and in its nautical segment, i.e. in ports and charters. Available data show that the research was carried out in 2004 (Table 2a.)

1. quarter 2. quarter 3. quarter 4. quarter Total

CROATIA 2004 GLOBAL CRUISING MARKET 2004 North and Europe Rest of the Unexplored Tourism in Nautical Central (Mediterranean world potential CRO tourism in America and Transatlantic markets (Tourist CRO cruises taken arrivals in (Permit together) %) issued in %) 4.26 1.64 25.87 5.62 36.83 48.56 25.40 30.03 23.68 32.94 18.76 16.02 63.08 68.04 23.72 41.77 14.29 4.81 7.27 1.08 26.73 19.66 30.12 30.61 100.00 100.00 100.00 100.00 100.00 100.00 Source: author's calculation, Lukoviđ, T.

Table 2a: Structure of basic global cruising markets, of Croatian tourism and its nautical aspect (according to the issued permits for navigation) in 2004, per quarters. Table 2a shows that the quarterly scheme of passenger traffic in nautical tourism and cruising in Croatian and global markets, is suitable for the analysis of cruising seasonality. This layout of traffic by quarters indicates market developments, taking into account the locality of nautical tourism. This table clearly shows that the seasonality is not only a characteristic of Croatian tourism in general, but also of its nautical segment. Seasonality also applies to the global cruise market, and it is appropriate to the hemisphere in which it takes place. Nevertheless, we can conclude that seasonality is least noticeable in the developed cruise market of North and Central America, which is not the case in all other 1

Dowling, K. Ross: „Cruise Ship Tourism“, Cab International Cambridge, Cambridge, 2006

27

markets. From this table we cannot exactly determine the markets with higher or lower seasonality, nor can we identify its intensity or direction. Moreover, it does not provide the explanation of seasonality and its long-term role in development, as well as its role within the concept of sustainable development. In order to find answers to these questions, we have to look into seasonal indexes of the markets we are going to analyze. We will do this by using methods of statistical calculation and analysis of seasonality. 2.2.2

Seasonality of global cruise industry, its intensity and areas of impact

The analysis of intensity and direction of seasonality impact will be based on statistical methods of calculation of seasonal index for particular areas of research. The calculation2 of trends in the development of this phenomenon shows discrepancies in the parameters, not only in terms of quarterly changes of the phenomenon (parameter “b”), but also in terms of its direction, (+) increase and (-) decrease. Discrepancies in the intensity of the quarterly changes in the range of 1:41 indicate a highly developed market. The change of 9.2% in quarterly passenger traffic in the Central- and North-American markets, observed by comparing the max. and min. seasonal indexes, suggests that these are the markets where supply and demand intensely meet, which indicates a high degree of market saturation in terms of cruise offer. On the contrary, unexplored world markets show the highest quarterly changes of 909.6%. Differences of direction in quarterly changes of passenger traffic in mega markets, together with positive and negative application, indicate the mega locality in which cruisers operate, i.e. they indicate whether the north or the south hemisphere is in question. Trend parameters are not sufficient for the assessment of seasonality, therefore it is necessary to compare and examine its indexes. (Table 2b) No. 1 2 3 4

5 6

Markets

1st quarter 23.62

2nd quarter 112.04

3rd quarter 230.64

Tourism in Croatia (tourist arrivals in %) Nautical tourism in Croatia 7.83 128.50 252.07 (issued permits in %) North and Central America 102.46 95.02 94.58 Europe (Mediterranean 32.35 146.67 151.62 basin and Transatlantic together) Rest of the world 128.37 71.52 60.12 Unexplored potential market 139.70 56.71 22.13 Source: Author's calculation, Lukoviđ, T.

4th quarter 22.70

Index: max/min 1.016.04

3.41

7.392.08

105.90 60.23

112.00 469.12

141.34 200.98

236.00 908.18

Table 2b. Comparative overview of seasonality indexes in Croatian and international cruising markets in 2004 2

Lukoviđ, T. „Analysis of the Development of World and Croatian Cruising“, Naše more, Journal of marine scienes, University of Dubrovnik, 55(5-6)/2008, page 233.

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Comparative overview in Table 2b shows that, in Croatia, seasonality is much more present in nautical than in general tourism. Quarterly seasonal index of nautical tourism in Croatia varies within the range of 3.41 in the 4th quarter, up to 252.07 in the 3rd, which gives us a variation of 7.292%. If we compare the seasonal differences between nautical and general tourism; then we can see that seasonal index in nautical is more than 6 times higher than in general tourism. Seasonal fluctuations in the Croatian tourism, especially nautical, are quite pronounced, which indicates its great development potential. There are hardly any residual impacts suggesting a highly pronounced seasonal effect that can be interpreted as a “pure” seasonal impact. This implies that Croatian nautical (in terms of tourism) and tourist markets are not sufficiently developed, which is a good precondition for the development of strategic management of sustainable development at the macro level. The situation is similar in the Mediterranean basin. From the analysis and comparison of seasonal indexes of the world mega-market cruising, we can conclude that the seasonality index of North and Central America markets is not significantly pronounced, which means that there is no seasonality impact. On the contrary, seasonality index is quite expressed on the European market, i.e. in the Mediterranean basin, the Baltic and the European Atlantic region. Although the Mediterranean market is developed, this analysis indicates that the ratio of the market indexes of North and Central America on one side, and Europe on the other, is 1:4. That difference is more pronounced if we compare the developed market of North and Central America with the so-called unexplored/potential, and still undefined market of southern hemisphere. Any conclusions regarding the relatively undeveloped European cruise market should be presented with a great deal of caution, since there is a high level of seasonality caused by climatic factor, as shown in Graph 2a, in the Northwest European market, i.e. the Baltic and the European Atlantic area. However, the development of cruise ship building completely reverses the adverse climatic effects, as we can see in the example on the markets of North and Central America. We can certainly expect further development of the European cruising market in the Mediterranean basin, as well as in the Baltic and the European Atlantic region. With the exception of the markets of North and Central America, the global cruise industry will undoubtedly and continuously develop at a high growth rate. Good financial results of major cruise companies and corporations are an incentive for technological adaptation to the factor of nature. Major cruise corporations build larger and more luxurious, as well as smaller, but well-equipped cruisers which are suitable for reaching small and secluded ports and bays.

29

45

39,16

40

40,70

40,16

36,88

34,93

Mediterranea n

35

32,41

30 25 18,85

20

15,95

15 10

7,67 4,63

4,99

S

V

6,86

5 0

-

O

T

S

L

S

K

R

L

S

P

X-axis: months Y-axis: global markets offer in %

Source: Ross, K., Dowling: «Cruise Ship Tourism», CAB International Cambridge, Cambridge, 2006., p. 25.

Figure 2a. Monthly review of the cruise ships occupancy rate on the European and Mediterranean markets, compared to the global offer (% bed/night; annual average: 24,10%)

Source: Internet, www.portdubrovnik.hr

Table 2c. World's top 50 busiest cruise ports in 2009, according to the number of passengers and calls 30

However, an open question remains as to whether the big cruise companies and corporations understand the importance of natural factor and the limitations of its potential. Recent market developments are encouraging because it seems that the cruise companies have realised that potential tourists and passengers decide to go on a cruise not only because of the offer on the ship, but also because of the nature which is a crucial factor in the complex system of their decision making. Recent studies of the large cruise corporations (Dowling, 2006:240) confirm this statement. This suggests that one should not ignore the other element of large cruiser business, without which the global cruising would not exist, and those are cruise ports. In business terms, the large number of port visitors (Table 2c) of the world's busiest ports is quite positive. Dream World Cruise Destinations Autumn 2009 edition features the world's busiest cruise ports of call, among which Dubrovnik takes the 10th place in the 2008 table of the world's busiest ports of call (according to number of transit passengers who use another port as homeport), as well as the 3rd place among Mediterranean ports, following Naples and Livorno. It is important to emphasize that the top ten places of the world's busiest homeports include five Mediterranean ports (Barcelona, Civitavecchia, Piraeus, Venice and Palma), which confirms how important cruise tourism is for the Mediterranean area. Ports, as well as their respective destinations, face significant seasonality fluctuations that have a negative impact on business results and sustainable development of the destination. Fluctuations range from no cruisers in winter to the peak season in summer when such a number of them arrive so that they cannot all enter a port. Therefore, there is obviously a need for better cooperation between port and cruise operators, particularly in terms of planning. Reconciliation the interests of ‘cruiser-port-destination’ relationship is the backbone for sustainable development, which means that it is necessary to intensify cooperation, understanding and planning.

2.3 Managing seasonality Management analysis, related to the operating of large cruisers, should deal with ports and cruise ships separately. Both use diversification strategy in management, but in a different way, due to the immobility of one and the mobility of the other. 2.3.1 Advantages and disadvantages of seasonality, aspect of activity and management The analysis of global cruise tourism market from the aspect of seasonality, and according to professor Dowling's distribution, shows important differences. Quarterly fluctuations are significant and indicate three primary market groups: a) Saturated market without seasonal fluctuations, the market of North and Central America b) Active market with evident seasonality, European market and the rest of the world 31

c) Insufficiently developed market with high level of seasonality, unexplored potential markets. CLIA3 and ECC4 intensively analyze seasonality in cruise industry, and their results are not only obvious, but also stimulating. Intensive research of seasonality and continuous analysis of the market demand enabled CLIA to almost completely eliminate seasonality in its mega market. Table 4 shows that seasonality is almost completely eliminated on the American market. Good equipment, high quality, reasonable prices, efficient management and, of course, marketing based on market research ensure equal occupancy rates in each quarter. Such conditions lead to lower development rates of the American cruise market. Seasonality is quite noticeable in the European market (Figure 2b).

North/Central America Caribbean/Bahamas Mexican Riviera/Panama Canal Alaska North-East Atlantic Europe Mediterranean North-West Europe /Transatlantic Rest of the world South-East Asia and Far East South Pacific and Hawaii Other sub-markets Total remaining active fleet of cruisers Remaining vessels World cruise ship fleet - total

First quarter 15.767

Second quarter 14.430

Third quarter 14.454

Fourth quarter 16.287

Annual total 60.938

13.582 2.182 0 3 1.433 1.419 14

8.888 1.586 3.190 766 8.395 5.847 2.548

7.155 1.246 4.091 1.962 10.644 6.579 4.065

12.974 2.549 12 752 5.012 5.012 0

42.599 7.563 7.293 3.483 25.484 18.857 6.627

6.251 1.269 1.745 3.237 23.451

3.183 1.384 936 863 26.008

2.425 1.340 890 195 27.523

5.112 1.579 1.992 1.541 26.411

16.971 5.572 5.563 5.836 103.393

1.382 24.833

456 26.464

137 27.660

871 27.282

2.846 106.239

Source: Ross K., Dowling: «Cruise Ship Tourism», CAB International Cambridge, Cambridge, 2006., p. 20.

Table 2d. Quarterly occupancy rate of cruise ships in the primary world markets in 2004 (in 000 bed/night) 3

Cruise Line Industry Association (CLIA) was founded in 1975. It is composed of 19 cruise lines, with more that 150 cruise ships and 16.500 travel agencies. Its turnover in 2005 was 23 billion US$, and 10.5 million people took their cruise vacations. 4 European Cruise Association or European Cruise Council (ECC) conducts important market researches with results important for strategic development, cruise ships re-routing, and creation of new routes.

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1

100

0,9 0,8

90

0,7 0,6

80

0,5 0,4

70

0,3 0,2 0,1

60

0 S

50

V

O

Idle Vessels (unexplored market) -

T

S

Rest of the world

L

S

K

R Europe

L

S

P

North America

X-axis: months Y-axis: offer on world markets in %

Source: Ross K. Dowling: «Cruise Ship Tourism», CAB International Cambridge, Cambridge, 2006., p. 21.

Figure 2b: Monthly review of the structural cruise offer in the main world markets in 2004 (in % bed/night). Structural analysis of global market confirms the previous conclusions from Table 4. Structural overview clearly displays the regular seasonal consumption cycles on cruise markets. An interesting phenomenon is idle vessels, i.e. unexplored potential cruise market, which occurs in the three summer months. That market comprises the still undeveloped market on a part of the Pacific, the Indian Ocean and the South Atlantic, and the part of North Atlantic, as well as some other emerging markets, and it occurs in the period of transfer from the Caribbean to the European seasonal market. Thus, with a minor share of the „rest of the world“ and „idle vessels“ markets, the large European market, compared to the American, has pretty noticeable fluctuations. 2.3.2 Strategic features crucial for the management of cruise ships, companies and port: Cruise ships and cruise companies x

x

It is due to their mobility that cruisers and cruise companies can overcome the problem of seasonality. They use diversification strategy, meaning that they adapt the cruise routes to seasonal fluctuations. Constantly exploring demands of the market, they adjust their cruise routes and develop new ones. In doing so, they increasingly face problems with destinations, or cruise ports respectively. Cruise companies strengthen their market position with larger and more luxurious cruisers, and simultaneously develop small cruiser market. For the moment, that market is reserved for small local cruisers concentrated on the minor regional ports not suitable 33

for large cruise ships. Small, but luxurious cruisers of new charter fleet can enter minor ports of beautiful and interesting towns, prepared for that kind of guests/tourists. For cruise companies that means the application of market spreading strategy, but it also means that small luxurious and local cruisers will fight for their position. Cruise ports x

x

x

x

As a rule, cruise ports welcome a lot of cruise ships, which is positive, but they go against the destination interests since the destination sustainability is often threatened by the adverse effects of seasonality, which is negative. On the saturated market of North/Central America (group a) cruise companies have taken over some ports that were not operating well. This implies that there is a need for intensive and capital bonding between ports and cruise companies, and it is the consequence of the seasonality absence due to market saturation, which is a positive effect. The European, as well as the market of ‘the rest of the world’, needs to deal with seasonality in a variety of ways because of their immobility. For instance, they hire a lot of seasonal workers, make their moorings available for public transportation, develop other services in the off-season, and so on. Nevertheless, what they earned in the high season helped them survive through the off-season. On the active cruise market with evident seasonality (group b), the cooperation of ports or destinations with cruise ships in the field of planning and collaboration is not sufficiently developed, which is confirmed by the presence of seasonality in the business. Very often, the local government limits the number of cruise ship arrivals, which is evidently the result of the lack of cooperation.

2.3.3 Strategic development of cruise industry, and seasonality control concept When we analyze the strategic development of cruise industry, then it is of utmost importance to know the environment in which it develops. Apart from the particular features of each of the analyzed markets, the impact of seasonality should also be taken into consideration, which we did. However, if we analyze cruise industry development within the concept of controlling, then we have to base our analysis on four controlling principles: 1. 2. 3. 4.

focus on the problem or subject, clear objectives, focusing activities on the realization of the objectives and long-term success, orientation towards the future

This means that the development, as well as all the factors of its successfulness, should be clearly shaped at all levels of cruise industry (being the tourist and nautical phenomenon). In doing so, the goal of each entity in cruise industry should be defined. Thus, the goal of cruise ships, as well as of companies, is profit. Profit is the goal, but it also has to be a long-term objective in terms of sustainable development. It brings us to the conclusion that strategic planning, together with the overall strategy, is responsible for the future of cruise industry. 34

Although we are now talking about the strategic development of cruise industry in general, all that depends on the development of cruise ships and ports. This development depends on the performance of cruise ships at sea, whether large, small, local, or owned by big companies, as well as those on the rivers, lakes, and canals; finally, it depends on nonspecialized and specialized cruise ports. Therefore, overall strategy and all the entities are important. Strategic planning has a key role, and we are going to present a matrix/scheme of such a planning system, according to the controlling concept.

1. Long-term business and political objectives of the operating with existing and new routes

2. Strategy of target realization

3. Premises (to meet the objectives; important assumptions that cruise management has no influence on) 4. To meet the objectives, it is necessary to implement the following measures in four business segments)

Our main market Potential and new market Appear on the market as a cruise ship Arrange a presentation on the two world’s designed to meet the needs of largest fairs of cruise ships (Miami, passengers/tourists on all the routes. Europe), Implementation of the following market x Participate in the competition for advantages: “green star” in 2010. x create the image of the best cruise ship x Establish a better connection with ports and confirm it with a “green star” in India, China and other new assigned in 2008, which means to attract destinations. elite passengers, x organise entertainment that no other cruise ship has. - Distribution: Use the existing status to advertise via internet, and at the same time strengthen the marketing and sales services. - Advertisements must be oriented only to the market of the most luxurious cruise ships, 95% of advertising should focus on the potential and new, and 5% on the existing markets. a) relative to the objectives and strategy b) relative to the five-year goals (income and result) The initial results confirm the expected Competition is preparing new routes; revenue from doing business with the therefore, based on the research we target clients. carried out, we are developing a new program of additional services that the market needs and the competition has not developed yet. Sales Production Procurement Financing -Reduce credit - Get in touch with -Finalized Training, better indebtedness and the performers of preparations for technical find cheaper the night program new services of equipment and sources of popular with night parties. better financing. tourists. -Finalized qualifications of - maintaining the - Field trips the sales and marketing preparations for current prices. tourists want. entertainment on service on a cruise -Increasing the use the new ship. of loans of our destinations of new company. routes.

Source: Author Lukoviđ, T.

Table 2e: The scheme of strategic planning on the example of a large cruise ship (simulation)

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Cruise ports, i.e. all cruise entities, will develop similar strategic plans. The sum of all strategic plans, based on the cruise concept of all entities in the industry, will stipulate the development of cruise industry as a global nautical and tourist phenomenon. Development of each area should be controlled, particularly in this time of crisis; therefore we advocate the concept of integral development, which means harmonising the approach of all the entities in cruise industry regarding the issues of development, and improving their relations. The concept of organized integral development, with the application of controlling principles, will help avoid the adverse situations that have arisen in some industries, such as in air transport5. The fact that cruise ships and companies face distinctive development problems does not deny their need for better cooperation with cruise ports. The challenge of sustainable development, as well as the problems destinations face in the peak and in the off seasons, indicate the need for adjusted basic parameters of integral development. On the global market the situation is quite different if we observe cruise industry and its development on the primary world markets. The basic conclusions of the situation and development opportunities would be as follows: x

x x x x

x

Developed, but saturated cruise market of North America records no significant developments, but finds new strategic ways of maintaining the traffic of passengers. Market saturation made the prices of cruise arrangements on large cruise ships acceptable for tourists of lower purchasing power, and that form of cruising can be classified as mass tourism European cruise market grows in the coastal and in the continental region. Europe develops special types of cruising, based on prosperous local and regional features. The Mediterranean, an attractive market because of its rich history, records high rates of development, but also a distinct seasonality Baltic, as the market with specific features and evident seasonality, has great opportunities for development Continental European market on rivers, lakes and canals develops cruising as a part of entrepreneurship. This form of cruising is compatible with the general tourist offer of the continental sites Unexplored world markets have the role of a ‘joker’, because for the moment they serve to ‘fill holes’ in the cruise-route itinerary. This is changing since cruise companies are intensively processing, preparing and developing this market

2.4 Conclusion World cruising market shows substantial differences in the level of development. In terms of seasonality on the primary world cruise markets of North and Central America, Europe (Mediterranean and Transatlantic together), the rest of the world, and the unexplored potential markets, the ratio of differences among the most and the least developed markets 5

At the International meeting of representatives of world airline companies and airports, held in Dubrovnik in the autumn 2009, it was concluded that airports had enormous profits, whereas airlines reported huge losses and a decline. It was proposed to accept the concept of integrated development in the aircraft industry, so as to ensure the same conditions of strategic development for each entity.

36

is 1:9, measured by the seasonality index. Saturated markets of the North and Central America have been analyzed in the time of global crisis, and the general conclusion is that they have reached their maximum. Under the pretext of sustainable development, they are trying to maintain the status quo, although it can be labelled as saturated market if observed from the aspect of seasonality. It is due to the saturation and the need for development that there is a better cooperation with cruise ports. Europe, the Mediterranean, other markets as well, base their possibility of cruise industry growth on the classical concept of strategic development, since they think there is room for development within the phenomenon of seasonality. Despite that, the market competition among various types of cruise ships, with associated ports and destinations, has just started. Neither at this level, nor in the relations among cruise ships, ports and destinations, have the conditions for long-term sustainable development been achieved, although they are imposed as a fundamental element of development. In the peak season there are too many, whereas in the off season there are no cruise ships, and that is a result of failure in the operating and strategic integral planning of all the entities in the industry. This condition is negative for each of the entities, and that is why there is a need for cooperation. Since the development of each entity in the cruise industry is at stake, the entities themselves, with mutual respect, should get organized in order to solve their issues of strategic development.

2.5 References x x

Lukoviđ, T. (2008). Analyses of development of Croatian and World Cruising, Naše More, 55(5-6), Sveuēilišta u Dubrovniku, 2008 Dowling, R.K. (2006): Cruise Ship Tourism, Cambridge: CABI Publishing

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3.0

Evaluating cruise demand forecasting practices: A Delphi approach

Hannah Kollwitz Oxford Brooks University Oxford, UK Alexis Papathanassis Institute of Maritime Tourism Bremerhaven University of Applied Sciences Bremerhaven, Germany

Abstract This work evaluates current cruise demand forecasting practices with the main focus drawn to the European branch. Various forecasts underline the immense growth potential of this particular cruise market tempting cruise operators to launch additional capacity in this market. Given under-capacities in the cruise sector, forecasts tend to focus on the expected availability of lower berths rather than the market’s demand for them. The implicit assumptions here are: Conditions of under-capacities and a near-100% capacity utilisation will persist in the foreseeable future. Those implicit assumptions potentially render forecasts into self-fulfilling prophecies thus warranting further examination and discussion. This study adopts a Delphi methodology in order to examine the influence and validity of such assumptions. Cruise industry experts were questioned on their expectations for the development of European cruise industry over the next ten years. The aim was to identify their perception of published forecasts and the influence they exert on the market’s development. Our research results confirm the tendency towards self-fulfilling prophecies. New cruise ships are financed and ordered on the basis of an increasing demand, which is nevertheless fuelled by lower prices set by cruise operators creating an ‘artificially-maintained’ under-capacity, reinforcing existing forecasting practices. Keywords: Cruise Tourism Demand Forecasting, Under-Capacity, Delphi-study.

39

P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_3, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

3.1 Background & objectives For several years it has been pointed out that the international cruise industry is annually growing by an average rate of eight per cent (CLIA, 2008). The European cruise business, the world’s fastest growing cruise markets, is now where the North American market was 20 years ago – “primed and ready for growth” (Ariston, 2006). Even in the time of the recent financial crisis, reports promise an average growth rate of 18 per cent for the German cruise market for the year 2009 (Koch, public presentation, May 11, 2009) while the United Kingdom, the second biggest source market after America, expects to reach two million passengers by 2012 (Dennis, 2008). According to SeaConsult, international cruise operators have recently discovered the lucrative European cruise market and are launching more and more additional capacity in this segment (cited in Welt-Online, 2008). The shared view among analysts and shipbuilders is that the number of ships required to satisfy European demand has not been reached yet. (Antonini, 2008) These expectations underline the impression of an unaffected and never ending fairy tale. The cruise industry is still growing as far as capacity is concerned. Above all, the European market shows a rapid growth. However, this growth and the predicted developments are mainly based on the supply side since enough potential is perceived on the European market. If these forecasts are promising, companies plan accordingly. Therefore, this work examines if forecasting cruise demand is professional practise or rather wishful thinking with the potential of creating self-fulfilling prophecies. Faulkner and Valerio (1995) argue that there is a naive attitude towards forecasting, characterised by a tendency to adopt forecasts without challenging, or even considering, their underlying assumptions. Assessing current forecasting procedures reveals that especially in the cruise industry as described by Faulkner and Valerio’s arguments (1995), forecasts may be accurate but based on the wrong assumptions. This has an impact on the cruise industry as many forecasts have already adjustment. Although forecasting is a key input for strategic management, but it is still in its beginnings and a naive attitude towards forecasting can be observed. It is reflected in the frequent acceptance of forecasts without questioning underlying assumptions. A forecast might be accurate but based on wrong reasoning; while under other circumstances a soundly-reasoned forecast might not eventuate. Some forecasts have such an influence on planning targets that they become self-fulfilling prophecies. (Faulkner & Valerio, 1995) Forecasts made for cruising promise an increase in cruise passengers; as these are based on the supply side, these forecasts are influenced by new cruise ships planned until at least 2012. If cruise companies rely on these forecasts and decide to acquire additional capacity on this basis, the forecasts turn into a self-fulfilling prophecy. A tremendous array of methods exists, but due to the young age of the cruise industry, applying common quantitative forecasting methods is subjected to significant validity limitations. The relatively small amount of available historical data renders both trend extrapolation as well as the development of sufficiently-validated forecasting models 40

unreliable (Gregan-Paxton et al., 2002). Nonetheless, planning ahead is of paramount importance since launching new, capital-intensive ships has to be planned carefully; shipyards specialising on the production of cruise ships are scarce and already fully booked two up to three years in advance. Decisions to launch additional capacity on the market have to be taken well in advance. This implies that decisions need to be based on accurate and reliable extended projections, putting the applied methods in the cruise industry into the spotlight. Despite the common awareness that tourism is a very complex construct that can easily be upset by external factors like an economic crisis or a natural disaster, forecasts for cruise demand mainly still rely on an arguably simplistic reasoning. It is assumed that additional capacity is generating additional demand. The forecasted growth of the European market tempts cruise operators to launch more ships in this market. Since the supply side forms the basis for demand forecasts this additional capacity positively influences the forecasts.

3.2 Literature review 3.2.1 The need for tourism demand forecasting Tourism is a demand driven, service-oriented industry, experiencing rapid growth and innovation (Chu, 2008). Along with this phenomenal growth in demand over the past two decades the interest in tourism research has correspondingly increased. Within this context, modelling and forecasting demand has attracted much attention. (Song, & Li, 2007) Efforts to establish guidelines for practitioners in selecting forecasting techniques have been characterised as unsuccessful (Song, & Li, 2007). The last thirty years have seen many studies of international tourism demand forecasting by tourism researchers and practitioners (Coshall, 2009). Faulkner and Valerio (1995) argue that progress has been made in the development of tourism forecasting techniques as it moved beyond reliance on pure guesswork and gut feelings to more rigorous approaches involving the use of econometric models. However, managers may lose sight of forecasting as an integral part of strategic management by viewing forecasting as simply an attempt to anticipate the future. The primary aim of forecasting is reducing decision-making risk. Particularly forecasting the demand for a tourism product is a core aspect of this (Frechtling, 2002). Forecasting tourism volume is important since it is an indicator of demand providing basic information for subsequent planning and policy making (Chu, 2008). Arguably, all industries are interested in this since it helps to improve the allocation of scarce resources to avoid shortages or surpluses (Burger et al., 2001). Economic forecasts are very important for investors and governments trying to improve future business performance. This renders forecasting a highly important field for the tourism industry needing accurate predictions of demand for planning effectively from season to season (Vella et al., 2008). Therefore, tourist arrival variables have been the most popular measure of tourism demand over the past few years (Song & Li, 2007). Middleton (1990) claims that in tourism this need might be more acute, 41

because the perishability of tourism products increases the necessity of matching supply with demand. Frechtling (2002) states that demand can be shaped in the short run, but has to be anticipated in the long run; especially due to the fact that leisure tourism demand is extremely sensitive to natural and human-made disasters. Forecasting can be defined as a process aimed at “predicting a future event” (Vella et al., 2008). At its most basic, it “takes historical fact and scientific knowledge … to create images of what might happen in the future” (Cornish, 1977, cited in Frechtling, 2002, p. 8). In 1982, Alain Aspect contended that the reality is an illusion and therefore the future is also an illusion (Aspect, cited in Walonik, 1993). This led to a number of supporting statements by Walonik (1993): 1. 2. 3.

It is impossible to state what the future will be with complete certainty; an element of uncertainty will always be an issue. There will always remain blind spots. Forecasting assists in formulating social policy which has an effect on the future and will thus changing accuracy of the forecast.

For tour operators, the most useful forecasts concern tourism demand for the following season or year; because such short forecasting horizons tend to provide the most accurate results. Irrelevant of whether long or short-term forecasts are generated, the accuracy of any forecasting methodology can be affected by unforeseen factors (Vella et al., 2008). Cooper and Hall argued that “a number of possible futures for tourism exist which are more dependent on factors outside of the industry, such as environmental change, economic conditions and lifestyles, than things within the control of tourism destinations of firms” (Cooper & Hall, 2008, p.376). Tourism demand is a very complex construct influenced by economic, socio-psychological and exogenous determinants (Uysal, 1998, cited in Page, 2009, p.87) which themselves are volatile and sensitive to catastrophic influences (Frechtling, 2002). The tourism industry needs to be able to quantify the likely impact of shocks to the demand system; either when the shock takes place or after (Coshall, 2009). The aim of forecasting cannot be generating perfectly quantifiable predictions of tourism demand. Since this is almost impossible, the predicting the most probable level of demand is a more pragmatic ambition. Experts’ opinions and educated guesswork are effective options taking factors into account which may be ignored or over simplified in mathematical models. Qualitative methods aim at quantifying risks of complicated or unpredictable events such as terrorism or changes in the global economic markets. Nevertheless, numbers and precise predictions about tourism demand enable more precise planning and thus are more often preferred by managers (Vella et al., 2008). Quantitative methods organize past information about a phenomenon by mathematical rules assuming that at least some elements of past pattern will continue into the future (Makridakis, 1986). The choice of method depends on what is to be predicted, the level of precision required, and the timeframe (Vella et al., 42

2008). Generally, historical data is used to predict the future. However, the ‘right’ forecast has not been identified yet. Qualitative as well as quantitative methods contain a significant degree of subjectivity. Walonik (1993) argues that if two people use the same model on the same data, the forecast will not necessarily be the same. Mathematical models involve smoothing constants, coefficients and other parameters that must decided on by the forecaster. (Walonick, 1993) 3.2.2 Which is the best forecasting method? Descriptions of the various techniques employed in forecasting of tourism demand are documented by several authors such as “Arscher (1987), Armstrong (1985), Calantone et al. (1987), Bar On (1984), Usyal and Crompton (1985) and Van Doorn (1994) with the general conclusion that each method has specific strengths and weaknesses” (Faulkner and Valerio, 1995, cited in p. 167). Commonly, scientists tend to agree on the data type and collection methods, but disagree on their interpretation. One reason is that all details irrelevant for the investigator’s theoretical arguments are source of a potential alternate hypothesis for explaining the obtained effects theoretically (Neale & Liebert, 1986) It might be likely that investigators neglect details which seem irrelevant for their argument. Yet, ignoring these might lead to wrong conclusions. Various opinions on the performance of forecasting methods exist. Song and Li (2007) state that tourism demand modelling relies heavily on secondary data in terms of model construction and estimation. At the end of the day, the availability of the data determines the forecasting methodologies which should be used to generate reliable forecasts (Song & Li, 2007). The question raising most interest is whether the advantages of several methods can be pooled to generate combined forecasts that are significantly superior to those generated by individual models (Coshall, 2009). Wong et al. (2006) point out that existing non-tourism literature shows that forecast combination can improve forecasting accuracy. The technique of combination was first introduced by Bates and Granger (Wong et al., 2006). However, each method has its own particular advantages and disadvantages. No single forecasting method can generate reliable forecasts in all situations and the relative accuracy of the different models varies with the destination and the lengths of the forecasting horizons (Witt & Song, 2002, cited in Wong et al., 2006, p. 1068). Practical tourism forecasting does not always involve only one method; there is no limit to possible combinations of methods that can be used. At one end of the spectrum there are simple no-change (quantitative) forecasts that can be adjusted on the basis of the (qualitative) opinion of one or more experts. At the other extreme, there are causal models which can add a quantitative dimension to the qualitative scenarios (Vella et al., 2008). According to Witt and Witt (1992) complex modelling approaches are not necessarily more accurate than simpler time-series. It is more prudent to apply a combination of such approaches to a given situation (Faulkner & Valerio, 1995). It is worth noting though that there is no best combination (Vella et al., 2008). Armstrong (1989) underlines this by demonstrating that combining individual forecasts 43

produce consistent gains in forecasting accuracy, although just modest ones. Research does not indicate the conditions or methods for the optimal combination of forecasts (Armstrong, 1989). It is often cost-effective and easier to perform a qualitative forecast or a combination of simple extrapolative forecasting supported by qualitative judgment. Hence, many tourism companies are moving towards the use of qualitative forecasts (Vella et al., 2008). According to Makridakis (1986) these judgmental forecasts can be argued to be superior to mathematical models. This is based on their ability to take into consideration the complexity of the real world opposed to the simplified assumptions made for mathematical models. Coshall (2009) suggests that combining models leads to superior forecasts compared to individual forecasts in terms of accuracy and that more sophisticated methods of forecast combinations perform better than simple mean-combination forecasts. Chu (2008) argues that choosing a method should mainly be based on the accuracy of the forecast generated, the ease of use of the technique, the cost of producing it and the speed at which it can be produced. The most attention has to be turned to the issue of accuracy since it is the most important factor (Chu, 2008). Faulkner and Valerio (1995) remind us that regardless the approach chosen, one ought to accept that the future cannot be predicted with any degree of certainty.

3.3 Research methodology The qualitative research was divided into two phases, the preparation phase and the research phase. Firstly, information on the formation of cruise demand forecasts was acquired as a basis for the ensuing Delphi Study. 3.3.1 Preparation phase: How are cruise forecasts formed? In order to gain information and knowledge in the field of cruise demand forecasting, indepth interviews with experienced practitioners in this field were carried out. The interviews aimed at giving an insight into which methodologies are used and why these options are chosen. Forecasters are subject to an underlying set of assumptions related to the industry which, in turn, influences their choice of methodology. Interviewees were selected based on their knowledge and experience with cruise demand forecasting. Therefore, the professionals interviewed included individuals working for DRV, GP Wild and INR Research. Partly, the interviews were conducted on the phone. However, the major part of the questionnaires was answered by e-mail. Questions focused on their general experience with forecasting, the origin of the input data and how their reliability is ensured. Following this, the next section focused on which forecasting methods are used, why they were chosen and which alternatives exist. In addition to these questions, it was also examined whether the validity of the forecasts produced was checked and if this was fed back to the methodology used for future forecasts. The interviews had a semi-structured character in order enable dominant, widely-adopted future-related beliefs and assumptions shared by professionals. These assumptions were utilized as an input for the following Delphi study in combination 44

with the already outlined argument about the general naïve attitude towards forecasting (Faulkner and Valerio, 1995). 3.3.2 Second phase: Delphi study - ‘The development of the European cruise market’ The assumptions identified in the preparation phase founded the basis for the Delphi Study which assessed the validity of these assumptions and focused on the perception of forecasts published about the cruise market development. Faulkner and Valerio’s (1995) statements contributed to the forming the questions for this Delphi study. They were concerned about the lack of communication between forecasters’ expertise and the industry itself and the lack of questioning the underlying assumptions. This leads to a ‘forecasting alienation’ (i.e. separation between production and utilization) with the consequence that forecasts are just accepted without being questioned or challenged. Returning to our research focus, we were questioning the professionalism of cruise demand. Naïve utilization of cruise demand forecasts, based on questionable assumptions may well lead to misplaced optimism and misguided decisions in the long-term. In other words: Is the continuous growth of the European cruise market is a self-reproducing belief or a reliable forecast? 3.3.3 Delphi-panelling as a research methodology The Delphi method is a flexible research technique organising and providing a structure for a group of individuals dealing with a complex problem (Korhonen- Yrjänheikki, 2009). Even though several variations of this technique exist, all of them share the principles of: anonymity, iteration and controlled feedback (Skulmoski et al., 2007). In an iterative process anonymous judgements are collected and distilled using a series of data collection and analysis techniques interspersed with feedback. In each subsequent round, all participants are made aware of the results of the previous round of questioning, so that the opinions expressed in the new round are enriched by earlier outcomes (Weaver & Lawton, 2006). The Delphi iterations come to an end either when consensus is reached or after a pre-defined number of rounds have been completed. While the purpose of a Delphi study is to develop a consensus among experts regarding the future, an analysis not reaching consensus can also be enlightening by understanding why they disagree (Medical Library Association, 2005). A mixture of the purely qualitative and the consensus-driven Delphi is used to discover as many arguments and points of view on the issue under investigation as possible (Häder & Häder, 2000). Focusing on the advantages of the Delphi method employed for this piece of research, the most obvious and convincing argument is the method’s potential of converting expert opinions on issues, in cases where there is not a single, clear answer (Linstone & Turoff, 1975, cited in Korhonen- Yrjänheikki, 2009). Consequently, the key success factor for this work was the selection of the panellists. Since the results of the Delphi study depend on the knowledge and co-operation of participants, participants who are likely to contribute 45

valuable ideas are essential. It is also important that respondent group members represent the research issue from different perspectives (Gordon, 2002, cited in Korhonen- Yrjänheikki, 2009). Therefore, a blended mix of participants was aimed at. The absence of discussion and communication between the participants contains a number of benefits. It hinders unintended group dynamics and influenced tendencies in opinions which could be reinforced by the presence of other researchers. Nevertheless, the answers created by such an expert panel are informed and take complex factors into account; different than mathematical equations trying to simplify the real world and relationships between variables. Hence, time horizons with this technique can be broader. Additionally, the Delphitechnique enables idea sharing and discussing complex issues despite geographically distance. It offers convenience to participants, as they can contribute from their own office or home (State of Victoria, 2007). Although the Delphi-technique is an effective method, there are a number of limitations to consider (Shin, 2001). Among the problems associated with the Delphi-technique is the identification of the appropriate pool of experts who represent the desired balance of opinions, philosophies and experience. Soliciting experts’ participation is time consuming and obtaining the panel feedback in timely fashion needs to be planned ahead accordingly. From a students’ point of view only few if any experts are likely to take part in a study which is not sponsored and coordinated by a well-known professor or university (Weaver & Lawton, 2006). As the critical factor for the success of this Delphi study was the willingness of the selected experts to take part and their knowledge of the field under investigation, soliciting their participation represented a considerable challenge. Moreover, there is always the risk of misinterpretation responses and the inability to obtain consensus could encourage researcher bias (i.e. temptation to ‘fit’ responses into a pattern of consensus). Therefore, the results were subject to potential biases or misinterpretation from the researchers. 3.3.4 Participants Focusing on the mixture of a purely qualitative and a consensus Delphi ten cruise experts were questioned over three rounds on their opinion concerning underlying forecasting assumptions and their views on the resulting published forecasts. The aim was to reach a consensus on the development of the European cruise market in order to assess whether the assumptions made by forecasters are valid; indirectly assessing the quality cruise demand forecasts. The participants were purposively selected based on: their broader knowledge and experience on the issues under investigation, their willingness to participate, their availability and their communication skills (Skulmoski et al., 2007). The aim was to obtain a well blended mix of opinions from several areas in the industry. Therefore, participants’ occupations cover the cruise industry itself and affiliated areas such as: academia, interior design of cruise ships, ship design, itinerary planning, personnel planning for cruise ships and the IT solutions for cruise ships, providing different perspectives on the 46

topic under investigation. Since broad experience in the cruise sector was a main criterion, participants’ occupations ranged mainly from middle to top management. Soliciting experts’ participation was the major part of the preparation for this Delphi Study. The phase of acquiring participants started on the 6th of May 2009 and was successfully concluded on the 3rd of June 2009. 3.3.5 Data collection The actual data collection started on the 10th of June 2009. A range of open ended questions were used to find contradicting points to focus on in the following round. In order to explore cruise demand forecasting processes, the question areas revolved around the assumptions identified in the preparation phase, the reliability and transparency of current forecasts and the general opinion of which factors influence the quantity of cruise tourism demand. The consolidated anonymous summary of round I was sent out to all participants giving them an overview of the responses and expectations of the other experts. Round II focused on extreme statements which all participants were asked to comment on. The outcome was again distributed to the participants. In the final round the initial questionnaires were reassessed and the responses were refined where necessary. This last round ended on the 30th of June 2009. The process stopped after a pre-defined stop criterion which was the number of rounds. Three rounds were considered as sufficient to reach a consensus; any additional round would not have provided new information. The rapid opinion forming was enabled by fast response rates from the participants. The contact with the facilitator was enabled by constantly communicating via electronic messages or telephone calls. Additionally, participants were given the option to answer the questionnaire by e-mail or during telephone interviews, minimizing their time involved. In general, the response rate was high which underlines that the participants did not lose interest halfway through the research. The Delphi-technique seeks to alleviate biases associated with face-to-face interaction and peer-pressure biases within a group, by keeping the responses and the respondents anonymous (Walonick, 1993).

3.4 Findings & discussion The outcome of these interviews underlined the impression that certain underlying assumptions influence the choice of the forecasting methods applied for cruise demand forecasting. The main forecasting assumptions identified in the preparation phase revolve around: 1. 2. 3.

External factors such as the price or the economic situation have no influence on demand. Under-capacity is predominant. Additional capacity also generates more demand for cruising. 47

4. 5. 6.

Reliable and accurate forecasts are produced by focusing on the supply side. No method available for generating similarly reliable results. Most forecasts focus on short-term prediction.

3.4.1 Results of the Delphi study Summarising, it can be argued that participants divided the industry according to products; the current and planned range of products leading to a fragmentation and diversity of the cruise market. Dividing the industry into the product offerings make cruise demand more liable to external influences like economic shocks or prices. The price has already been pointed out as one of the main issues. On the one hand it is generating the demand. Not only capacity has an influence, but the price is determining the demand of the next season. On the other hand, the price development makes some participants wonder how low it can drop with cruise companies still being able to generate revenue. A large proportion of the profit margins are already generated by on-board revenue and not purely with ticket sales. These developments are not taken into account when cruise demand forecasts are made. Initially, the basis of forecasting cruise demand was one of the contradicting points. It is now apparent that (according to the participants) not all the necessary information is accounted for in these forecasts. The current situation of under-capacity is not expected to be true. Capacity growth until 2012 will be significant, but will presumably have to stop at some point. The maximum occupancy is reached with the current pricing strategy creating the impression of further demand potential. Participants argued that the price is the reason for the increase in cruise demand; the low ticket prices are the reason why even in the consequences of the current financial crisis passenger numbers increase. 3.4.2 Revising the main forecasting assumptions These findings underline argument of a general naivety towards forecasting. Frequently, forecasts are accepted without questioning the underlying assumptions. Forecasts may be accurate for all the wrong reasons. A good forecast may well not eventuate while others influence decision makings strongly and therefore become self-fulfilling prophecies. (Faulkner & Valerio, 1995) Revising the main forecasting assumptions leads to the following: 1. 2. 3.

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External factors influence cruise demand. The younger the cruise passengers become, the stronger this impact will be. Under-capacity might be the case, but it will not continue endlessly. More capacity might generate more demand for cruising, but the main determinant is the price since it generates the demand.

4.

Basing forecasts on the supply side may have generated accurate forecasts to date, but most of them are rarely transparent and were subject to correction. This leads to a more critical view on published forecast.

3.5 Discussion of findings Practitioners argue that the best option is used and no alternative similarly reliable forecasting method exists. Until 2008 the forecasts seemed to be fairly accurate and although some forecasts had to be adjusted slightly, the accuracy up to date is not questioned. However, Faulkner and Valerio’s (1995) arguments for an integrated forecasting approach seem to be valid. Underlying assumptions concerning the cruise industry have not really been challenged so far. On the one hand the practitioners argue that due to the young age of the cruise industry forecasting cruise tourism demand can and even has to be, based mainly on the supply side taking the capacity as the only limiting factor. Additional capacity is consequently generating demand since it is not affected by factors such as the economy, marketing expenditures, socio-psychological and exogenous factors. The difficulty of forecasting demand in a young industry has been underlined by the literature, since not enough historical data is available which limits the choice of appropriate methods for demand forecasting (Gregan-Paxton et al., 2002). On the other hand several researchers on tourism demand argue that it is a very complex variable which is affected by several macroeconomic factors such as the economic situation which cannot be influenced by the cruise companies. The Delphi study has underlined that practitioners working within the cruise industry have seen the impact of these factors on cruise demand. Especially the current financial crisis is a good example. Hence, current forecasts had to be corrected. The forecasting methods which seemed to be reliable up until last year suddenly seem to be considered in a more critical manner. The results of the Delphi study indicate an increasingly critical mindset towards forecasts. The respondents concluded the younger the passengers will be, the more impact these economic shocks will have. Younger passengers will still be in the middle of their careers, which render cruise tourism demand sensitive to macroeconomic events. At the moment it appears that the demand for cruising is outstripping the available capacity. It has also been argued that this demand is generated by price reductions and is cannot be considered indefinite. This suggests that although forecasts have been proven accurate (to date), they could be based on misled assumptions (Faulkner & Valerio, 1995). This would be the case if the assumption of permanent under-capacity is not valid or at least not in the form it has been publicised. The practitioners interviewed admit that tourism demand determinants (economic, socio-psychological and exogenous factors) also hold for cruise tourism demand. They contend that the influences of economic shocks like the financial crisis have an impact which is already noticeable and is expected to increase in the next year because cruising is a market which is booked very early in advance (Goern, personal communication, June 3, 2009). The impacts are visible on the supply side as well. Some large cruise operators called a halt on cruise ship building. Considering the current forecasting practices this development would have an influence on the cruise tourism 49

demand between 2012 and 2014. Although cruise tourism demand forecasters are aware of such influences, they are not taken into account when forecasts are produced, which was underlined by the practitioners questioned in the preparation phase. In recent years, a growing interest to the validity of behavioural research became apparent. People tend to see and even to bring about what they expect, a phenomenon referred to as the self-fulfilling prophecy (Darley & Fazio, 1980, cited in Neale & Liebert, 1986, p. 125). The tendency to judge matters according to our expectations is quite pervasive (Neale & Liebert, 1986). The results show that there are two main attitudes towards the question whether forecasts significantly influence the development of the cruise industry or not. Mainly, participants stated that the optimistic projections nurture cruise operators’ image of further growth. Optimistic forecasts make them plan ahead accordingly. New ship orders have to be planned well in advance. However, the other extreme argues that the cruise industry is ‘made’ by the cruise operators whose decisions are based on their own, individual perceptions and plans. Of course, they take into account the market potential for the product they offer or want to launch. However, these decisions are not based on formalised analysis. According to the Delphi participants, a recent example is TUI Cruises who re-fit an old cruise ship which was operated for the American market and launched it in the German market. More and more international cruise operators also target the lucrative European cruise market re-locating their capacities to this branch. 3.5.1 Summary Participants pointed out that cruise operators have to decide now whether new ships are needed or not. Shipyards are booked out up two to three years in advance. A year ago the predictions for cruise tourism demand have been more optimistic as the current economic shock had no impact. Decisions to launch more ships were influenced by the general atmosphere in the industry. Since additional capacity is expected to generate more demand for cruising, the decision to launch a new ship is influencing newly generated forecasts again. Hence, there seems to be evidence for self-fulfilling prophecies. The industry keeps the image of the growth phase as more capacity is added. This influences the decision-makers’ perceptions and ultimately their business development plans.

3.6 Implications & further research 3.6.1 Implications Despite the fact that tourism demand has proven to be volatile and easily affected by external factors, cruise demand forecasts rarely take them into account. The impact is that the financial crises 2008/2009 forced forecasters to adjust previous predictions and forced managers engaged in cruise tourism to consider them more critically. Some may argue that 50

all forecasts for the cruise industry are purely based on the supply side. This is of course a simplification. Yet, it is assumed that increasing capacity will generate more demand and therefore the main focus can be drawn to the supply side. Research has underlined that this is expected to change. Demand cannot be expected to outrun supply indefinitely. These basic forecasting assumptions will need to be adjusted, encouraging the utilization of alternate methods or combining forecasting methods. It remains questionable though if all the assumptions made are correct. Currently, forecasts are not very transparent. Participants stated that sources are unknown. Thus, they do not rely on these projections. Some of them might be relevant, but to some extent Churchill’s (n.d.) “do not trust any statistic you did not fake yourself” still seems to have an impact in this context. A result of the main assumption of demand outstripping supply is the ongoing growth which had been extensively publicised extensively over the last years and has led to the question whether this growth was reality or just a construct based on wrong assumptions and misinterpretation. It has been argued that the growth which is based on additional capacity is only an illusion. In reality, the surplus of demand is caused by pricing strategies. Recently, cruises are promoted by through aggressive pricing; lower package prices than any other tourism destination can offer. Tourists do not get a cheaper offer anywhere. This suggests that one main determinant for cruise demand is the price, an economic factor. If competitors such as hotels and other destinations, plainly different holiday options, lower their prices, the supply demand disequilibrium might change into the reverse. This time the effect would not be as positive for the cruise industry as before. The development of the European cruise industry is expected to be similar to America where cruise tourists represent 3 per cent of the population. If demand is rising at the same rate, this 3 per cent figure seems to be realistic for Europe. In general, the European cruise market is still to grow. Capacity is growing since more ships, corresponding to more additional berths, will be launched until 2012. Due to a lag of time the impacts of the financial crisis will manifest in a decline of additional capacity after 2012. The financial crisis has led to a number of new ship order cancellations. As the basis for cruise demand forecasting is the supply side, these cancellations of additional capacity will have influence on new forecasts. Alternatively stated, it is worth mentioning that up to date the cruise industry has managed to balance a paradox between the complexity of tourism demand determinants and supplybased forecasts. Underlying assumptions seemed to be valid which encouraged forecasters to continue with the current methods. However, under-capacity, if it really is the case, does not seem to proceed endlessly. It is expected to change which challenges current forecasting methodologies. Literature suggests that reliable and accurate forecasts are generated by combining forecasting methods. Forecasting the future of cruise tourism demand will remain a challenge; mainly, due to the young age of the cruise industry and the lack of extensive, reliable historical data. An important aspect of forecasting is that a variety of variables and parameters depend on the forecasters’ interpretation. These findings underline Faulkner and Valerio’s suggestions that more communication between forecasting specialists and the industry should take place. This would encourage the monitoring and continuous evaluation 51

of the underlying assumptions. Challenging assumptions might lead to their reconsideration, thus impacting on the choice and application of forecasting methods. Forecasting is a useful tool supporting decision-making when applied correctly. The actions taken based on these forecasts are followed by reactions. Hence, the future development is influenced by forecasts and vice versa. If constant growth is promoted and ships have to be ordered years in advance, this is having an influence and the phenomenon of self-fulfilling prophecies emerges. Circumstances can change; this does not imply that current forecasts are unreliable; just that they should be utilised under a more critical manner. In the past, cruise demand forecasts had to be corrected to account for recent economic shocks, rendering the assumption that cruise customers are recession-resistant highly questionable. 3.6.2 Future recommendations Future research could focus on the aspects which could not be further elaborated on in this work. Under-capacity was outlined as a major underlying assumption. It is expected to change influencing the forecasting methods. This could be assessed focusing on when undercapacity will not be the limiting factor anymore and which forecasting methods would be appropriate. Keeping the interest in this area, it has been argued that under capacity is an illusion. Further research could focus on assessing how much influence the prices set by the cruise operators generating this demand. Recently, the centre of attention was put on the supply side, but future research should take the demand side and the influencing factors of tourism demand into consideration as well. The Delphi participants gained respectable work experience in the cruise industry and agreed on the factors which have an impact on demand. Including them into existing forecasting models may well be a starting point for sound forecasting. Authors argue that combining forecasting methods tends to generate more reliable results. Hence, future research could focus on the development of context-specific forecasting method combinations to create reliable forecasts, perhaps including a more rigorous qualitative element to rigorously assess and revisit underlying assumptions. Additionally, it would be worth to pay attention in simplifying forecasting methods. This would enable practitioners to get more involved into the forecasting process and raise awareness of the corresponding limitations. Another aspect which could be covered by future research is concerned with Peisley’s (2008) question concerning the current level of growth and its sustainability in terms of market and profit growth. The results of the Delphi study support the validity and relevance of this question. How long will cruise companies are be able to offer these dumping prices and whilst remaining profitable with the help of on board revenue? This leads to monitoring the competition. Increasingly, floating destinations (the mega liners) are competing with destinations ashore (hotels, other holiday options). If the price is having such a big influence, competitors’ new pricing strategies would create totally new circumstances. Up to date, only 52

cruise operators are able to offer these low prices, due to the profits generated with on board revenue; especially which inexperienced passengers or first time cruisers who are not really aware of the ‘un-forecasted’ costs. A Delphi participant suggested a comparison between revenue generated on board during a sea day and the revenue generated in the city during a port day. The idea behind this would be to identify an additional source of income for cruise operators and shed some light into the competitive interface between land- and floating destinations. Offering cruise operators a margin of the additional revenue generated in the respective port city (‘off-board’ revenue), could for example alter the nature of competition between destinations and may even ease the mega-ship trend. An additional source of income might enable cruise companies to maintain low prices, generating more demand, filling the ships and maximizing occupancy.

3.7 References x

x x x

x x

x

x x x

Antonini, C. (2008). Cruise Ship Building. Personal Speech at the Seatrade Convention on March 12, 2008. Retrieved May 2009 from: http://event.on24.com/event/ 11/61/90/rt/1/ documents/player_docanchr_1/corrado_antonini_transcript_.pdf Ariston (2006). Europe: The Future is Now. Retrieved June 2009 from: http://www. worldcruise-network.com/features/feature617/ Armstrong, J. (1989). Combining Forecasts: The End of the Beginning or the Beginning of the End?. International Journal of Forecasting, 5 (4), 585-588 Burger, C. et al. (2001). A practitioners guide to time series methods for tourism demand forecasting – a case study of Durban, South Africa. Tourism Management, 22 (4), 403409 Chu, F. (2008). Analyzing and Forecasting Tourism Demand with ARAR Algorithm. Tourism management. 29, 1185-1196 Churchill, W. (n.d.). Famous Quotes. Retrieved June 2009 from: http://www.gprs-ratesblog. com/2008/05/28/do-not-trust-any-statistics-you-did-not-fake-yourself-winstonchurchill/ CLIA (2008). 2008 CLIA Cruise Market Overview - Statistical Cruise Industry Data Through 2007. Retrieved April 2009 from CLIA Homepage: http://www.cruising.org/ press/overview2008/ Cooper, C. & Hall, C. (2008). Contemporary Tourism – an international approach. Oxford: Elsevier: Butterworth-Heinemann Coshall, J. (2009). Combining Volatility and smoothing forecasts of UK demand for international tourism. Tourism Management. 30, 495-511. Dennis, J. (2008). UK Cruise Market to hit two Million Passengers by 2012. Retrieved April 2009, from Travel Weekly Homepage: http://www.travelweekly.co.uk/ Articles/2008/02/13/26646/uk-cruise-market-to-hit-two-million-passengers-by2012.html

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x x

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Faulkner, B. & Valerio, P. (1995). ‘An Integrative Approach to Tourism Demand Forecasting’, in Fredline et al (ed.) Progressing Tourism Research – Bill Faulkner. Clevedon: Channel View Publications Frechtling, D. (2002). Practical Tourism Demand Forecasting: Methods and Strategies. Oxford: Elsevier Butterworth-Heinemann Gregan-Paxton, J. et al. (2002). So that’s what it is: examining the impacts of analogy of consumers’ knowledge development for really new products. Psychology & Marketing. 19 (6), 533-550. Häder, M. & Häder S. (2000). Die Delphi-Technik in den Sozialwissenschaften. Methodische Forschungen und innovative Anwendungen. Wiesbaden: Westdeutscher Verlag. Retrieved: June 2009 from: http://www.qualitative-research.net/index.php/fqs/ article/viewArticle/901/1966 Korhonen- Yrjänheikki, K. (2004). Using Argument Delphi to Anticipate the Challenges of Egineering Education in a Systematic Way: Case Finland 2015. Presented at the SEFI 2004 Annual Congress. The Golden Opportunity for Engineering Education. Retrieved May 2009 from: http://www-ice.upc.es/butlleti/sefi/pdf/OUTLINES/78.SEFI04OUTLINE _KKY.pdf Makridakis, S. (1986). The Art and Science of Forecasting. International Journal of Forecasting, 2, 15-39 Medical Library Association (2005). Library as place: results of a delphi study. Retrieved May 2009 from: http://www.pubmedcentral.nih.gov/articlerender. fcgi?artid=1175798 Middleton, V.T.C. (1990). Marketing in Travel and Tourism. Oxford: Heinemann Neale, J. & Liebert, R. (1986). Science and Behavior: An Introduction to Methods of Research 3rd edition. New Jersey: Prentice-Hall International Editions Page, S. (2009). Tourism Management-Managing for Change 3rd edition. Oxford: Butterworth-Heinemann Peisley, T. (2006). The Future of Cruising- Boom or Bust. Tourism Management 29 (2008) 821-830 Shin, T. (2001).Delphi Study at the Multi-Country Level: Gains and Limitations. Retrieved June 2009 from: http://www.nistep.go.jp/achiev/ftx/eng/mat077e/html/ mat077he.html Skulmoski, G. et al., (2007). The Delphi method for Graduate Research. Journal of Information Technology Education, Volume 6. Retrieved June 2009 from: http://jite.org/documents/Vol6/ JITEv6p001-021Skulmoski212.pdf Song, H. & Li, G. (2007). Tourism demand modelling and forecasting – A review of recent research. Tourism Mangagement 29 (2008). P. 203-220 State of Victoria (2007). Delphi Study. Retrieved June 2009 from: http://www.dse.vic.gov.au/DSE/wcmn203.nsf/LinkView/D7B9E063A2B4FFAFCA25707E0 0248822EBB2EB2F9035229BCA257091000BF7A6 Vella, L. et al. (2008). Handbook on Tourism Forecasting Methodologies. Madrid: World Tourism Organization Walonik, D. (1993). An Overview of Forecasting Methodology. Retrieved May 2009 from: http://www.statpac.com/research-papers/forecasting.htm

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4.0

The Development and meaning of vessel flags in the cruise industry

Cordula Boy University of Applied Sciences Bremerhaven, Bremerhaven, Germany

Abstract At present, a significant amount of vessels engaged in international trade is flying flags of convenience (FOC), allowing ship operators better terms of competitiveness. This study examines the meaning of vessel flags and FOCs in particular in the specific context of the cruise industry. It investigates factors governing the choice of vessel flags while revealing the reasons behind major cruise lines’ flagging decisions. Building upon a comparative analysis of the development of registered ships per flag State in 1997 and 2008, findings were derived and assumptions tested with the help of interviews conducted with industry professionals. It was found out that the meaning of FOCs in the cruise industry is significant and further expected to increase. Flag States involved in the cruise ship flagging business are mainly found among the quality flags. Reasons behind this motivation are, next to acting responsibly, cruise lines’ own interests, comprising the fear of public pressure and negative press but also the interest of maintaining ship operations which both result in a high level of safety. Furthermore, it was revealed that there is a link between cruise lines’ corporate policy and the choice of vessel flag. However, the major factor in the choice of flag remains costs. cruise market. Keywords: Traditional cruises, consumer experience, sustainability.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_4, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

4.1 Introduction Liberia, Panama and the Bahamas are the countries most frequently found on the stern of ocean going ships. The reason for this is that many ships are flying a so called ‘flag of convenience’ (FOC). Cruise ships are no exception. They do so for specific reasons: cost savings (low registration fees, lower taxes and lower wages), lax safety and environmental regulations and the freedom to choose the nationality of their workforce. Compared to traditional ship registries safety standards are said to be lower and working conditions for crew are worse. The reputation of FOCs is rather negative due to their safety record. In 1998, FOCs accounted for 55% of the total number of ship losses and 66% of total tonnage lost while at the same time presenting 20% of the total number of ships and 47% of total tonnage (ITF cited in Alderton & Winchester, 2002). Being a topic of global concern, a lot has been written on vessel flags and FOCs in general, yet little is known about its meaning and implications for a very small but rapidly growing branch of the maritime industry: the cruise industry. In 2007, over 12 million passengers worldwide have booked a cruise; compared to 1990, this means a 7.4% annual growth rate (CLIA, 2007). Cruises are becoming more attractive to a larger group of people, as the product portfolio has broadened and cruise concepts have been developed for various preferences. At the same time cruises are becoming cheaper on average (The Passenger Shipping Association, 2009). This development can mainly be explained by two factors: the growing size of cruise ships, allowing economies of scale on the one hand, and the flagging of ships, which has been ‘outsourced’ to mainly developing countries, known as so called ‘flags of convenience’. In 1997, 62% of all cruise ships were flying an FOC which is considerably higher than the proportion in the shipping industry in general. In 2008, FOCs accounted for 33% of the number of ships in the global merchant fleet, while in the cruise industry the proportion increased to 66% (Flottenkommando, 2008). So obviously, FOCs seem to be of growing importance. Therefore implications of this system, particularly on the cruise market, are worth while studying, as also recent reports on exploitative conditions for seafarers on board cruise ships flying FOCs show. Furthermore, in the face of piracy the issue of safety on board, naval protection and the jurisdiction over vessels flying foreign flags has also come to the fore. While aiming at understanding the meaning of vessel flags and FOCs among them, this research paper primarily investigates what factors influence the choice of vessel flag in the specific context of the cruise industry. The first section of this paper provides background information on the context of vessel flags. The second segment introduces literature existing on this subject, followed by the third segment which focuses on the development of vessel registration in the cruise industry, in the time between 1997 and 2008. The fourth part aims to find out reasons behind this development and thus enables to infer to the meaning of vessel flags in the cruise industry and in particular, factors governing the choice of vessel flag. The final section comprises future implications and the conclusion of the findings, followed by the limitations of this study.

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4.1.1 The vessel flag The United Nations Convention on the Law of the Sea 1982 (UNCLOS) determines that every ship sailing the seas has to be assigned a nationality as stated in Article 91: “Every State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the State whose flag they are entitled to fly. There must be a genuine link between the State and the ship. (United Nations, 2001)” Every ship can be seen as a ‘floating piece of the country where it is registered’ (Wood, 2006, p. 400). Therefore the ship has to adhere to the laws of that particular country. The flag refers to the nationality of a ship and to the flag State where the ship is registered. Furthermore, in Article 92 it is articulated that a ship is ‘subject to its [flag State’s] exclusive jurisdiction on the high seas’. As stated in Article 91, a ‘genuine link’ is required between the flag and the ship. However, the nature of this link has not been specified. Additionally, no sanctions are defined in case of the absence of such a link either (Ready, 1998). Although this link is obvious in the case of national flagged ships of traditional flag States, the situation is different for foreign flagged ships. UNCLOS implies that the responsibility for the compliance of ships with international regulations rests with the flag State. Therefore, beside administrative duties, flag States are required to perform inspections on a regular basis, issuing and renewing certificates which state conformance with international accepted standards (UNCLOS, Article 94). Nowadays, there are four different categories of flag States: traditional registries (as e.g. the EU member States and Japan), dependent registries (former British colonies, as e.g. the Bahamas, Gibraltar or the Cayman Islands), second registries (e.g. NISR, GISR) and most relevant for this study, the category of open registries (or FOCs). As there are virtually no entry requirements, FOCs are also referred to as ‘open registries’. They were defined by the International Transport Workers’ Federation (ITF) in 1974 as: ‘Where beneficial ownership and control of a vessel is found to lie elsewhere than in the country of the flag the vessel is flying, the vessel is considered as sailing under a flag of convenience’. Currently there are 32 countries which

have been officially declared FOCs by the ITF. The list includes: Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda (UK), Bolivia, Burma, Cambodia, Cayman Islands, Comoros, Cyprus, Equatorial Guinea, French International Ship Register (FIS), German International Ship Register (GISR), Georgia, Gibraltar (UK), Honduras, Jamaica, Lebanon, Liberia, Malta, Marshall Islands (USA), Mauritius, Mongolia, Netherlands Antilles, North Korea, Panama, Sao Tome and Príncipe, St Vincent, Sri Lanka, Tonga and Vanuatu. (ITF, 2009) 4. Literature Review A lot has been written about vessel flags and FOCs in particular. Yet, research has virtually exclusively been concentrated on the maritime industry in general; only little exists with regard to vessel flags in the specific context of the cruise industry, albeit of major interest for this study. 4.1.2 Flag state reputation and enforcement As Hill (2003, p.20) notes: ‘“Flags of convenience” is a phrase which has fallen into disrepute politically’. Hence, various studies exist on the negative aspects of the system of open 59

registries. Skourtos (1990) for example claims that open registries do not perform sufficient supervision; some flag States were even missing controls at all which would result in a serious threat for ship, crew and the environment. Among the most relevant arguments against FOC are the difficulties to identify the real owner of a ship due to the abstruse structure governing the system of FOCs. It is argued that in such cases PSC is weaker as substandard ships can only be reported without any possible actions to be taken accordingly as the owner cannot be controlled. Finally, enforcement is said to be inconsistent because the majority of FOC States only aims at generating profit out of the flagging business without exercising control (Ready, 1998) what Chin calls the ‘commercialization of state sovereignty’ (2008, p. 7). However, Ready notes that this aspect is no longer applicable as a common characteristic of an FOC. Although this might have been true for the early beginnings of the FOC system, nowadays, most of the major open registries make an effort to ensure their compliance with international regulations, ‘particular in safety matters where port state control (PSC) is acting as a major disincentive to the retention by open registers of substandard tonnage under their fleet’ (Ready, 1998, p.18). Therefore it is no longer appropriate to generalize the performance of FOC States as pointed out by Alderton and Winchester (2002). They revealed that there are obvious differences between FOCs and traditional flags but similarly, also within the group of FOCs itself. Larger, established FOCs more and more comply with international standards, due to a more effective PSC (Alderton and Winchester, 2002). According to Bloor (2003) there is the widespread perception in the maritime industry that the problems of global governance are caused by an inadequate enforcement, instead of existing regulation being inadequate. He questions this view and points out a current regulation deficit concerning seafarers’ fatigue, addressing the labour aspect of FOC opposition. Chin (2008) highlights the lack of enforcement power of IMO and ILO. According to Hill (2003), the system of FOC will exist as long as international law allows flag States to determine the conditions under which it will grant ships to fly its flag. However, Ready (1998) claims that abolition of the system of open registries does not automatically lead to the elimination of substandard shipping. Conversely, he suggests that the ‘key to improving safety standards on FOC vessels is held by the consumers’ within the shipping industry itself (Ready, 1998, p.20). Ready (1998) states that whether a vessel might seem suitable for charterers (consumers) depends on its flag as many operators will register their ships in countries with a low detention rate to avoid continuous inspections. Therefore fewer PSC inspections are also seen as major incentive of pursuing quality ships (Witt, 2008). 4.1.3 Determinants of vessel flag Factors influencing the shipowners’ choice between an open and a traditional registry primarily comprise economic and political factors (Ready, 2008). Economic factors include tax related issues, annual and registration fees as well as operating costs, while political factors refer to naval protection, trade restrictions, the access to cabotage, easy entry, prestige and labour regulations (Chin, 2008; Dickinson & Vladimir, 2008; Hoffmann et al, 2005; Ready, 1998; Skourtos, 1990). Within the list of FOCs itself, other factors are determining the choice, as adopted from Ready (2008, p.55-59): x x 60

Vessel eligibility (vessel type, size and age) Costs (registration and annual fees)

x x x x x x x

Ownership restrictions (need of respective company to be incorporated in flag State) Labour problems (due to ITF campaign) Manning requirements and certification Accessibility and Administration Government stability Trading limits Flag State reputation

Yet much of the findings are related to the maritime industry as a whole. Therefore this study aims to find out whether there are any distinct factors additionally influencing the choice of flag in the cruise industry. Thus, literature on the cruise industry has been reviewed which refers to the vessel flag. 4.1.4 Vessel flags in the cruise industry Cartwright and Baird (1999) were among the first who mentioned implications of vessel flags in the cruise industry. Concerning the emergence of FOCs in the cruise industry, it is argued that traditional companies ‘clung to their national registration’ whereas new companies registered their ships under an FOC (Cartwright & Baird, 1999, p. 30). There was the general perception that FOC ships were less safe than traditional flagged vessels. Additionally, the differences in national willingness to cruise on foreign vessels are stated. It was found out that while US citizens do not seem to care whether they cruise on a foreign ship or not, UK residents strongly prefer to cruise on British flagged ships. However, it is argued that the vessel flag is not as relevant anymore as it has been before. (Cartwright & Baird, 1999) Concerning the meaning of FOCs in the cruise industry, Chin (2008) raises another issue: morality. Similar to Skourtos, she focuses on the ‘underside of loss and pain’ generated by the FOC system. This includes primarily low wages and long working hours under ‘exploitative conditions’. According to Chin, an average workday can be 12 to 16 hours, seven days a week. She claims that seafarers on board many FOC ships seeking union rights are blacklisted, making further employment virtually impossible. In case of crime or sexual harassment on board, virtually no one can be made responsible as the matter of jurisdiction is unclear due to the obfuscate structure enabled by the system of FOC. It is argued that open registries offer the ‘important minimal regulatory framework for cruise lines’ pursuit of profits at sea’ (p.11). Chin concludes that the problem is not that cruise lines pursue profits, but how profit is pursued. Therefore, to come back to the aspect of morality, she suggests that cruise lines reevaluate corporate conduct to moderate the underside of cruising. (Chin, 2008) As foreign flagged ships have access to a global workforce, they can save considerable sums regarding personnel costs. Spruyt calculated the costs of an Asian crew in comparison with a northern European crew on a 24-member ship; the difference amounted to 698,400$ annually (cited in Wood, 2006, p.401). Transferred to the context of the cruise industry where often 1,000 crew members work on board one single cruise ship, cost savings enabled by flying an FOC are tremendous. On the other side, Alderton and Winchester (2002) claim that the proportion of sunken ships registered in open registries is twice as high as for the rest of the global fleet. Yet, Wood (2006) states that ‘cruise ship and passenger safety is central to the industry’s marketing and profitability’ (p.402). This seems to be a key tension. 61

However, as Klein claims: “the [cruise] industry appears to be relatively effective in managing the media and influencing legislative processes” (2006, p. 387). The literature review revealed that the topic of vessel flags is very broad, having implications for several fields of the shipping industry. The reputation of vessel flags was investigated and it was found out that although the general reputation of FOCs is negative, differences within this system exist. A general problem of enforcement in the global shipping sector can be observed, dominated by the minimal regulatory framework and the non-ratification of conventions by a majority of open registries. Vessel determinants mainly comprise economic factors but also political factors play a role. Furthermore, it was stated that obviously, ship and passenger safety is crucial and thus, might also influence the choice of flag. This is what this study wants to build on. It aims at investigating whether cruise companies are influenced by additional factors governing the choice of flag.

4.2 Methodology The applied research methodology is a combination of secondary and primary research techniques. At the beginning, secondary research was undertaken to understand the context of vessel flags in the cruise industry as well as the complexity and relationships between the forces acting in the maritime industry which have an influence on the flag a ship is flying. Additionally, quantitative data was collected from secondary resources in order to allow analysis of the development of registered cruise ships per flag State as well as the factors influencing the choice of flag in the particular context of the cruise industry. For collecting the required quantitative data on cruise ships and their corresponding flag State, Douglas Ward’s ‘Complete Guide to Cruises and Cruise Ships’ was used. This process was necessary as no such detailed list was accessible elsewhere. The obtained quantitative data was used to create statistics and diagrams which were evaluated subsequently. To allow comparison, data from two different editions was extracted, from the 1997 edition as well as from 2008. This facilitated a thorough analysis of the development of the various flag States over an 11 year period from which several findings could be derived. These findings led to a hypothesis, which was subsequently tested in the qualitative research part. To obtain the qualitative data, primary research was undertaken. It was aimed at understanding the development process as well as to confirm or reject the findings of the previous search of literature and quantitative data analysis. Thus, it was decided to conduct qualitative, semi-structured interviews, the most applicable data collection method considering the exploratory nature of this study. It aimed at understanding the reasons behind the development of flag States in the cruise industry, next to factors governing the choice of respective vessel flag. The interviews were conducted on a one-to-one basis. A total of three experts were interviewed, all of them either being employed in the maritime industry or directly in the cruise industry. Subsequently, the qualitative interviews were analyzed with regard to the hypothesis.

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4.3 Results & discussion 4.3.1 Findings of quantitative research Development of flag state registration in the cruise industry According to Ward (1997) a total of 208 cruise ships, registered in 25 different flags States were represented in 1997. Figure 4a illustrates their distribution among flag States. In 1997, the Bahamas, Liberia and Panama were the top three in the cruise ship flagging business, controlling together more than 50% of total cruise ship capacity. The Bahamas were leading with 24%, which results in a total number of 50 cruise ships, Liberia accounted for 20% (42 vessels) and a total of 18 cruise ships (8%) were flying the Panamanian flag. Norway closely follows with 17 cruise vessels, also resulting in a share of 8%. To outline the overall significance of FOC in the cruise industry, the percentage sailing under FOCs has been calculated: when referring to what the ITF identified as FOC, in 1997 a total of 128 vessels of the cruise fleet were flying the flag of an open registry, which results in a percentage of 62.

Distribution of Registered Cruise Ships per Flag State (1997) others 19%

Bahamas 24%

Italy 3% Ukraine 4% Great Britain 4% Russia 5% Liberia 20%

Greece 5% Norway 8%

Panama 8%

Figure 4a: Proportion of Registered Cruise Ships per Flag State, 1997 In 2008, a total of 280 cruise ships were sailing the seas, flying the flags of 27 different nations (Ward, 2008). As figure 4b indicates, the Bahamas are still heading the statistic with a percentage of 36. They even strengthened their position by registering additional 50 ships, resulting in 100 ships flying their flag in 2008.

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Distribution of Registered Cruise Ships per Flag State (2008) others 19%

Bahamas 36%

Greece 2% Cyprus 2% Great Britain 4% Netherlands 5% USA 6% Bermuda 6%

Italy 8%

Panama 12%

Figure 4b: Proportion of Registered Cruise Ships per Flag State, 2008 Panama has become the number two with 12% (33 cruise ships), followed by Italy (8%, 23 registered cruise vessels) which again is closely followed by the USA and the Bermuda. The latter one has tremendously gained in popularity and increased its cruise fleet from one single cruise ships in 1997 to 18 in 2008. In the same year the top three flag States account for 56%, signifying an increase which means that their dominant position in the cruise flagging business has been extended. Further analysis implies that this dominance is related to the dominance of the ‘big three’ cruise lines: Carnival Corporation, Royal Caribbean Cruises Ltd. and Star Cruises, together controlling 80% of the world cruise market in terms of bookings (Wood, 2006). When having a closer look at which cruise lines are behind the flag States, it can be observed that the big three cruise lines have registered their vessels in one or more of the top three flag States (figures 4c-4e).

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Star Cruises according to Flag States (2008) USA; 3

Bahamas; 7

Panama; 8

Figure 4c: Star Cruises according to Flag States (2008)

Royal Caribbean Cruises Ltd. according to Flag States (2008) Malta; 1 Liberia; 1

Spain; 2

Bahamas; 32

Figure 4d: Royal Caribbean Cruises Ltd. according to Flag States (2008)

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Carnival Cooperation according to Flag States (2008) Bahamas; 13

Panama; 16

Bermuda; 16 Netherlands; 13

Gibraltar; 2 Great Britain; 9

Italy; 18

Figure 4e: Carnival Cooperation according to Flag States It can be deduced that the dominance of the big three in the cruise market in terms of bookings is reflected in the cruise flagging business in terms of the number of registered ships. Additionally, when examining the composition of involved flag States of a cruise company, much can be said about the nature of the corporation and its history, as e.g. in case of Carnival and its consolidated brand portfolio.

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Flag State

1997

2008

Change in %

Bahamas Bermuda British Virgin Islands Cyprus Dutch Antilles Ecuador Equatorial Guinea Finland France Germany Gibraltar Great Britain Greece Honduras Italy Japan

50 1 1 5 3 0 0 2 1 5 0 8 10 1 6 5

100 18 0 7 1 1 4 1 1 1 2 12 6 0 23 4

+100 +1700 -100 +40 -67 new new -50 0 -80 new +50 -40 -100 +281 -20

Liberia Luxembourg Madeira Malta Marshall Islands Mauritius Netherlands Norway Panama Russia Scotland Spain St.Vincent/Grenadines Thailand Ukraine USA Wales Wallis & Fortuna unknown

42 2 0 2 0 0 0 17 18 10 1 0 0 1 8 4 1 1 3

3 3 4 5 5 2 13 0 33 5 0 3 3 0 0 16 0 3 1

-93 +50 new +150 new new new -100 +81 -50 -100 new new -100 -100 +300 -100 +200 -67

Table 4a: Overview of Development per Flag State Analyzing again the proportion of cruise ships sailing under an FOC, a slight increase can be observed. In 2008, 66% are registered in FOC countries. This means FOC States account for two thirds of the whole cruise fleet. When comparing the composition of the cruise flagging business in 1997 and 2008, one can observe significant changes. The overall proportion of cruise ships registered in FOC States has increased by 4% in the time from 1997 and 2008, with today, two thirds flying the flag of an open registry. Table 4a states the development of each flag State in absolute numbers and gives the percentage change in the number of registered cruise ships within the 11 year time frame. Table 4b summarizes the findings derived from the analysis of the quantitative data for the cruise industry as a whole.

# Cruise Vessels % of FOC Total Capacity Average Capacity/ship Total Gross tonnage Average tonnage # Flag States

1997 208 62% 165.455 795 5.620.559 GT 27.022 GT 25

2008 280 66% 352.650 1.259 13.570.150 GT 48.123 GT 27

Change in % 34.6 4 111.1 58.4 141.4 78.1 8

Table 4b: Summary of Changes in the Cruise Industry

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To summarize the findings of the quantitative research it can be concluded that the most noticeable developments are the following: x x x x x x x

increase of total cruise ships on the market increasing ship size link between big ships and “young” fleet cruise ship flagging business is dominated by three leading flag States, responsible for more than half of the cruise ship fleet every cruise line has one or a few characteristical flag States most popular flag States are FOC FOC further on the rise, traditional flag States leaving the business (with a few exemptions: Great Britain, Italy and USA)

Comparison to global merchant fleet To see the results of the previous analysis of the cruise industry in context, the distribution of the global merchant fleet to various flag States has equally been analysed. Panama takes the role of the leading flag State in terms of number of registered ships regardless vessel type, controlling 14% of the global merchant fleet, followed by Japan (6%) and China with 5% (Flottenkommando, 2008). Remarkable when having the proportions of flag States in the cruise industry in mind, is the dense succession of the number of registered vessels per flag State. Apart from the leading flag State Panama, only marginal differences between flags can be observed. Furthermore, there are more than 150 flag States in total involved in the global flagging business (Witt, 2007), about five times more than the number of flag States in the cruise industry. Although the proportion of cruise ships in the world merchant fleet is likewise comparatively low, this suggests that there are particular flag States that seem to be attractive to the cruise industry. Regarding the global merchant fleet, the top three flag States account for a quarter of ship registration, which is significantly lower than in the cruise industry where the percentages of top three amounted to 56% in the same year (2008). Considering the role of FOCs in the global merchant fleet, it is interesting that, although playing a major role in ship registration in general, their importance is not as remarkable as the situation on the cruise market showed. While 33% of the global fleet is flying an FOC, in the cruise industry this number amounts to 66%. However, it has to be noted, that the data used for figure 4f is based on the registered number of ships per flag State, to allow comparability with the situation on the cruise flagging business. Usually, statistics regarding flag States in the merchant fleet are based on the proportion of registered tonnage per flag State as more appropriate for cargo shipping. Referring to tonnage, Panama, Liberia, Greece, Hongkong and the Marshall Islands form the leading five flag States in the global merchant fleet. Based on tonnage calculations, the proportion of vessels, flying an FOC in 2008, amounts to slightly more than 50% of the global merchant fleet (Flottenkommando, 2008). The comparison with the distribution of flag States in the global merchant fleet has highlighted two important aspects: first, the importance of FOC in the cruise industry seems to be higher than for the global fleet in general. 68

The Biggest Merchant Fleets by Flag (2008) Panama 14% Japan 6%

China 5% others: 51% Liberia 5% Indonesia 4% Malta 3% Singapore 3% Hongkong 3%

Russia 3% Bahamas 3%

Figure 4f: Distribution of the Global Merchant Fleet (>300GRT) according to Flag State (2008) While two thirds of the cruise fleet is sailing under an FOC, FOCs only amount for one third in the global fleet (based on number of vessel calculations). Secondly, more than 150 flag States are present in the global merchant fleet, while just a few dominate the whole cruise industry. This suggests that the cruise ship flagging business is specialized, with some flag States offering seemingly attractive conditions for cruise companies as not all of those cruise flag States are also among the leading flag States in the whole maritime industry. Top performing flag states in the cruise industry This part aims to investigate the performance of the flag States involved in the cruise industry, based on the situation in 2008. In this regard, the “BGW” list of the Paris MoU on Port State Control was used. The analysis reveals that the broad majority of flag States having a stake in the cruise industry is positioned on the white list, while two flag States, the USA and the Dutch Antilles are listed on the grey list and another two, St. Vincent and the Grenadines as well as Panama are to be found on the black list. So generally, it seems that cruise ship flags are performing well. However, the placement of Panama, being number two in terms of registered cruise ships, on the black list, is remarkable. Conclusion of quantitative analysis Each part of the analysis of the quantitative data has lead to certain findings describing the importance and characteristics of vessel flags in the cruise industry. The most important findings on the cruise ship flagging business are the following:

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x x x x x

Three leading FOCs dominate the business: responsible for more than half of the cruise ship fleet. FOC further on the rise, traditional flag States leaving the business (with a few exemptions: Great Britain, Italy and USA) The importance of FOC is higher in the cruise industry than for shipping sector in general. There are cruise specific flags. Flag States involved in the cruise industry are primarily quality flags.

Based on the last finding following hypothesis was formed: Cruise companies choose well performing flag States due to the intention of the cruise companies to have diligent controls. Whether this hypothesis is applicable, the following qualitative analysis found out. 4.3.2 Findings of Qualitative Research The underlying assumption of this paper is closely linked to the various factors governing the choice of vessel flag. It needs to be investigated, why cruise companies decide for specific and in particular well performing vessel flags. Although literature provides factors determining the choice of vessel flag for the whole maritime industry, this study found out that regarding the cruise industry, a few more factors have to be taken into account. Determinant 1: Cost savings emanating from labour regulation It was found out that the cost factor is of prime importance for cruise companies regarding the choice of vessel flag. Although this seems quite plausible it has to be emphasized that its meaning is much higher for cruise ships than for the rest of the global fleet. Cruise ships are facing vast additional amounts of operating costs, relative to cargo ships, especially when it comes to manning. Flying an FOC implies that also non-nationals, seafarers from ‘low wages countries’ are allowed to work on board. It was argued in one of the interviews that reflagging a 300-crew cruise ship from a traditional to the Bahamian register should ‘lead to cost savings of about 1.5million DM, annually’. Similarly, it was claimed that a Filipino in the decks department costs ‘a third of what a German costs’. So considering that nowadays, a cruise ship has up to 1,000 crew members, the ‘cost pressure is immense’. Moreover, the importance of cost savings is expected to further increase, as noted by Chin (2008): cruise ships are getting bigger and bigger which implies that more crew is needed. Therefore manning costs increase and thus, also does the meaning of FOCs, particularly in the mass cruise market in which major cruise lines are involved. As the choice of flag is made by ‘business people, they do not care whether you as crew feel well onboard’, only costs are decisive. Determinant 2: Link between safety standard and choice of vessel flag In literature it is often stated that FOCs are attractive to some shipowners due to lax safety, labour and environmental regulations. Though the aspect of avoiding strict labour regulation certainly applies in the cruise industry, the opposite is true for safety regulations, for the following reasons: 70

First, PSC pays special attention to passenger ships which increases the likelihood of being subject to an inspection. This forces the cruise companies to strictly adhere to standards at all times, unless they want to risk detention, which would disturb the course of the cruise planning and much more important, create bad press. Similarly, a cruise company has an ‘immense interest itself’ in the smooth running of its vessel, as a ‘cruise already requires a certain level of technical support’. Second, owners of most cruise ships are known, unlike owners of many cargo ships. Therefore, in case of any incident, the owner can be held accountable and has to deal with the consequences. In such cases ‘it is always the name of the ship and the name of the cruise operator which are made accountable’ and published in press. To avoid bad press and thus, ‘getting into trouble’, major cruise companies strictly adhere to safety standards. This attitude is strengthened by primarily choosing well performing flag States. These quality flags also exist within flag States labelled FOC by the ITF. It was stated that the Bahamas cannot be seen on one level with other flag States as e.g. Lebanon, as there are significant differences among FOCs. According to Alderton and Winchester (2002), established FOC more and more comply with international standards, due to a more effective PSC. These ‘established FOCs’ are exactly those involved in the cruise industry. Therefore, the safety standard of currently operating cruise ships is ‘comparatively high’. Poor performing flag States, as identified by PSC, are having a bad reputation and thus, are usually avoided by (major) cruise lines because they do not want to foster negative associations with passengers and as mentioned before: compliance with international safety standards is ‘in the interest of the passengers, the crew and ship but also in the interest of my company, due to my reputation’. So third, as cruise companies mainly decide for quality flags within FOCs, they are also forced to comply, because flag State responsibilities are taken seriously; moreover, cruise companies nowadays bear the responsibilities for the lives of several thousand people. Therefore, even cruise ships flying the flag of generally poor performing flag States as e.g. Panama will strictly comply with safety regulations. Thus, it is an interplay of willingness and pressure. Hence, a link between the choice of vessel flag and safety standard on board exists. Given these three aspects cruise lines have realized that there is no sense in avoiding safety regulations. Determinant 3: Corporate Policy Furthermore, it was revealed that the flagging decision and the corresponding safety standard on board are also linked to the company’s corporate policy. Relevant factors regarding corporate policy comprise, as stated by the interviewees: x x x x

Product and price segment Company structure Existing fleet/ company portfolio Route

Corporate structure in combination with the existing fleet plays a major role. Furthermore, the routing of cruise ships is an additional determinant in special cases as the example of NCL America shows. Finally, of major influence is also the corporate philosophy, linked to the ‘cruise product’ and chosen price segment. Some renowned cruise companies ‘take good care of their reputation’ and therefore, have an interest in keeping standards high to protect 71

their reputation. When entering the market with a ‘high quality product’, companies care about reputation and safety standard. However they also have much more money to hand for investing in a high standard. Conversely, when companies are following a low price strategy companies will have to cut costs and save money wherever possible, therefore all that counts is cost. Although it seems that the flag does not directly influence the cruise product, implications for crew are significant. When the new EUROPA (VI) of Hapag Lloyd Cruises was introduced to the market it was decided for the Bahamian flag. The old EUROPA (V) was flying the German flag and crew had German contracts. Even though flying an FOC, the ‘new’ EUROPA has been chosen ‘best cruise ship of the world’ for many years (Ward, 2008). Just a few passengers claimed they would stop sailing when the ship was registered under an FOC. So obviously, there were no negative implications apart from a few guest complaints. However, implications for crew were more significant. Existing German contracts were terminated (except for a few who went to court); instead, new ones were made, no longer depending on German law, thus social protection was no longer included in contracts. So although there were virtually no visible changes for passengers except for a different flag flying from the stern of the ship, crew conditions changed, as the company decided to cut costs. Hence, as illustrated, the ‘loss of image is probably lower than what can be saved flying the flag of the Bahamas or Liberia’. 4.3.3 Conclusion: ‘Cruise companies have an immense interest themselves’ To sum it up: ‘every shipping company is doing what it is forced to do’. Therefore it can be concluded that the flag is primarily chosen according to costs. Moreover, this study revealed that there is also a link between vessel flag and corporate policy which is reflected in the choice of flag. However, the avoidance of safety standards is not a determinant; conversely, quality flags are chosen in order to maintain a high safety standard, as cruise companies have realized, that it is a necessity to keep operations running. Therefore, the cruise lines’ sense of responsibility is not the only motivation for responsible acting. The hypothesis applies- yet, with an important extension: Cruise companies choose quality flag States due to the intention to have diligent controls which maintain a high safety standard. This is primarily based on own interests: to keep the operation running as well as to protect their reputation in order to maintain a good image with guests.

4.4 Future implications The importance of FOCs are further expected to increase due to ships becoming bigger on average, therefore more crew is needed which will again increase the need for cost savings. In this study it has been found out, that the safety standard on major cruise ships is comparatively high, as cruise lines seem to be forced to comply with international regulation, regardless of the minimal regulatory framework in many FOC States. However, the less visible side enabled by the system of FOC, the absence of labour regulation, leading to ‘exploitative conditions’ for seafarers on board cruise ships, is fully taken advantage of. Using the insights of this study could help to indicate ways to improve the general situation. In addition to adopting further conventions, it should not be neglected that the ‘key to 72

improving safety standards on flag of convenience vessels is held by the consumers within the shipping industry itself’ (Ready, 1998, p.20). Therefore ways need to be found that make cruise companies realize that there is no other way than to keep labour standards high and fulfil Chin’s (2008) demand of re-evaluating corporate conduct of how profits are pursued.

4.5 Conclusion This study investigated the meaning of vessel flags, with a particular regard to open registries, in the specific context of the cruise industry. In the course of the research literature on this issue has been reviewed which identified a gap when it comes to factors governing the choice of vessel flag in the cruise industry. This study aimed to close this gap. Based on the analysis of the development in the cruise flagging business over the past few years, several findings could be derived. It was found out that the meaning of FOCs in the cruise industry is significant. In 2008, two third of the cruise ship fleet was flying an FOC, dominated by a few flag States, reflecting the situation on the global cruise market. Out of 27 flag States, the top three control 56% of the cruise ship fleet. For many years in the shipping industry, flying an FOC indicated the avoidance of safety regulations on the side of the shipowner; however, this does not apply to the cruise industry. Although most cruise ships are flying FOCs, cruise lines generally conform to international safety standards. Further analysis revealed that those flag States involved in the cruise ship flagging business are mainly found among the quality flags. By interviewing industry professionals, it was found out that the reason for this motivation lays in the cruise companies’ own interests. Quality flags imply high safety standards. So when deciding for a quality flag, on the one hand ship operation, which already requires a certain level of ship maintenance, is secured. On the other hand there is the fear of bad publicity as in case of non-compliance to safety regulation, reputation would suffer. Furthermore, it was found out that there is also a clear link between cruise lines’ corporate policy and safety standard, maintained on board cruise ships, which is reflected in the choice of vessel flag. Next to acting responsibly when carrying several thousand people on board, own interests primarily determine cruise lines’ choice for quality flags. It is concluded that in general cruise lines only do what they are forced to do. As they are forced to comply with safety standards in order to protect their reputation and enable operation, mainly quality flags are chosen. To sum it up: the meaning of FOCs in the cruise industry is significant. It is higher than for the rest of the global merchant fleet. It seems that flying an FOC is the optimal solution for cruise ships as it is economically seen the only viable option, while at the same time, negative aspects combined with a FOC seem to be minimal, as safety standards have increased. Guests do not seem to bother. On the contrary, they benefit from low prices. FOCs are what ‘makes it possible… to offer cruises at a much lower cost’ (Dickinson & Vladimir, 2008, p. 64). The system of FOCs has made cruising affordable for a broad mass and is the basis for the annual growth on the cruise market which could be observed in the past years. Hence, the industry in its present shape depends on this system as eliminating FOCs ‘would be financially devastating to the cruise industry’ (Schulkin cited in Wood, 2006, p.402). These important insights could also be used to improve also other aspects of shipping, as e.g. the working and living conditions of seafarers but also better environmental protection 73

of the oceans as it starts at the roots of corporate conduct where regulation and its enforcement have no direct access to. 4.5.1 Limitations This research paper underlies some limitations. The secondary data used in this project has not been collected by the researcher herself but is extracted from Ward’s ‘Complete Guide to Cruises & Cruise Ships’. Therefore it relies on its correctness. As only cruise ships rated by Ward are included in his yearly editions, it might not give the complete picture of the cruise industry because not every single cruise ship on the market is included. Due to the financial limitations of the researcher, other data could not be obtained. However, as Ward’s cruise guide is being published annually for more than 24 years now, it seems reliable. Furthermore, due to time constraints, only a number of three interviews with industry professionals could be conducted. Yet, all of the three interviews were data intensive and therefore provided a sufficient basis to work on. 4.5.2 Further research This research paper only focused on a small area within the broad field of vessel flags and its implications, leaving room for further research. A ship’s flag could become strategically important for cruise companies, particularly, if public awareness rose and eventually even be used for marketing purposes. An interesting research question would be what exactly cruise passengers or potential guests know about the vessel flag and its meaning and whether increased awareness or knowledge of the flag would influence their booking behaviour. Another aspect allowing further research is crew conditions on board of various foreign flagged ships. FOC States are said to operate lower standard ships and to provide bad working conditions for crew. How true is this bad reputation for cruise ships regarding crew? It could be analyzed whether there are any noticeable differences between cruise ships flying traditional flags and cruise ships registered in FOC States. Endnotes: 1 Citations in this paragraph were taken out of the interviews, if not otherwise stated

4.6 References x x x x x

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Alderton, T., & Winchester, N. (2002). Globalisation and de-regulation in the maritime industry. In Marine Policy 26 (pp. 35-43). Elsevier Science Ltd. Bloor, M. (2003). Problems of Global Governance: Port State Control and ILO Conventions. SIRC Symposium 2003 (pp. 9-23). Cardiff: Cardiff University. Cartwright, R., & Baird, C. (1999). The Development and Growth of the Cruise Indusrty. Oxford: Butterworth-Heinemann. Chin, C. B. (2008). Cruising in the Global Economy. Aldershot: Ashgate Publishing Limited. CLIA. (2007). 2008 CLIA Cruise Market Overview: Statistical Cruise Industry Data Through 2007. Fort Lauderdale: Cruise Lines International, Inc.

x x x x

x x x x x

x

x x x x x x x

x x x x

Dickinson, B., & Vladimir, A. (2008). Selling the Sea - An Inside Look at the Cruise Industry (2nd edition). New Jersey: John Wiley & Sons Inc. Flottenkommando. (2008). Jahresbericht 2008 - Fakten und Zahlen zur maritimen Abhängigkeit der Bundesrepublik Deutschland- 21.Auflage. Glücksburg: Marine. Hill, C. (2003). Maritime Law (6th edition). London: LLP. Hoffmann, J., Sanchez, R. J., & Talley, W. K. (2005). Determinants of Vessel Flag. In Shiping Economics - Research in Transportation Economics, Volume 12 (pp. 173-219). Elsevier Ltd. International Maritime Organisation (2002), Conventions. Retrieved June 24th, 2009 from http://www.imo.org/Conventions/index.asp?topic_id=148 International Transport Workers’ Federation (2009), Flag of Convenience Campaign. Retrieved June 23rd 2009 from http://www.itfglobal.org/flags-convenience/index.cfm International Transport Workers’ Federation (2009), What is the ITF?. Retrieved June 23rd, 2009 from http://www.itfglobal.org/about-us/whatis.cfm Klein, R. A. (2006). Troubled Ses: Social Activism and the Cruise Industry. In R. K. Dowling, Cruise Ship Tourism (pp. 377-388). Wallingford: CABI International. Knapp, S., & Franses, P. H. (2009, March). Does ratification matter and do major conventions improve safety and decrease pollution in shipping? Marine Policy (33) , pp. 826-846. Mathisen, O. (2006). Corporate Social Responsibility (CSR) has Multiple Bottom Line: Profitability, Environment, and Social Equity. Cruise Industry News Quarterly - No.67 (Winter 2006/2007), pp. 18-23. Paris MoU on Port State Control. (2008). Annaul Report 2007. LR The Hague: Paris Memorandum of Understanding on Port State Control. Paris MoU on Port State Control. (1998). Annual Report 1997. LR The Hague: Paris Memorandum of Understanding on Port State Control. Paris MoU on Port State Control. (2009). Annual Report 2008- Making Headway. LR The Hague: Paris Memorandum of Understanding on Port State Control. Ready, N. P. (1998). Ship Registration - Third Edition. London: LLP. Skourtos, D. j. (1990). Die Billig-Flaggen-Praxis und die staatliche Flaggenverleihungsfreiheit. Köln: Carl Heymanns Verlag KG. The Passenger Shipping Association. (2009). The Annual Cruise Review 2008. London: The Passenger Shipping Association. United Nations (2001), United Nations Convention on the Law of the Sea 1982. Retrieved July 7th, 2009 from http://www.un.org/Depts/los/convention_agreements/ texts/unclos/closindx.htm Ward, D. (2008). Complete Guide to Cruises & Cruise Ships 2008. Princeton, N.J.: Berlitz Publishing Company Inc. Ward, D. (1997). Handbuch zu Kreuzfahrten und Kreuzfahrtschiffen. Princeton, N.J.: Berlitz Publishing Company Inc. Witt, J.-A. (2007). Obligations and Control of Flag States- Developments and Perspectives in International and EU Law. Berlin: LIT. Wood, R. E. (2006). Cruise Tourism: A Paradigmatic Case of Globalization? In R. K. Dowling, Cruise Ship Tourism (pp. 397-406). Wallingford: CAB International.

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PART B:Destinations & Sustainability

5.0

Consumer behaviour in the traditional cruise market and implications for the sustainability of ocean cruising

Martin Cholwill School of Tourism and Hospitality Plymouth Business School University of Plymouth Plymouth, UK

Abstract The importance of the traditional cruise consumer behaviour forms the frame of this work. In taking a developmental perspective this provides an innovative insight into the cruise concept to evaluate how the traditional cruise market consumer experience is being re-shaped. The globalised spread of the industry and aspects of environmental and social responsibility are examined. The significance of the traditional cruise market in relation to demographics is considered. Conclusions are drawn suggesting reasons why these elements may prove important to sustainability of the traditional cruise market. Keywords: Traditional cruises, consumer experience, sustainability.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_5, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

5.1 Introduction The aim of this chapter is to assess what factors associated with re-shaping the cruise experience are likely to affect the consumer behaviour and sustainability of the traditional cruise market. The traditional cruise market as considered in relation to this study encompasses a style of cruising comprised of experiences historically associated with sea travel. This type of cruise has particular, although not exclusive, appeal to the senior demography and this aspect is reviewed. The behaviour of consumers of the traditional cruise product and particularly those within the senior sector has particular significance in relation to the sustainability of this style of cruising. In order to investigate the consumer behaviour of the traditional cruise market it is necessary to define the constituent parts of the topic. Consumer behaviour comprises: ‘the buying units and the exchange processes involved in acquiring, consuming, and disposing of goods, services, experiences and ideas’ (Mowen 1995:5). The concept of consumer behaviour is a relatively young discipline but is particularly important to enable understanding of the stimuli for customer demand for cruise products. These may include elements such as brand loyalty which may have for example, resulted from a product having an association with ethical trading standards. Companies are mindful that branding is a significant factor in influencing consumer choice as it may signify the quality standard implied as being embedded in the product offering. Some consumers may be looking for social meaning encapsulated by the brand which could for example, in relation to the cruise product indicate informal, casual or formal style cruising (de Chernatony and McDonald 1998). The importance of the brand, and significantly the ethics behind, it can make or break a company should consumers take a particular and opposing view (Olins 2004). As consumer behaviour is a dynamic topic (Block and Roering 1979), consequently, it is important to understand the historiographic social, psychological and economic factors involved. (Antonides and van Raaij 1998). Consumer behaviour provides the framework for this study because when considered together with how products are currently marketed it provides a window on present and potential demand for the traditional cruise product. Marketing can be considered an exchange process. It encompasses the ‘process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services’ leading to satisfactory exchanges in meeting organisational or individual requirements (Hoffman et al 2003:9). Conceptual aspects of marketing are ‘needs’ and ‘wants, with respect to human requirements (Jefkins 1993:5). Needs may be defined as life staples such as food and shelter whereas wants comprise goods or services which are dependent on demand (Jefkins 1993). Wants can become ‘demands’ dependent on consumer resources (Armstrong and Kotler 2000:5). Goods comprise commodities or raw materials and are therefore considered tangible or physical items. Services are more usually considered as a sector which offers intangible value tailored to consumer demand. In their work titled ‘The Experience Economy’ Pine and Gilmore (1999) suggest that customized service has moved to a different sphere and resulted in an experience dimension within which companies’ stage or need to dramatize offerings in order to gratify consumers. The theatrical stage is used to illustrate the Pine and Gilmore view and in this way draws a parallel with sociologist Erving Goffman’s (1959) work later developed by MacCannell (1999:91) as ‘staged authenticity.’ Hospitality 80

services on a cruise ship could be seen as an example of where a company offers a series of staged memorable events creating in the process experiences purchased by the consumer. In creating these events the hospitality and entertainment staff effectively comprise a constituent part of the cruise product (Crang 1997). Their actions are scripted to deliver homogenised offerings via standardised routines not unlike the sociological concept of mass tourism product consumption represented by Fordism (Slattery 2003; Shaw and Williams 2004). Many of the activities, including the way food is offered and delivered in non-formal dining areas on modern cruise ships, can be likened to the phenomenon of ‘McDonaldisation’ suggested by Ritzer (2000). McDonaldisation represents a switch from mass-production in a manufacturing sense to symbolising a modern consumptive process which has global spread. This form of mass consumption has been called ‘neo-Fordism’ as it represents more flexibility within the product offering but this is contained within an otherwise calculable package (Shaw and Williams 2004). It is not clear if this form of cruise product consumption is universally welcome across a wide demography and this work investigates what may be the likely wants and needs of traditional cruise market consumers.

5.2 Traditional cruise market consumers Traditional cruise market consumers’ knowledge of the product may be based on an image placed in their minds through marketing promotion, past experience or opinions of others. It may be viewed by some as a way of fulfilling spiritual needs. Urry (2002) argues that (if) ‘contemporary consumerism involves imaginative pleasure seeking…tourism necessarily involves daydreaming and anticipating a new experience.’ The vision of a cruise is attractive to many as being escapist and offering a licence to relax, self-actualise and be part of a commune ‘something akin to a children’s camp - an environment in which play thrives’ (Dann 1996:118). However, the concept of what can be considered ‘play’ is likely to vary by age and social group. The trend towards building larger cruise ships has presented issues relating to the traditional cruise market which will be considered in this study. Traditional cruise ships tend to be older, smaller vessels which are often chartered, having been formerly operated by large cruise corporations such as Royal Caribbean International, and often presented as a classic alternative to the modern ‘mega-ships.’ Smaller ships remain popular with senior, often well educated and more affluent groups, because they are more likely to engender a closer community atmosphere than larger more impersonal vessels (Foster 1986). In some cases larger vessels operated by cruise corporation companies may include service elements with nostalgic connotations designed to appeal to those preferring a traditional cruise experience. An example of this is Cunard Line’s ‘White Star Service’ which incorporates a quintessentially British tradition of taking afternoon tea served by white gloved waiters (Cunard 2009). Service encounters such as those between waiter and passenger demand an additional dimension, that of expressing emotions expected by the customer. This has been defined as ‘emotional labour’ and requires the server to deliver a performance specific to the type of encounter (Lovelock 1995: 214). Encounters could be ‘nonverbal…the significant acts exchanged can be gestures’ (Goffman 1963: 90). Effectively the consumer expects certain behaviours in the encounter and an exchange or demand for a service can be conducted without words. An example would be a waiter who is familiar with a particular passenger’s drinks preference responding to the lifting of a glass by bringing a refill without discourse.

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Cunard, part of the North American Carnival corporation, do not underestimate these emotional encounters. In what it terms a ‘cornerstone statement’ it outlines the importance to the company reputation of face to face encounters between staff and passengers. As part of the ‘12 points of White Star service’ it states: ‘we smile, we are always in the spotlight…we use correct body language…we exceed our guests’ expectations’ (Cunard 2009). The acknowledgement by a large cruise company of traditional practices is in line with that company’s focussed marketing promotion of ‘The Timeless Cunard Legacy’ (Cunard 2000). It does however, contrast to other less traditional service offerings by the same company which include casinos, fitness suites and other modern facilities all of which are operated in a very similar way to those offered by other cruise lines. The subsuming of a tradition within the framework of a modern mega-ship highlights that these staged inauthentic reflections of traditional cruising are merely marketing promotional by-products designed to sell an experience illusion (MacCannell 1999). However, promoting a certain traditional style of service which evokes feelings of nostalgia can offer appeal, particularly to brand loyal consumers, many of whom are likely to be within the senior age sector. Whilst nostalgia may not be limited to a particular demography it has associations with a longing for what is perceived to have been lost or may be destroyed or rendered obsolete (Crang 1997). An example of this was the announcement of the closure of a cruise company, Swan Hellenic in 2007. The news caused an outrage and an outpouring of emotional comment from brand loyalists (The Oldie Annual 2008). Ships have often stirred emotions and are usually referred to as ‘she,’ a title which humanises a product formed from inanimate raw materials. The cruise liner QE2, now retired, is an example of emotional attachment of this kind. Following withdrawal from service in November 2008 an indeterminate number of previous guests lost an intangible experience but retained an emotional attachment to the vessel based on their nostalgic recollection of wonderful time onboard. This, the last cruise-liner to be built on the Clyde in Britain, had exemplified a design style and superb craftsmanship reflecting the age in which she was built (Daily Telegraph October 3, 2009).

5.3 Traditional cruising history Ocean cruise tourism has indistinct origins but may be considered as having developed in popularity following the demise in the line voyage trade. This is perhaps most notable following the introduction of regular jet airliner services across the North Atlantic beginning in the late 1950s. Surplus liners were utilised as cruise ships to try and sustain their financial viability. Empty cabins were not good business as unlike an aircraft seat, they stay empty for days and secondary income from ship-board purchases is also lost (Papatheodorou 2006). The freedom offered to cruise ship designers by the dissolution of the class system was enormous. Not having to provide for separate spaces formerly dictated by class offered the opportunities for designers to use more imagination when creating ideas for the use of public areas. Cabins although small when compared with hotel rooms ashore, were made to appear bigger by innovative use of modern materials (Cartwright & Baird 1999). The experience of sea travel has associations with ‘glamour, excitement, romance and prestige’ (Graves 2004: 207). These associations with line voyages and the upper classes were transferred to the ocean cruise holiday market together with the notion of sea cruising being expensive, formal and oriented towards rich seniors (Sharpley 2002). Features included dining options and basic entertainment often created by the passengers themselves with assistance from the ship’s officers and crew. Liners had carried cargo and passengers and this tradition notionally remains currently as Cunard Line’s Queen Mary 2 still carries a 82

token mail bag on trips to the United States to allow retention of the Royal Mail Ship prefix RMS and the entitlement to fly a postal banner (Maxtone-Graham 2004). Although this vessel may be considered as primarily a cruise ship it still maintains a current line voyage schedule from Southampton to New York and return. This is however, only a limited schedule compared to the days when air travel was not an option. Although potentially it may be supposed that owing to perceived dangers, including terrorism associated with flying, regular line voyages may become feasible as a regular option in future. Plymouth, England, for example, had been a prominent liner port as it provided among others transatlantic passengers an access point to join the British Rail Network. This saved passengers time, by avoiding another day sailing to London or other UK ports. Plymouth was also a strategic mail distribution point from the beginning of the liner traffic at the start of the 20th century. It also became important as an emigration gateway and a popular call for French and German liners for many years (Kittridge 1993). At its peak in 1930 there were 744 liner calls at Plymouth that year. However, the trade dwindled to just 54 calls per year and Plymouth closed as a liner port in October 1963 (Kittridge 1993). Although cruise ships have been calling at Plymouth the yearly visits have been low in number despite the City’s promise as an excellent excursion port. Lack of a dedicated cruise ship dock facility is an inhibitor as passengers need tendering to shore similarly as they did during the liner era. This makes disembarking on excursions ashore less attractive to the physically challenged. Many seniors would perhaps prefer to relax and remain onboard their cruise ship. It also makes the port uncompetitive when compared to Southampton, UK, for example, which has dedicated passenger handling facilities.

5.4 Re-shaping the traditional cruise market Many seniors who are physically and mentally active retain a spirit of adventure. However, it is contended that many of these may still prefer a more traditional package of sea travel which has less brash forms of entertainment and a more formal style of service than that generally offered on modern large or mega-sized ships. The size of the senior market has been recognised for some time by, for example, medical drug companies (Block and Roering 1979). However, only more recently have some marketers realized the enormous potential the senior market has to offer (Solomon et al 1999). One of the inhibitors to promoting products among older consumers is a reluctance to associate them with ageing as this is likely to deter younger groups. The larger ocean cruise companies appear reluctant to promote their product to seniors and prefer to target middle aged groups (Solomon et al 1999). This may be partly explained through marketing experience which has proven evidence that some products targeted specifically at seniors have been unsuccessful as many older people prefer to perceive themselves as younger than they are or feel (Tréguer 2002). To better categorise this sector of the market senior consumers can be sub-segmented into four age groups as in Table 5a:

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Pre-Retirement/Retired (55-64 Years)

Retired Active (65-74 years)

Retired/Able (75-84 years)

Aged/Least Able (85+ years)

Sub-segmented Senior Age Groups Table 5a

Adapted from: (Solomon et al 1999)

It could be assumed someone at the lower end of this age range would be physically most able and likely to look upon themselves as part of an even younger group rather than be classified with the elderly, however this is untested presumption. Many in the younger group may prefer traditional cruising and further research work is necessary in order to understand the relationship of demography to the traditional cruise market consumer behaviour. It has been suggested that those aged over 50 prefer quality products as a preference to quantity (Tréguer 2002). If this proves to be the case in relation to the major corporation operated mega-ships there is a risk of failure in any attempt to attract a large sector of their potential market. The type of consumer experience implied in marketing promotion is therefore of particular significance to the provider. High quality of customer service is promoted as part of the marketing tool-kit by cruise and other companies to enable the management of consumer experiences (Armstrong and Kotler 2009). In a theatrical service context, companies also manage their employees by creating the script for their actors. Once in the role the actors are subject to pressures put upon them by the demands of the character. They may operate at the edge of their capability and not be able to deliver the services expected. The script may change, roles revised, and actors may find they are out of character. Prescriptive management can stifle creativity and innovative ideas. Re-organisation or re-structuring a company to stratify it in order to widen appeal offers the illusion of improvement, for example the introduction of successively bigger ships such as Cunard Company’s Queen Mary 2. However, this could lead to the negative re-shaping of the consumer experience. Pine and Gilmore (1999:81) suggest there could be ‘service-sacrifice’ with the customer having to settle for a compromise. Empowerment of the first line service provider allows the server the freedom to offer alternatives and thereby enhance the guest experience and not diminish it because choice is improved not depleted (Ryan 2002). For example, self-service restaurants, an idea developed by food chains, may appear to demand a service-sacrifice by making the customer work but is a popular option on cruise ships for those preferring casual rather than formal dining (Ritzer 1996). Whilst this sort of experience may be widely accepted on modern cruise ships choice rests with the purchaser. The provider having outlined the various services available, the consumer subsequently may not receive their perceived want or need if misled by marketing material (Lovelock and Wirtz, 2007). The material may direct the person to choose the ‘wrong’ (for them) segment of the organisation. In the case of an ocean cruise it could mean joining a ship with a theme aimed at a different demography or an unsuitable type of shore excursion. For example a trip involving terrain which might prove awkward for those with walking difficulty. In the theatrical context, as parts of the overall experience may be delivered by various companies of actors, poor performers in one of the productions could lead to disappointment with the show. Relationship marketing is therefore a vital component in order to avoid pitfalls and satisfy needs (Vargo and Lusch 2004). ‘Service-dominant logic,’ as proposed by Vargo and Lusch (2004), is the result of an evolutionary marketing trend leading to a service rather than goods focus. Transition of 84

focus includes the recognition that service can be encapsulated within a product (Vargo and Lusch, 2004). This means the functionality of the product renders the consumer a service. It also ceases to be merely an object but something comprising the knowledge of the designer and builder. This knowledge, having been transferred from other sources, has been refined through experience and embedded ideas. The basic function becomes the foundation for additional satisfaction and products become ‘artefacts around which customers have experiences’ (Vargo and Lusch 2004:15). A technological example of this is the computer and the internet both of which provide added value in this way. Using the Worldwide Web for planning and or booking a trip can provide an absorbing and pleasurable experience which can be remembered after the holiday (Shaw and Williams 2002). Immersion in a virtual world is not confined to computers but also visitor attractions providing themed surroundings (Bryman 2004). Technology is not only used to provide elements of the themed experience but also to control it by influencing the imagination (Bryman 2004). Themed cruises, such as those offered by Disney, allow the cruise tourist to be escapist with the experience comprising play, self actualisation and social licence to relax in a fully ‘limonoid’ state (Ryan 2002;.3). The reach of companies to their customers has been electronically extended not only to market an experience but also to include gathering information about their needs (Sawhney 2004). Equally, technology advancement has placed pressure on traditional travel agents who have had to adapt their service to be able to compete with and also use the internet together with other electronic media such as booking search engines (Weber and Roehl 1999). Service becomes central in replacing goods as the dominant factor where specialised competences and performances create benefits for provider and consumer (Vargo and Lusch 2004). It is contended there has not been a clear indication by Pine and Gilmore (1999) of what element contained within a product constitutes a defined commercial experience. This could identify why that would give the product an advantage over similar offerings by competitors (Poulsson and Kale 2004). This is important because it also indicates areas of weakness regarding the social responsibility associated with that experience. It is suggested that consumers may choose a product which promises a particular experience and if that has clearly defined environmental impact ratings, this may prove a useful selling point. An example of this is shore excursions offered by cruise companies. Shore excursions are revenue generating and offer another dimension to the cruise experience (Gibson 2006). With careful management there are opportunities to increase their value monetarily for the provider and holistically to the consumer. The consumption of services aimed at offering extraordinary experiences for pleasure seekers is conceptualised as the ‘tourist gaze’ by Urry (2002). His adaptation of Foucault’s (1976) medical observation analogy to a tourism context can be related to the cruise tourist shore excursionists who are intent on viewing and photographically capturing new scenes. The provision of a shore excursion programme needs to include allowance for a safe environment or ‘bubble’ (Cohen 1979; Jaakson 2004) to provide a suitably secure platform from which to view the unfamiliar (Cartwright and Baird 1999). Whilst there is a charge for this particular experience opportunity in line with Pine and Gilmore’s (1999) ideal, early cruise excursionists were not widely welcomed because of their perceived impact on the local population (Douglas and Douglas 2004). Equally cruise tourists outside their ‘bubble’ can feel threatened by the ‘foreign’ environment including risks of crime or poor facilities for disabled passengers ashore (Douglas and Douglas 2004). Currently there is no reliable indicator of the likely 85

social impact of these tours on the host ports. It is not clear if modern cruise guests are aware of, or even consider, their own impact as there is no specific evidence tourists actively campaign for socially responsible tourism or environmental improvement (Johnson, 2002). Early cruise passengers were probably equally unconcerned about environmental issues as the social awareness profile would probably have been low compared to attention subsequently given to the topic in modern times. Cruise tourists in the 1960s were more used to being resourceful, adaptable and accepting of the limits of the traditional cruise ships at that time. However, the embedded social definitions of traditional cruising provided the foundation for what modern cruise product consumers experience today. The leisure package incorporates the promise of convenience, professionally delivered hospitality, entertainment and adventure (Crang 1997). The modern fleet of mega-sized cruise ships has proved popular with many consumers but bring with them social, health, welfare and environmental concerns (Weaver 2005). Designed as revenue capturing floating resorts the ships have become self-contained destinations with ports of call of largely secondary importance (Weaver, 2005; Dickinson and Vladimir 1997). The global ocean cruise market is dominated by three major corporations. Carnival is the largest, and together with Royal Caribbean International and Star Corporation of Malaysia, operates ships which, in 2006, comprised approximately 86% of the world cruise market (Page 2008). By virtue of the geographic spread, international customers and multi-national crew, cruise tourism can be considered as symbolic of a mass-tourist globalised industry. The globalisation phenomenon is complex, being multi-dimensional, but can be considered as a process of global economic, political and cultural imposition leading to partial re-shaping of local systems and networks (Wood 2000). A plethora of onboard attractions reduce the incentive for cruise tourists to spend ashore. There is nevertheless, competition to attract cruise ships by global ports of call as cruise tourists are perceived to be big spenders ashore (Klein 2008). This is challenged in studies of individual passenger spread and their expenditure away from their ship whilst ashore in Mexico, Jamaica and the Bahamas (Jaakson 2004; Henthorne 2000; Wilkinson 1999). Their dining, entertainment and accommodation are included in the cruise cost with other facilities such as beauty salons and fine dining, together with many other options available at extra cost (Weaver 2005). Operating ships in whichever region of the world they like provides structural mobility, economy of scale and flexibility to be able to tap new markets. Proactive management also adds to the reasons cited why cruise-lines outperform traditional shore-based facilities (Toh et al 2005). As a revenue centre a cruise ship can be viewed as a ‘tourism enclave’ which may offer some employment to a local community to which it touches through short visits but generally retains the bulk of generated wealth which is subsequently channelled to the international parent company Weaver (2005:166). In some cases cruise ships don’t call at ports at all but stop at islands or resort areas to which the cruise company has exclusive access through ownership or lease. In such instances there is no benefit to local communities as profits are exclusive to the cruise company (Wilkinson 1999; Wood 2006). Changes to the cruise product may be designed to optimise company revenues by maximising onboard spend by massive expansion of consumer facilities onboard the modern mega-ships. Unfortunately, the size of the ships passenger capacity brings pressure on the availability of these facilities leading to long queues onboard (Sunday Times 29 November 2009). This demeans the consumer experience and re-shapes it in ways which may prove economically counter-productive in the longer term. Those seeking a more personalised 86

service may wish to patronise smaller vessels or be forced to stop cruising as less traditional sized ships are released by the major corporations. Eventually the existing, but ageing, traditional ships will have to be withdrawn as they become uneconomic to maintain. Replacements of similar but more environmentally compliant type will not be available as the re-use ships will comprise only larger vessels of the type not normally identified with traditional cruising. It is contended that this prospect is of concern as it has serious implications for the products offered in future and threatens sustainability of the traditional cruise market. The image of the traditional cruise package experience currently promised may become no longer valid. The cruise experience, whilst promised through marketing of the whole holiday product, is in fact an intangible element within it. It provides a demonstration of the marketing shift away from focus on tangibles as suggested by Vargo & Lusch (2004). The service to the consumer is therefore of paramount importance. It can be argued the experience itself becomes greater than the product and the way this is shaped can determine the traditional cruise market future. The theatrical play analogy identifies the need for good ‘actors’ or the employees of the company who make the initial contact with the prospective client. The contact with the company is often with those working at its lowest level and this introduces a potential failing (Baum 2002). Whilst Pine and Gilmore (1999) recognise the ‘actors’ role they focus on training but appear to ignore the variation of personality traits which are an inherent part of human nature. They also fail to acknowledge gender, cultural differences such as religious beliefs and service standard expectation which may vary internationally. Whilst training may be perceived as first class, any ambiguity in delivering the company ‘message’ owing to cultural or personality differences, as Pine and Gilmore (1999) recognise, could prove disastrous to the service experienced by the consumer. Services as part of the experience economy include a hedonistic spiritual dimension which requires additional skills to deliver expectations. Applying this need particularly to the hospitality sector, Baum (2006) suggests adding a new dimension, ‘Experiential Intelligence.’ This, he argues, recognises the wide variety of services and global variation within the hospitality industry. The strong North American focus implied by Pine and Gilmore (1999) overlooks international company ownership within which working conditions and ideals may vary globally. Unlike their counterparts in the USA or Europe, workers from less developed countries may not have had the opportunity to be a customer receiving similar services to those they provide (Baum 2006). This disadvantage leads to a particular knowledge deficiency requiring additional skills to address the problem and this may prove difficult to reconcile even with appropriate training. Cultural or political reasons could be a factor as could identification of the appropriate skills. The globalised nature of the cruise industry which relies heavily on hospitality staff from a range of economically challenged backgrounds provides an illustration of the broad skills requirement. Multi-national ship crews provide hospitality services to international cruise tourists. It is common for a gratuity to be included in the cruise price or implied as being expected in recognition of good service onboard. It could be argued that this gratuity is a tangible recognition by the consumer of intangible services received which draws the interaction between servant and guest into a two-way incentivised experience. Whilst cruise companies have a prescriptive approach to service employee behaviour this is not only designed to benefit consumer perception but a personalized approach encourages tourists to tip more freely. 87

North Americans commonly accept that gratuities are necessary and accepted as a usual when associated with service (Douglas and Douglas 2004). It is perceived incentives improve the likelihood of good service. This is not quite so common among the British and many other nationalities who find the issue embarrassing as they are unsure how to value a service financially and prefer a more discretionary approach to tipping (Douglas and Douglas 2004). Cruise companies have recognised this issue and many have moved to automatically adding a percentage charge to bar tariffs. They also add a gratuity for other services per passenger each day. Although this may be adjusted on request some consumers find this extra charge on their bill objectionable (Douglas and Douglas 2004). It is not transparent that the gratuities reach specific individuals the consumer wishes to personally reward for exceptional service. Another system offered by some companies presents a package inclusive of all gratuities within the cruise offer price. Gratuities are distributed to all the crew and even tour coach drivers and guides thereby completely removing any consumer concern as the actual value of service reward is not indicated. Cruise ship workers completing mundane duties can boost their basic income considerably with gratuities. With any system of service charging in place cruise companies benefit by continuing to pay basic rates to crew whilst retaining the power to dismiss employees who receive poor comments on comment cards they hand out to passengers (Weaver 2005), or if workers challenge their working conditions (Klein 2002). With increasing sized ships the gratuity potential rises together with that of revenue. It also raises the profile of other concerns including environmental, social impact and safety issues. Potentially the current threat of terrorism has influenced passengers toward a preference of no-fly cruises. It is likely this type of cruise may be particularly popular with less able people because flying adds unwelcome stress to taking what may be considered an otherwise relaxing break. Issues associated with baggage weight when flying are also avoided and this is important particularly for those packing formal clothing for the cruise. It is possible the surge in new-build mega-ships, some of which are entering service during a period of world economic stress, questions whether cruise corporations have over-estimated their likely popularity, particularly among the older demography. Well educated, affluent, senior groups are likely to be attracted by ‘green’ marketing but those who prefer smaller, more intimate cruising may wish to ignore their ship’s emission levels. Older ships are less likely to be environmentally friendly because of dated design features including less fuel-efficient engines. The introduction tighter pollution controls such as waste water and garbage disposal have been forced through maritime legislation (MARPOL). These have been embraced by the introduction of advanced waste re-cycling systems on new build ships (Cudahy 2001). Advanced computerised safety systems are installed as standard plus improved disabled facilities (CLIA 2009). Older ships need to be expensively converted to take account of such changes but this is not necessarily economic and is likely to result in their withdrawal from service earlier than may have been expected. This could leave a gap unlikely to be filled by ageing mega-ships. The actual building of ships offers employment opportunities ahead of staffing the finished vessel with international employees. This has benefits for the local economy as does construction work associated with new passenger terminal facilities at various international locations. It can be argued that proportional to the size of the oceans of the world cruise ships have minimal presence and their impact is insignificant in relation to global pollution (Klein 2008). However, this ignores supply chain provisioning associated 88

with servicing the ship and aircraft emission pollution whilst facilitating passengers joining a cruise on air-inclusive packages. This may be mitigated by the number of cruises sailing on round trips from ports accessible easily without flying. The number of cruises departing from British ports for example, increased by 23% in 2008 compared to a 4% increase in flycruise packages (Passenger Shipping Association 2009). This is clearly an indicator that there is no diminishing interest in cruising although many larger ships have difficulty docking at smaller ports which opens the field for smaller vessels with special interest themes. These are popular with older cruise tourists who may be less interested in famous brand ships because of market segmentation which is designed to attract younger cruisers.

5.5 Conclusion This work has highlighted some of the issues associated with the traditional cruise market consumer. The evolution and exponential growth of the cruise trade from the 1960s to present has seen technological advances such as ship design and safety and pollution standard enhancement. As ships have grown in size to cater for the transition to masstourism globalised status they have begun to marginalise what can be considered as the traditional cruise market consumer, many of whom are likely to be in the senior sector. It has been suggested that whilst some big ships offer a version of traditional cruise ideals they may at best be pseudo-authentic representations of a past liner era. This may present opportunities for marketing in order to invoke feelings of nostalgia to attract consumers. However, many consumers may have experienced pre-mass market traditional cruises or liner voyages and would possibly prefer a more relaxed offering irrespective of ‘neonostalgia.’ Whilst some may be prepared to accept the re-shaping of their experience to a modern approach, the mega-ships can be overwhelming. Modern entertainment features may become neutralised by numbers too great to be accommodated without queues. This makes them less attractive as has been discussed in this work even the dining experience has been ‘McDonaldised’ (Ritzer 2000). The part played by technology in re-shaping cruise experience has been reviewed. The importance of service delivery to consumer experience has also been explored together with its relationship to the ‘experience economy’ Pine and Gilmore (1999) and ‘service dominant logic’ Vargo & Lusch (2004). As traditional style cruise ships leave service in future the question needing further research is: can the traditional cruise experience remain viable when succeeding vessels are likely to be much larger and impersonal? The sustainability of the traditional market is not to be underestimated as with forecast changes in demographic segmentation the senior market cannot be ignored. If the traditional cruise experience is re-shaped to the point of pseudoexperience this could risk alienation of an economically important sector for cruise tourism. Further research should provide the opportunity to offer tentative suggestions which may lead to an assured sustainability of the traditional cruise market.

5.6 References x

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Jefkins, F. (1993). Modern Marketing, Pitman, London. Johnson, D. (2002). Environmentally sustainable cruise tourism: a reality check, Marine Policy 26 261-270. Kittridge,A. (1993). Plymouth-Ocean Liner Port of Call, Twelveheads Press, Truro. Klein, R.A. (2002). Cruise Ship Blues, the Underside of the Cruise Industry, New Society, Gabriola Island, B.C. Klein, R.E. (2008). Paradise Lost at Sea, Rethinking Cruise Vacations, Fernwood, Halifax, Nova Scotia. Lovelock, C.H. (1995). Managing Services: The Human Factor, In: Understanding Services Management, Prentice-Hall, New Delhi. Lovelock, C., Wirtz, J. (2007). Services Marketing; People, Technology, Strategy, Pearson, MacCannell, D. (1999). The Tourist-A new theory of the leisure class, University of California Press, London. Maxtone-Graham,J. (2004). Queen Mary 2, Bulfinch Press, New York. Mowen, J.C., (1995). Consumer Behaviour, Prentice-Hall, New Jersey. Olins, W. (2004). On Brand, Thames & Hudson, London. Page, S. (2008). Book Review: The Future of Cruising – Boom or Bust, Peisley, T., Seatrade Report, In: Tourism Management 29, 821-830. Papatheodorou, A. (2006). The Cruise Industry : An Industrial Organization Perspective. In Cruise Ship Tourism CABI, Wallingford. Passenger Shipping Association (2009). The Annual Cruise Review 2008, the psa.co.uk. Accessed 03/01/10. Pine 11, J., Gilmore, J.H. (1999). The Experience Economy, Harvard Business School Press, Boston. Poulsson, H.G., Kale, S.H. (2004). The Experience economy and commercial experiences, The Marketing Review, 4, 267-277. Ritzer, G. (1996). The McDonaldization of Society, Pine Forge Press, Thousand Oaks, California. Ritzer, G. (2000). Sociological Theory, McGraw-Hill, New York. Ryan, C. (2002). The Tourist Experience (2nd Edition), Continuum, London. Sawhney, M. (2004). Going Beyond the Product: Defining, Designing, and Delivering Customer Solutions, In Vargo, S.L., Lusch, R.F.(Eds) The Service –Dominant Logic of Marketing,(Eastern Economy Edition), Prentice-Hall, New Delhi. Sharpley,R. (1999). Tourism, Tourists and Society, Elm, Huntingdon. Shaw, G., Williams, A.M. (2002). Critical Issues in Tourism –A Geographical Perspective, Blackwell, Oxford. Shaw, G., Williams, A.M. (2004). Tourism and Tourism Spaces, Sage, London. Solomon, M., Bamossy, G., Askegaard, S. (1999). Consumer Behaviour, A European Perspective, Prentice Hall, New Jersey. Slattery, M. (2003). Key Ideas in Sociology, Nelson Thornes, Cheltenham. Sunday Times (2009). Mega-Cruising Has Arrived, Times Newspapers, London. Telegraph 3 October 2009. The Importance of being Frank, Telegraph Newspapers Ltd. The Oldie Annual (2008). Swansong- all aboard the Oldie cruise, Oldie Publications, London. Toh, R.S., Rivers,, M.J., Ling, T.W. (2005). Room occupancies: cruise lines out-do the hotels, International Journal of Hospitality Management 24, 121-135. Tréguer, J-P., (2002). 50+ Marketing, Palgrave, Basingstoke. 91

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Urry, J. (2002). The Tourist Gaze (2nd Edition), Sage, London. Vargo, S.L., Lusch, R.F. (2004). The Service –Dominant Logic of Marketing, (Eastern Economy Edition), Prentice-Hall, New Delhi. Weber, K., Roehl, W.S. (1999). Profiling people searching for and purchasing travel products on the world wide web, Journal of Travel Research, Vol. 37, 291-298. Weaver, A. (2005). Interactive service work and performative metaphors, the case of the cruise industry, Tourist Studies, Vol. 5(1) 5-7. Weaver, A. (2005). Spaces of containment and revenue capture: ‘super-sized’ cruise ships as mobile tourism enclaves, Tourism Geographies, Vol.7, No.2, 165-184. Wilkinson, P.F. (1999). Caribbean cruise tourism: delusion? Illusion? Tourism Geographies 1(3), 261-282). Wood, R.E. (2000). Caribbean cruise tourism, globalization at sea, Annals of Tourism Research, Vol. 27, No. 2, pp.345-370. Wood, R.E. (2006). Cruise Tourism: A Paradigmatic Case of Globalization? In: Cruise Ship Tourism, CABI, Wallingford.

6.0

Assessing the environmental impact of anchoring cruise liners in Falmouth bay

Sarah Tuck, John Dinwoodie, Harriet Knowles & James Benhin International Shipping and Logistics Group School of Management Plymouth Business School University of Plymouth Plymouth, UK

Abstract Ports are coming under increasing pressure to manage their operations in an environmentally sustainable manner. This pressure comes from legal requirements, national agencies, planning inquiries and local activists (Wooldridge et al 1999). Ports have tended to react to such demands by making environmental policies and audits, always playing catch-up to the latest problem. An alternative approach is to be pro-active in seeking out environmental concerns at an early stage, assessing the scientific evidence of harm in the context of the specific port, and taking mitigating action according to the evidence. This is the basis of a Knowledge Transfer Partnership between the University of Plymouth and Falmouth Harbour Commissioners (FHC), who run a small trust port in South West England. The Port of Falmouth enjoys over thirty cruise calls a year. Smaller cruise liners can berth within the docks, but larger ships must anchor in Falmouth Bay, a Marine Special Area of Conservation, and tender their passengers ashore. Anchoring directly affects the benthic habitat through smothering, abrasion and disturbance. The noise and visual intrusion of vessels create an indirect impact. Studies into anchoring activities in fragile habitats such as eelgrass beds have led to the strict management of anchoring (Milazzo et al 2002). Falmouth Bay has a rare dead maerl habitat. This paper presents the on-going study, which is assessing the potential environmental impacts of anchoring in the Falmouth bay area. The steps include synthesising existing data on the nature of the seabed, recording actual anchor locations within the bay to identify areas of high anchoring density and identifying the threat that anchoring poses to the species in the maerl habitat. It is know that there are bivalves that live below the surface, so comparative core samples will be air lifted from high and low anchoring density areas.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_6, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

6.1 Introduction Ports are coming under increasing pressure to manage their operations in an environmentally sustainable manner. This pressure comes from legal requirements, national agencies, planning inquiries and local activists (Wooldridge et al 1999). This exploratory case presents a methodology, based on a study currently in progress, for assessing the environmental impact of anchoring cruise liners at a particular port. As the paper will demonstrate, the actual environmental impact (as distinct from the presumed harm), will be different for each port. It varies with the nature of the seabed, with the importance and with the fragility of the underwater habitat in the anchored area. All of these factors can generally be assessed from existing data, but the data need to be drawn together in a systematic manner. The study applies a systems approach to maritime operations that is more fully reported in Dinwoodie et al (2010).

6.2 The Port of Falmouth The port of Falmouth is in Cornwall on the South West peninsula of England. It is an Area of Outstanding Natural Beauty (AONB) and the Fal estuary and bay is a Special Area of Conservation (SAC) under the EU Habitats Directive. The harbour is said to be the third largest in the world. Falmouth itself is a town of great charm and interest. It is not only strategically placed for various cruise itineraries, but also surrounded by towns, gardens, great houses and world-renowned heritage sites that make ideal excursions from the town. It is marketed as a cruise destination via the marketing partnership of Destination South West (2010). Falmouth received 32 calls by cruise ships in 2009 (Falmouth Harbour Commissioners 2010). Falmouth Harbour Commissioners (FHC) is the statutory port authority responsible for the regulation of much of Falmouth Harbour and Falmouth Bay. FHC operate within a demanding framework of national and EU legislation to ensure the economic and environmental sustainability of the port. Like many other ports around the world, they are active in addressing the need for commercial change, such as the joint proposal for a Cruise Terminal with the Falmouth Docks & Engineering Co. Ltd (FDEC), whilst tending only to react to environmental drivers. This leads to a situation where the port is often left reacting to an environmental initiative instead of engaging and adding value to the initiative from its conception. The designation of the port area as a SAC in 1998 made the constraints exceptionally severe, as these are strictly protected sites (McLeod et al 2005). In 2008, FHC decided to take a new approach. They would take the initiative by seeking out environmental concerns at an early stage, assessing the scientific evidence (and if necessary commissioning new research), and then take mitigating action as required, based on the evidence. The port is seeking to work in partnership with the statutory environmental bodies such as Natural England. Such an ambition would normally be beyond the resources of a 94

small organisation, but through the part-funded UK Government’s Knowledge Transfer Partnerships (KTP) programme, they are able to tap directly into the specialist environmental, maritime and economic expertise of the University of Plymouth for a 30month project.

6.3 Anchoring by cruise ships at Falmouth Cruise ships that visit Falmouth prefer to berth alongside the wharves within Falmouth Docks, close to the town centre. However, vessels over 230m in length or 8m in draft must anchor in Falmouth Bay or Carrick Roads, and then tender their passengers to the Docks. This is not an uncommon situation in the cruise industry. Ships have been anchoring off landing places for as long as they have been going to sea (McGrail 1992). The very nature of anchoring creates a physical impact on the ocean floor and benthic environment (the flora and fauna at the bottom of the sea), as well as the wider environment. Possible impacts that have been identified are: x x x x x x x

Physical loss of or damage to habitats and species through: smothering (from sediment transportation) surface abrasion and disturbance by anchor chains, leading to visible anchor scars the deeper impact of a sea anchor as it falls to the sea bottom and then digs in to the holding ground, or drags through it Noise generated by ship manoeuvring and anchoring activities ‘Visual intrusion’ of anchored vessels in an area of natural beauty (Milazzo et al 2004, The Green Blue 2008)

The purpose of this exploratory case is to discuss the evidence-based investigation of the physical impacts of anchoring. Investigations of noise and visual impacts are also on-going but these are beyond the scope of this paper. As the world gets richer, there are more commercial ships, more cruise liners and more leisure craft, all of which contribute to an increased intensity of anchoring activities. There is also a growing demand for environmental stewardship of fragile benthic environments such as coral and eelgrass (Milazzo et al 2002, Milazzo et al 2004, Walker et al 1989). These demands have led to bans on activities such as dredging, and the strict management of anchoring in some places. Concerns have been raised about the potential damage caused by anchoring in the Fal and Helford SAC, and especially by the anchoring of large ships in Falmouth Bay (Solandt 2009, Lockley 2009). The Fal & Helford SAC is designated under the EU Habitats Directive which requires that the SAC’s interest features (those habitats and species for which it is an important area), be 95

protected. The Directive specifically mentions the need to avoid the deterioration of habitats and the disturbance to species by whatever means necessary, including the establishment of management schemes. In particular, the management scheme for the Fal & Helford SAC aims to maintain the features of the site whilst enabling its continued and diverse human use. The features of European importance include the sub littoral sandbanks, eelgrass beds, living maerl beds (maerl is commonly known as calcified seaweed) and extensive areas of dead maerl gravel. It was known at the commencement of the project that dead maerl gravel was present in significant quantities in Falmouth Bay where cruise ship anchoring takes place (McLeod et al 2005). Anchoring in the ordinary course of navigation is a component of public navigation. As this public right of navigation is based on common law and not statutory law, it can be overridden by Parliament in any local or general act. Port authorities such as Falmouth Harbour Commissioners have regulatory powers to override the common law public right of navigation (Falmouth Harbour (amendment) By-laws 1996). However, FHC has a duty to protect Public Navigation whilst at the same time regulating it for port operations. In short, FHC can regulate and restrict public navigation by putting in place voluntary or byelaw enforced anchorage restrictions (The Green Blue, 2008) but not prohibit it entirely (private communication from M. Williams, 2009). A prohibition on anchoring would lead to economic loss for FHC as it earns significant income from services such as pilotage, which are supplied to ships that anchor for cruise calls, bunkering, refuge from bad weather, awaiting high tide etc. As a not-for-profit organisation, all income is re-invested in improving services for stakeholders. In December 2000, IMO adopted an amendment to the Safety of Life At Sea (SOLAS) Convention that makes it possible for countries to establish No-Anchoring Areas (NAA) for ships (SOLAS 1974 Chapter V regulation 10). Such areas may, after submission to IMO, be established by a country in areas where anchoring is dangerous or where it could result in severe environmental damage. Typically, these will be areas of coral reef. No anchoring areas are routing measures, similar to traffic separation schemes, and after adoption they are added to all official charts, thus giving them the force of international law rather than purely domestic law or regulation (IMO 2002a).

6.4 The investigation As part of the wider KTP project at Falmouth, in 2009 a study to evaluate the environmental impacts of anchoring activities on the maerl habitats of Falmouth Bay was instigated. The objectives of the study were to: x

96

Draw together current literature and evidence on anchoring impacts in order to scope the project

x x x

Map the areas where dead maerl is the dominant sediment on the seabed (at least 50%), using existing data Map the actual anchoring sites of commercial vessels Commission further research into the actual impact of commercial anchoring on the benthic species that exist in the maerl habitat

6.5 Anchoring impacts Marine ecology and conservation literature contains reports of research into anchoring impacts carried out in areas such as the Mediterranean and Australia. All existing evidence suggests that the significance of the impact depends on the intensity and regulation of any anchoring activities (Milazzo et al., 2002). Vessel size, frequency of anchoring, the weather conditions and substrate firmness may also all affect the extent of anchor damage (Walker at al., 1989; Francour at al., 1999) and damage to benthic habitats varies according to anchor type (Milazzo et al., 2004). Studies in an intensively used anchorage site in New Zealand show that anchoring scars, that is, the visible mark left on the seabed from chain abrasion, persist for up to 3 months; however they diminish in area and depth after one month (Backhurst and Cole, 2000). The level of impact (environmental damage) to a habitat has been linked to the rugosity (bumpiness) of the habitat (Friedlander and Parrish 1998). For instance a coral environment would see a high level of visual impact or damage caused by an anchor. It has been suggested that in live benthic habitats such as seagrass, recovery rates from both direct and indirect consequences of boat anchoring may be long term as they are slow growing (Milazzo et al., 2004). The dead maerl habitats are of course non-living in Falmouth Bay so that that the habitat recovery rate can be expected to be less severe. However, intense anchoring reduces habitat structural complexity and therefore species richness (Hemming and Duarte, 2000). Technical literature on anchors used by large commercial ships was found in marine technology sources, where research has been conducted on the holding properties of anchors. An anchoring system consists of the anchor, the mooring line that transmits forces from moored vessels or pulling systems to the anchor, and an attachment point or tensioning system on the moored vessel (Rocker, 1985). The anchor line usually consists of chain, wire rope, or some combination of the two, however it may include fiber line or rigid elements. The anchor provides the majority of the resistance to motion, (which is known as holding capacity) although the contribution of portions of the anchor line lying on the seafloor may be significant, especially with chain (Rocker, 1985).

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Figure 6a: A commercial stockless anchor, walked out and ready to drop. Source: FHC undated. Vessels anchoring on both a commercial and recreational scale use drag embedment anchors or drag anchors which are generally known by manufacturers’ trade names such as Danforth (common on small boats) and Hall’s Patent Stockless anchor (see figure 6a). Research is extensive into maximizing the efficiency of anchors (particularly by the U.S. Navy) as well as investigations into the potential for anchors to uproot underwater cables. Burial of submarine cables on the continental shelf began in the 1970s as a result of problems that were caused by seabed fishing gear. Cable installers were then asked to guarantee a set depth of burial, even though that depth might not be optimum for the prevailing level of risk. Typically, the specified burial depth is now one metre, and sometimes deeper than 1.5 metres (Allan and Comrie 2001). Fishing and anchoring are the main threats to cables. During anchoring operations, a drag anchor is ‘walked out’ to just above the water line and then dropped to the seafloor. It generally lands upright, then the base is ‘tripped’ and the arms rotate until the flukes embed themselves into the seabed and maximum holding capacity develops. Generally anchors get more efficient at holding the vessel in place, the softer the bottom material and thus the deeper the burial depth into the seabed (Danton 98

1985, Rocker, 1985). Very deep penetration is not desirable for commercial shipping, as it becomes more difficult to recover the anchor. Therefore, anchors are designed to lie on the surface of the seabed, supported by the shank, with only the flukes penetrating the holding ground (Allan and Comrie 2001). Only in soft soils is there a tendency for the anchor to penetrate to deep depths (Allan 1998). The stockless anchor is not the most efficient design and in fact dates back to 1840. More modern types are more efficient at penetrating to greater depths due to their geometry, for example, the AC14 or Admiralty pattern anchor has a holding power of two and a half times that of a patent stockless anchor. However, stockless anchors are the most common choice for commercial ships, with the advantage of easy stowage and having a reasonable holding power to weight ratio of roughly three to four times (Danton 1985, Allan 1998). Burial protection index (BPI) is defined thus: “Concept relating depth of burial to the level of protection achieved taking into account the strength of the material into which the cable is buried. The objective of the concept is to provide the optimum economic level of burial protection” (SCIG undated page 3). The BPI suggests depths at which to safely burial the cables adding a 33% safety factor onto that for any anomalies. These depths are dependent on the threat present, ranging from cable damage caused by normal fishing gear to ship anchors. Based on these figures table 1 shows the level that it is suitable to bury a cable in safety so that it will not be damaged by anchors and therefore provides port managers with the information regarding the maximum penetration depth of an anchor (Mole et al, 1997). The anchor and anchor chain weight, size and mass has little correlation to the anchor penetration burial depth. Instead the anchor geometry (type of anchor) and the sediment type are the influencing factors, with sediment type being the greatest variable of the two. Falmouth seabed sediment would likely fall into the middle column of Table 6a called ‘softfirm soils, sand, gravel and medium clay, (Birkett et al, 1998; Jones et al, 2000). As the table provides a 33% safety factor on actual threat from anchor penetration, it can be seen that the actual threat is 0.957m penetration from 95% of all commercial anchors (derived from the figure in bold in table 6a). In the context of the marine environment a study conducted by Hall-Spencer and Atkinson (1999) demonstrated that macrofauna burrows to depths up to, and likely over 72cm, where the majority of recorded species existed at depths between 20cm- 40cm in a maerl habitat. Therefore, maximum anchor penetration depths are likely to correspond with these species’ living depths. However as Backhurst & Cole (2000) suggest, ship anchoring has been intense for centuries in Falmouth Bay, in which case any effects on the more fragile benthic species have already occurred. 99

Hard ground Soft to firm soils Very soft to soft (hard clay and (sand, gravel, soils (mud, silt and rock) medium clay) soft clay)

Threat Trawl boards, beam trawls, <0.4m scallop dredges

0.5m

>0.5m

<0.4m

0.6m

n/a

n/a

2.0m

>2.0m

<1.5m

2.1m

7.3m

Hydraulic dredges Stow net fishing anchors Ships’ anchors 10,000dwt

up

to

Ships anchors up to 100,000dwt (includes 95% of <1.2m 2.9m 9.2m world fleet) Table 6a. Nominal required burial depths to place cable below threat line for different threats and soils: figures include a 33% safety factor on actual penetration. Source: Hoshina and Featherstone 2001. Supporting this, Currie & Parry (1996) investigated the effects of scallop dredging by measuring the changes in infauna (benthic organisms that dig into the seabed) and concluded that changes in species showed that recruitment took six months for most species and that the changes in communities caused by dredging were less than those seen due to seasonal or annual changes. Abrasion and disturbance caused by anchor chains and anchor flukes dragging on the seabed surface are not likely to impact macrofauna species as these burrow into the seabed (HallSpencer and Atkinson, 1999) and for these species the penetration depth of anchors is more of concern. Those species that are more mobile are at greater risk from dragging anchors as they do not burrow. However, based on Currie & Parry’s (1996) investigation, the significant reduction in the abundance of many species caused by anchor dragging, which is often reported by divers, may increases the amount of food available on the plot and attract some of the mobile and opportunistic species. Establishing recovery rates of habitats impacted by anchor dragging has been researched in terms of species recruitment within the anchor scar. An investigation into the persistence of anchor scars concluded that they persisted for three months, however had diminished in area and depth after one month (Backhurst & Cole, 2000). This investigation compared the physical and direct impacts of three sites in New Zealand where the range of anchor activities varied from little to intense. This study found that there was little evidence that the animal life within intensely anchored areas was different from that found in less used areas 100

(Backhurst & Cole, 2000). Therefore the impact of anchoring had little effect on these different habitats, although one species was affected, the pinnid bivalve Atrina zelandica. However, as Underwood (1990) states, heavily used sites probably have different characteristics such as water depth or shelter from wave action, as well as greater frequency of use. Notwithstanding, Backhurst & Cole (2000) emphasize that their anchor investigation permitted for a controlled investigation as the study artificially imposed their own impact via anchoring. As previously discussed anchors by their nature impact the seabed. In addition, secondary impacts such as dragging the anchor can cause localised particle suspension (Green Blue 2008). However, research indicates that mortality only occurs when invertebrates are exposed to sediment concentration of 2 to 20 g-1 over 21 days (Currie & Parry, 1996), and although frequent, the process of dropping anchors in Falmouth is neither continuous nor lengthy in comparison to these figures.

6.6 Mapping the seabed This investigation aimed to assess the impact of the physical loss and/or disturbance of marine habitats and species caused by anchor embedment and anchor chain abrasion by comparing two similar habitats (one that is continually anchored on and one that is not anchored on) by utilising AIS data and using field examination of the sites. As an evidencebased investigation, this research adapted a methodology from the following existing investigations: Hall-Spencer, J.M. & Atkinson, R.J.A., 1999 and Royal Haskoning, January 2003. In order to find sites to compare, maerl habitats needed to be categorised in Falmouth (to find similar habitats where maerl was abundant) as well as the exact positions where ships anchored. The assessment of maerl habitat was carried out using existing data on the distribution of dead maerl within the SAC. These were: x x x x

Davies and Southeran 1995, using the RoxAnn acoustic system supported by direct observation of the seabed with video camera, and sediment samples Hardiman, Rolfe and White 1976, which used visual assessment of the nature of the sediments on the seabed SeaStar Survey 2007, which also used visual assessment Ruiz-Frau et al 2007 (on behalf of Cornwall Sea Fisheries Committee), which reported grab sampling data and included an underwater camera survey

Using EasyCad7 software, a map was produced which layered the different surveys to show the locations where dead maerl was recorded as being absent or present, and if present then the percentage of maerl within the sample or observation. Locations where maerl was 101

the dominant sediment (more than 50% of coverage), present but not dominant (less than 50% of coverage) and absent, could then be shown as a discrete map. In order to estimate the area of maerl, a series of polygons were drawn around these locations in EasyCad. These were drawn using the following assumptions: x

Where there are two stations recorded as maerl being dominant, it was assumed that maerl dominates between the stations x It was assumed that the boundary between the presence or absence of maerl was equidistant between two stations where maerl was recorded as being present or absent, although in practice one sediment type is likely to grade gradually into another with a poorly defined boundary (Solly and Knowles 2009) This information was uploaded into a geographic information system (GIS) software format to produce a GIS map that showed an estimation of the areas within the SAC boundary where maerl sediment was the dominant habitat. This maerl sediment is a feature of European importance within the Fal and Helford Special Area of Conservation, and as such it requires conservation.

6.7 Mapping anchor sites Currently, data is being recorded that will show precise anchor locations in the Falmouth Harbour Area using vessels’ Automatic Identification System (AIS). This system is a live, short-range coastal tracking system used on ships for identifying and locating vessels by electronically exchanging data. It is capable of automatically providing information about the ship to coastal authorities and other ships. Under SOLAS chapter V, from December 2004 it is a requirement that AIS is fitted and operational on board international voyaging ships with gross tonnage (GT) of 300 or more tons, all cargo ships of 500 GT and all passenger ships regardless of size (b 2002b). Prior to this study, AIS information was available to FHC as a display with current information. AIS data is sent from the ship’s AIS transponder, (located on the bridge) to Falmouth Harbour Commissioners. The live data is available at FHC on a desk-based system that displays ship information visually on a screen. For this project, software was developed that filtered this received AIS data according to two rules: 1) If the ship is moving at less than 1 knot (i.e. an anchored ships which has not changed the status of the ship on the AIS transponder from moving to anchored) or 2) An anchored ship that has changed the status of the ship from moving to anchor. The development was not a simple exercise. The anchor position has to be derived using ships length and heading information obtained from AIS with adjustment for assumed cable length. From this information, the exact locations of each ship (with an AIS transponder) which fell into the two categories above were recorded. Data recording commenced October 102

2009 and continues. These logs of anchored ships are saved in a DXF file, which can then be downloaded into GIS to produce a map. Recording this data will provide information regarding vessel anchor locations, frequency and intensity of anchorage, which can be related to the maerl information provided by the mapping exercise above.

6.8 Further research on physical impacts The Cornwall Sea Fisheries Committee underwater camera survey (Ruiz-Frau et al 2007) showed no evident anchor scars in an area, the NW corner of Falmouth Bay, which is a location where fishing boats frequently anchor to fish and so do commercial ships. The AIS data confirms that this is a frequently anchored on area. No anchor scars could be identified from the study. The literature review (Friedlander and Parrish 1998) shows that there is a link between the rugosity of the habitat and the physical impact of anchoring. When analysing the visual survey produced by CSFC it could be seen that the dead maerl in Falmouth was level and not rugged. Therefore, from these sources and through discussions with marine scientists at the University of Plymouth, it became clear that the surface anchor scars on the dead maerl gravel showed no more than temporary and easily regenerated impact. Therefore initial ideas concerning multibeam sonar surveys and visual inspections were discarded. The unknown risk to the unique environment in the SAC is to bivalves that live deep down below the surface, in the layer disturbed by dropping the anchor itself. Core samples need to be lifted in order to assess the health of this habitat. Now that information is available on where the anchors are dropped and where the maerl is abundant, it will be possible to select sites for core sampling in heavily and lightly anchored dead maerl areas, in order to assess the effect of anchoring. This survey has already been costed and budgeted for, and it is planned to take place in the spring when the weather permits field activity of this sort.

6.9 Conclusion Most of the research that has so far been conducted into the physical impacts of anchoring has consisted of collating, recording and analysing existing sources of information. To do this, there were two main innovations. One was the use of GIS software to collate and analyse existing data on the nature of the seabed, together with the AIS data. The most significant innovation was the production of the anchor position logging software, which allows the recording of actual anchoring positions from AIS data. As FAC has now shown the way, such an exercise is within the reach of even small port authorities. Each port is unique in its situation, pattern of commercial usage and benthic habitat. By conducting an exercise such as that outlined above, the port will be able to assess the actual environmental risk posed by the anchoring of cruise shipping within its limits and approaches. If a genuine risk is then apparent, the port can commission exactly the right kind of field survey to establish the 103

facts and the most effective form of environmental management. It should be noted that further economies may be possible by working in partnership with environmental researchers or regulatory bodies, who already wish to undertake field studies within the port area.

6.10 References x x

x x x

x x x x x

x x

x

x

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ABP Research (1990). Good Practice Guidelines for ports and harbours operating within or near UK European marine sites. English Nature, (UK Marine SACs Project). Allan, P. (1998). Selecting Appropriate Cable Burial Depths – A Methodology. IBC Conference on Submarine Communications. The Future of Network Infrastructure, Cannes, November 1998. Allan, P. and Comrie, R. (2001). The Selection of Appropriate Burial Tools and Burial Depths. SubOptic 2001 International Convention, Kyoto 22-23 May 2001. Backhurst, M., and Cole, R. (2000). Biological impacts of boating at Kawau Island, northeastern New Zealand. Journal of Environmental Management 60 239-251. Birkett, D., Maggs, C. and Dring, M. (1998). Maerl (volume V). An overview of dynamic and sensitivity characteristics for conservation management of marine Sacs. Scottish Association for Marine Science (UK Marine SACs Project) 116pp. Currie, D. and Parry, G. (1996). Effects of scallop dredging on a soft sediment community: a large-scale experimental study. Marine Ecology Progress Series, 134, 131-150. Danton, G. (1985). The Theory and Practice of Seamanship, 7th edn. London: Routledge and Keegan Paul. Davies, J. & Sotheran, I.S. (1995). Mapping the distribution of benthic biotopes in Falmouth Bay and the lower Ruane Estuary. English Nature report no. 119A. Destination South West (2010). Falmouth [online]. Available: www.destination southwest.co.uk/main/destinations/Falmouth/Index.asp (accessed 10 Jan 2010). Dinwoodie, J., Knowles, H., Tuck, S. and Benhin, J. (2010). A Systems approach to Assessing the Environmental Impact of Maritime Operations in Falmouth Harbour. 42nd Annual Universities’ Transport Study Group Conference. University of Plymouth Centre for Sustainable Transport, Plymouth 5-7 January 2010. Falmouth Harbour (amendment) By-laws 1996. Falmouth Harbour Commissioners (2010). Falmouth Cruise Calls 2009 [online] Available: http://www.falmouthport.co.uk/leisure/documents/CruiseCalls09.pdf (accessed 24 Jan 2010). Francour, P., Ganteaume, A. and Poulaine, M. (1999) Effects of boat anchoring in Posidonia oceanica seagrass beds in the Port-Cros National Park (north-western Mediterranean sea). Aquatic Conservation 9 391-400. Friedlander, A., and Parrish, J. (1998). Habitat characterisation affecting reef assemblages on a Hawaiian coral reef. Journal of Experimental Marine Biology and Ecology, 224, 1-30

x

x x

x x x x x

x x

x

x

x

x

x

Hall-Spencer, M. and Atkinson, R. (1999). Upogebia deltaura (Crustacea: Thalassinidea) in Clyde Sea maerl beds, Scotland. Journal of the Marine Biological Association of the UK, 79 , pp 871-880 Hardiman, P.A., Rolfe, M.S. & White, I.C. (1976). Lithothamnium studies off the southwest coast of England. ICES report no. CM 1979/K:9. Haren, A. (2007). Reducing Noise Pollution from Commercial Shipping in the Channel Islands Marine Sanctuary: a Case Study in Marine Protected Area Management of Underwater Noise. Journal of International Wildlife Law and Policy, 10, 153-173. Hemming, M., and Duarte, C. (2000). Seagrass Ecology. Cambridge: Springer. Hoshina, R. and Featherstone, J. (2001). Improvements in Submarine Cable Protection. SubOptic Conference, Kyoto 22-23 May 2001. IMO (2002a). Archive 2000 Press Briefings [online]. Available: http://www.imo.org/ newsroom/mainframe.asp?topic_id=68&doc_id=551 (accessed 25 Jan 2010). IMO (2002b). AIS Transponders [online]. Available: http://www.imo.org/Safety/ mainframe.asp?topic_id=754 (accessed 10 Jan 2010). Jones, L., Hiscock, K. and Connor, D. (2000). Marine habitat reviews. A summary of ecological requirements and sensitivity characteristics for the conservation and management of marine SACs. Joint Nature Conservation committee, Peterborough (UK Marine SACs Project Report). Lockley, P. (2009). Ships at anchor put pots and nets at risk. Western Morning News, Monday, November 30th 2009 p. 3. McGrail, S. (1992). From the Ice Age to Early Medieval Times. In Duffy, Fisher, Greenhill, Starkey and Youings (eds) The New Maritime History of Devon vol. 1: from early times to the late eighteenth century. London: Conway Maritime Press and the University of Exeter, pp 25-31. McLeod, C., Yeo, M., Brown, A., Burn, A., Hopkins, J., and Way, S. (eds.) (2005). The Habitats Directive: selection of Special Areas of Conservation in the UK. 2nd edn. [online] Joint Nature Conservation Committee, Peterborough. Available: www.jncc.gov.uk/ SACselection (accessed 24 Jan 2010). Milazzo, M., Badalamenti, F., Ceccherelli, G., and Chello, R. (2004). Boat anchoring on Posidonia oceanica beds in a marine protected area (Italy, western Mediterranean): effect of anchor types in different anchoring stages. Journal of Experimental Marine Biology and Ecology 299 51-62. Milazzo, M., Chemello, R., Badalamenti, F., Camarda, R. and Riggio, S. (2002). The Impact of Human Recreational Activities in Marine Protected Areas: What Lessons Should Be Learnt in the Mediterranean Sea? Marine Ecology 23, Supplement 1280-290. Mole, P., Featherstone, J. and Winter, S. (1997) Cable Protection – Solutions Through New Installation and Burial Approaches [online]. Cable and Wireless Marine, Chelsford. Available: http://www.scig.net/Section07c.pdf (accessed 24 Jan 2010). Myrberg, A. (1990). The effects of man-made noise on the behaviour of marine animals. Environment International, 16, Issues 4-6, 1990, Pages 575-586. 105

x x

x x x x x

x x

x x x

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Rocker, K. (1985). Handbook for Marine Geotechnical Engineering. Port Hueneme, California: Naval Civil Engineering Laboratory. Royal Haskoning, January 2003. Marine Ecological Survey of the Fal Estuary: Effects of Maerl Extraction. [online] Available from: http://www.falmouthport.co.uk/ pdf/maerl_report.pdf (accessed 28 Jan 2010) Ruiz-Frau, A., Ivor, E., Rees, S., Hinz, H. and Kaiser, M. (2007). Falmouth Bay maerl community benthic survey. Unpublished report. Available: FHC. Safety of Life at Sea Convention 1974, Chapter V, regulation 10. SCIG (undated) Standard Definitions [online]. Available: http://www.scig.net/ Section03.pdf (accessed 3 Feb 2010). SeaStar Survey 2007, Cornwall County Council - SV Mariner Seabed Mapping Survey. Solent, J. (2009). The Fal and Helford Special Area of Conservation: Mismanagement of fishing: a case study [online]. Marine Conservation Society. Available: http://www.seasat-risk.org/1mages/Fal%20and%20Helford%20synopsis_1.pdf (accessed 24 Jan 2010). Solly, N. and Knowles, H. (2009). Maerl surface coverage in Fal and Helford SAC. Unpublished document, Royal Haskoning and Falmouth Harbour Commissioners. The Green Blue (2008). What We Know About Anchoring and Mooring: Boating Fact Sheet 6 [online]. Available: http://www.thegreenblue.org.uk/publications/documents/ Mooring.pdf (accessed 24 Jan 2010) Underwood, A. (1990). Experiments in ecology and management: their logics, functions and interpretations. Australian Journal of Ecology. 15, 365-389. Walker, D., Lukatelitch, R., Bastyan, G. and McComb, A. (1989) Effect of boat moorings on seagrass near Perth, Western Australia. Aquatic Botany 36, 69-77. Wooldridge, C., McMullen, C. and Howe, V. (1999). Environmental management of ports and harbours – implementation of policy through scientific monitoring. Marine Policy 23, 4, 413-425.

PART C: Processes & Practices

7.0 Ensuring safe and sustainable cruise operations Paul Wright Plymouth Business School University of Plymouth Plymouth, UK

Abstract The cruise ship industry concerns the movement of passengers by sea for pleasure. The physical environment in which the cruise ship operates is complex and dangerous. Passengers rightly expect their safety to be of paramount importance. Their confidence in the structural and management systems associated with safety must be such that it does not prejudice their enjoyment of the cruise experience. The cruise ship also interacts with the sensitive and fragile environment of the oceans and atmosphere. As a floating community its impact can be adverse. The regulatory framework, embedded in Conventions established by the International Maritime Organisation, exists to ensure that minimum standards are established and maintained to protect the fare paying passenger, crew, ship and the environment. This article will briefly consider recent developments in the ever demanding regulatory framework which impacts upon the operation of the cruise ship. Areas to be considered and discussed will consider the role of the two major international conventions; SOLAS (safety of life at sea) and MARPOL (International Convention for the Prevention of Oil from Ships) and will briefly cover Codes of Practice such as the International Safety Management (ISM) Code and the International Ship and Port Security Code (ISPS) Code. The philosophy behind the International Maritime Organisation (IMO) Passenger Ship Safety Initiative will be discussed. Through appropriate case studies the paper will consider the responsibilities of both ship and shore based managers for the above and discuss their effectiveness. In recent years the development of the cruise sector has been rapid and recent. The physical growth and capability of the cruise ship ensures that the issues which are covered in the paper will be of interest to academics and professionals working in any aspect of the sector. Key words: Cruise ship safety, sustainable cruise operations, SOLAS, MARPOL, IMO, regulatory framework.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_7, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

7.1 Introduction The cruise industry we know it today, developed from the demise of passenger shipping which occurred in the mid nineteen sixties with the arrival of long distance passenger aircraft. Today the cruise industry is one of specialised and committed ships, which provides opportunity for individuals to travel the world at leisure. It is a sector of international shipping which is highly influenced by the demand of the tourism and hospitality industry. The current cruise fleet stands at 514 vessels with a total capacity of 488,000 lower berths. Despite the recession there is an order book for 38 new ships which will provide an additional 90,300 lower berths, equal to 19% of the existing fleet. Twenty of the new orders will come online in 2010 and 2011 (Fairplay 2009). Despite the recent economic pressures long-term prospects for the cruise industry are bright. Since June 2009 there has been a significant improvement in passenger numbers. According to OSC World Shipping, the cruise industry attracted more than 13.6 million passengers in 2005. The estimate for 2010, is 18 million passengers and for 2020, 27 million passengers (Ocean Shipping Consultants 2005). The cruising public is dominantly American, but other markets are developing. By 2020 it is estimated that 64% of cruise passengers will originate from North America, 26% from Europe and 10% from the rest of the world. The cruise ship sector is a specialist area which operates within the international shipping industry. The world fleet, not less than 100 gross tons (gt) in size, numbers in excess of 95,000 ships. Of these, the cargo carrying fleet which includes cruise ships numbers about 51,000 vessels (Lloyds Register - Fairplay 2006). By ship numbers the cruise sector is 1% of the world’s cargo carrying fleet. Whilst other sectors of the cargo carrying fleet respond to demand derived from the industry and commercial interests, the development of the cruise sector is very different. Through innovation and enterprise the sector is able to create its own markets. Cruise markets have their own characteristics and focus on encouraging individuals from different income groups and having different interests to experience leisure activities at sea. The market segments have been described as budget, contemporary, premium, niche and luxury cruises (Gibson 2006). Despite the variations found in the cruise sector and whilst sensitive to the comfort of and demands of the passengers, a key demand and responsibility on the ship’s management is to operate a safe ship. In addition today’s society is increasingly sensitive to the issue of maintaining a clean and sustainable environment. Like all ships the cruise ship operates in a risk environment. Every cruise (voyage) is a ‘maritime adventure’ (MIA 1906). An adventure can be defined as is defined as a daring enterprise with outcomes which cannot be guaranteed. In a recent book ‘A Dictionary of Passenger Ship Disasters’ (Williams 2009), reference is made to more than 1,000 passenger ships which have sunk during the last 175 years. In the introduction the author states; ‘ … despite all the advantages of more than a century and a half of progress in improving maritime safety standard the risk of disaster at sea still remains .. over the past 25 to 30 years alone there have been on average three or more major disasters involving passenger ships every year in some case with extraordinarily high loss of life.’ 110

Many of the recent passenger ship losses are associated with passenger/vehicle ferries a design which is particularly sensitive to poor operational practice. However the cruise ship also operates in the same environment where substantial risks are present and a high degree of vigilance and management competence is required. The risks which impact on cruise ship safety involve physical conditions, such as weather, waves and ice or human actions including traffic movement, terrorism and piracy. If risks are not countered the results could be dramatic and large loss of life and injury can result. A cruise ship like any other ship, can founder in heavy seas, ground due to negligent navigation, be involved in collision, held to ransom by terrorists and catch fire. Fire on board a ship is a risk most feared. It has been said that cruise ships ‘are not really ships – they are all inclusive resorts that just happen to move’ (Marine Log 2005). As resorts they accommodate hundreds, often thousand of persons. For example the ‘Oasis of the Seas’, the world’s largest cruise ship which entered service in December 2009 has accommodation for more 6,300 passengers and 2,165 crew members; a total of almost 8,500 persons may be on board at any one time. The ship and all persons on the ship collectively have an impact upon the environment through pollution, which is created from oily waste water, garbage, sewage and emissions to the atmosphere. Pollution issues are of concern to all cruise ship operators, but in particular where cruise areas have a natural sensitivity, such as the cold waters of Alaska. The cruise ship industry is one where safety and environmental protection are critical components of the operation. Cruise ship operation is also about generating profit for the investor and conflicts of interests can occur, for safety and environmental protection have a cost. The establishment of International regulations defines common standards for safety and environmental protection and provides a level playing field for ship operational costs. The discussion which follows provides an overview of the regulatory framework which impacts on the operation of the cruise ship. It considers the role of two of the major international Conventions, SOLAS and MARPOL which have been developed and are continually being updated to establish a safe and environmentally sustainable industry. Case studies are used to describe issues and the impact of legislation on the operation of cruise ships. Comments following each case study are those of the paper’s author.

7.2 The need for a level playing field. The International Maritime Organisation – an agency of the United Nations, based in London is the body which has been entrusted to: "to provide machinery for cooperation among Governments in the field of governmental regulation and practices relating to technical matters of all kinds affecting shipping engaged in international trade; to encourage and facilitate the general adoption of the highest practicable standards in matters concerning maritime safety, efficiency of navigation and prevention and control of marine pollution from ships". The Organization is also empowered to deal with administrative and legal matters related to these purposes (IMO Convention 1948). 111

The history of the IMO can be traced back to 1949 when an international convention was established to develop a United Nations agency concerned with maritime matters. Established as the International Maritime Consultative Organisation (IMCO) in 1982 it took on it present title of the International Maritime Organisation (IMO). The IMO replaced a reliance on individual treaties, often based on the legal framework of the traditional maritime nations, such as the United Kingdom. Presently the IMO has a membership of 169 nation states. It operates through five established committees each responsible to Council and through Council to the Assembly for undertaking tasks required. The five committees are the Maritime Safety Committee (MSC), the Marine Environmental Protection Committee (MEPC), the Legal Committee (LEG), the Technical Cooperation Committee and the Facilitation Committee (FAL). Since its establishment, the IMO has adopted some 40 Conventions and Protocols. It has also produced numerous Codes and recommendations relating to safety, pollution prevention, security, liability and compensation and the facilitation of international maritime traffic.

7.3 Maritime safety - an overview The first task of the IMO in 1959 was to consider safety of life at sea. A Safety of Life at Sea international treaty was initially adopted in response to the RMS Titanic disaster in 1914. The International Convention for the Safety of Life at Sea (SOLAS) was the first convention considered by the IMO and is arguably the most important of all Conventions. As issues arise SOLAS is amended. Today the SOLAS Convention consists of 12 Chapters. The Chapters cover many aspects of maritime safety, some of which will be recognisable to all who have watched the epic film ‘Titanic’. (Titanic 1998) SOLAS establishes safety regulations for the ship’s structure including stability and fire protection, the need for lifesaving appliances and radio communications. It also covers concerns associated with the safety of navigation and the management of safe ship operations. Various Codes are established through SOLAS, including two of particular relevance to the cruise ship industry the International Safety Management (ISM) Code and the International Ship and Port Facilities Security (ISPS) Code. Other safety related Conventions established by the IMO are; x x x x x x

The International Regulations for the Prevention of Collision at Sea (COLREGS) The Standards of Training, Certification and Watchkeeping Convention (STCW) The International Convention on Maritime Search and Rescue (SAR) Load Line Convention (LL) The International Convention for Safe Containers (CSC) Convention on the International Satellite Organisation (INMARSAT).

7.4 Safety of life at sea convention (SOLAS) As already mentioned the SOLAS Convention was established following the sinking of the RMS Titanic. The areas which concerned the legislator then and now are many. SOLAS 1974 Chapter 2.1 concerns issues associated with watertight subdivision and operation of machinery in emergency situation. Today’s regulations establish that a passenger ship must be subdivided into watertight compartments which will enable the ship to remain afloat instable condition after a assumed damage to the ships hull has occurred. The highest degree of subdivision applies to ships of greatest length and theses are ship, which are 112

primarily engaged in the carriage of passengers. The regulatory framework requires that machinery and electrical installations are to be designed so that services, essential to the safety of the ship, passengers and crews are maintained under various emergency conditions (IMO 1998). Case Study 1: ‘Oceanos’ The cruise ship ‘Oceanos’ sank off the South African Coast in 1991 following the flooding of a watertight compartment and engine room. No lives were lost. A Greek Inquiry into the incident found the ship’s officers responsible for not closing the watertight doors between compartments. The watertight subdivision integrity of the ship was violated which led to the sinking of the ship. Concerns about fire protection, detection and extinction onboard a ship are covered in Chapter 2.2 of the SOLAS Convention. The IMO recognises that ‘every passenger is a potential ignition source’ (IMO 2006). Due to their increased vulnerability the regulations pay particular attention to passenger ships. They provide details of construction materials, vertical and horizontal zoning, fire integrity of bulkheads and decks and means of escape. Fire detection, fire alarms and fire extinguishing system are also covered, including the need for sprinkler systems. Case Study 2: ‘Ecstacy’ In July 1998 the cruise ship ‘Ecstacy departed the Port of Miami, Florida, for Key West, Florida. On board were 2,565 passengers and 916 crew. A fire started in the main laundry and migrated through the ventilation system to the aft mooring deck. The vertical subdivision saved the fire from spreading forward. Photographs of the fire show the fire contained to the after part of the ship illustrating the value of vertical zoning. Case Study 3: ‘Star Princess’. On the 23 March 2006 on passage between Grand Cayman and Montego Bay fire broke out in the passenger accommodation amidships of the Star Princess, a ship completed in 2002. The fire was caused by a cigarette left burning on a balcony constructed of polycarbonate partitions, polyurethane deck tiles and plastic furniture. The balconies crossed fire zone boundaries. There were no fire detection or extinction systems on the balconies. One person died. The structural regulations did not cover cruise ship balconies. Balconies on the ‘Star Princess’ were built of materials, which were not fire resistant and inadvertently became the origin of the fire. A critique of the RMS Titanic incident was the failure of the ship to carry sufficient lifeboats for all passengers. In fact the RMS Titanic carried lifeboats ‘in excess of statutory provision’. The legislation was dated at the time of the building of RMS Titanic and was based on gross registered tonnage (grt). The maximum size of ship regulated for was “10,000 grt and 113

upwards”. The grt of RMS Titanic was 46,328 grt. The regulations required the RMS Titanic to carry lifeboat accommodation for 962 persons. In fact she had life saving appliances for 1,178 persons, which represented a 30% provision for the maximum number of persons the Titanic could carry, 3,547 persons. Today passenger ships engaged on international voyages are required by SOLAS Chapter 3, which is concerned with Survival Craft and Rescue Boats, to carry on board ‘partially or totally enclosed lifeboats on each side of the ship to accommodate 50% of the total number of persons’. In addition a passenger ship must also carry rigid or inflatable life rafts able to accommodate 25% of the total number of persons on board. SOLAS also requires the carriage of rescue boats, one on each side for passenger ships of more than 500 gross tons. Personal lifesaving appliances such as life buoys, lifejackets and immersion suit are also detailed. The costs involved in providing safety equipment are high. For example a 25 man SOLAS approved life raft in 2009 cost in the order of $7.600 and an individual life jacket $160 (GotoMarine 2009). Case Study 4: ‘Explorer’ On November 23rd 2007 in the Antarctic Ocean, the cruise ship Explorer with 91 passengers on board struck a submerged object, reported to be ice. The collision caused a gash in the side shell plating which resulted in water ingress. The crew and passengers abandoned ship by open lifeboat and drifted for 5 hours before being rescued. The weather was kind at the time. The ship had been designed to operate in Arctic and Antarctic. Passengers and crew abandoned the ship by open lifeboats into low temperature Antarctic waters. Each person was equipped with immersion suits and life jackets and survived their ordeal. Case Study 5: ‘Sun Vista’ In May 1999 whilst on passage in the Malacca Straits a fire broke out in the engine room of the 38 year old cruise ship Sun Vista. She took on water and sank. All passengers and crew abandoned ship by lifeboat. No lives were lost. In the case of the Sun Vista an observer stated that “it was probably advances in technology and the extensive disaster preparedness of crew that saved the over 1,000 passengers on board”. When the RMS Titanic sank the use of radio at sea was in its infancy. Whilst recognised that it could be used by vessels in distress the system was insufficiently developed. Whilst the radio officer sent off a CQD, distress call the requirement for all ships to be equipped with radio and maintain a 24 hour monitoring of the distress frequencies was not established. With the advent of satellite technology the traditional maritime radio network was dismantled and in 1999 the Global Maritime Distress Safety System (GMDSS) was established. Today a passenger cruise ship are provided with a wide array of communication equipment including an INMARSAT installation capable of transmitting distress alerts through satellite services, a satellite Emergency Position Indicating Radio Beacon (EPIRB). 114

VHF radio telephony and NAVTEX. The radio communications requirements are covered in Chapter 4 of the SOLAS Convention. Case Study 5: ‘Munchen’ In December 1978 the Lighter Aboard Ship (LASH) met extremely heavy weather on her 62nd Voyage. A Mayday call was received but the position given was inaccurate. The search for the Munchen was undertaken at one time by more than 100 ships and lasted for a week. The 261 metre ship of 44,600 tons was never found. An emergency beacon automatically launched from the ship helped locate the possible position and was recovered. The loss of the ‘Munchen’, although not a passenger ship, illustrates the limitations of calling for distress and defining the position of the distressed ship through the use of radiotelegraphy. Today the establishment of the GMDSS system on all ships greater than 300 gt, provides a means to be heard and a position to be located. Ice warnings given by ships in the area and communicated to the RMS Titanic should have influenced the decision regarding the ship’s speed. Reduced speed might have enabled the ship to avoid the iceberg or contributed to less severity of damage imposed. The sinking of the RMS Titanic initiated the establishment of the Ice Patrol Service, which today is still maintained by the United States Coast Guard on the East coast of the U.S. In addition to the Ice Patrol Service, Chapter 5 of SOLAS covers many other responsibilities related to the Safety of Navigation. Included are obligations and procedures for a ship in receipt of a distress call to proceed to ship in distress, ship routeing requirements, safe manning of ships and the requirement for ship borne navigational equipment. Chapter 5 also makes it a requirement that to ensure effective crew performance in safety matters ‘every passenger ship is required to have a working language which is established by the Master or company and recorded in the ship’s log book’ (SOLAS 1974). Case Study 6: ‘Scandanavian Star’ On passage from Oslo to Frederikshavn in April 1990 fires broke out on the passenger ferry MS Scandanavian Star. Whilst there were many issues surrounding the fire the inability of the crew members to communicate with each other and with passengers made the fire fighting operation and evacuation very difficult. 158 people died in the incident. Among other findings the disaster showed that many crew did not speak or understand the language used on board the ship and were unable to communicate with each other or the passengers. It is now a requirement that all crew members should speak a limited maritime English. There is a further concern that in times of distress people, including crew will ‘panic in their own language’. With cruise ships employing multi - ethnic crew the use of a common language is of great importance. All crew members are required to undertake a standard test to assess their understanding of both written and spoken English Whilst it should not be thought necessary to be aware of cargoes when operating a cruise ship the concerns of SOLAS Chapter 6 covering stowage and securing of cargo may be of interest The situation is of particular interest if a collision occurs with a cargo carrying ship. 115

SOLAS Chapter 6 states “cargo should be loaded stowed and secured as to prevent damage or hazard to the ship and the persons on board and loss of cargo overboard.” Also of concern is the carriage at sea of dangerous good in packaged form, referred to in SOLAS Chapter 7. Except for the carriage of explosives required for life saving purposes, explosives are not allowed to be carried on board passenger ships. However other packaged dangerous good including low level radio active material, propellants and paints will be carried. Case Study 7 ‘Norwegian Dream’ The Norwegian Dream, a cruise ship with a capacity for more than 2,000 passengers collided with the container ship Ever Decent whilst on passage between Zeebruge and Dover in August 1999. The collision resulted in a number of containers being “transferred” to the bow of the Norwegian Dream. If the cargo in the containers had been of a hazardous nature there could have been a serious risk to the health of the passengers. Whilst the cause of the accident was an error in the watch keeping process on board the Norwegian Dream (Masters Advisory Panel), the result was a collision with a container ship which was carrying dangerous goods in containers on deck. The inadvertent transfer of containers onto the deck of the cruise liner, had they been carrying certain dangerous goods could have major consequence of the 2,000 passenger on board. Public authorities are concerned about the carriage of bulk liquid chemicals and liquefied gases in bulk in the same shipping areas used by cruise ships. In 1987 the capsize of the ‘Herald of Free Enterprise’ was an event which caused the second highest loss of life in peacetime, on a ship registered in the United Kingdom. The Court of Inquiry which investigated the loss was appalled by some of it findings. Lord Justice Sheen made comment on the ‘sloppy management’ (Crainer 1993) practices, which although not the primary cause made a serious contribution to the disaster. The separation of shore management from shipboard management was also seen as being an area which needed redressing. The Inquiry led to the establishment of SOLAS Chapter 9, the Management of Safe Operations of Ships, of the International Safety Management, commonly referred to as the ISM Code. The ISM Code attempts to ensure that the directing mind of a ship operating company cannot dissociate itself from its responsibilities to run a safe operation. It requires that a Designated Person Ashore is appointed, who is able to the report to the highest level in the company, namely the Board of Directors about safety issues. The ISM Code also requires the establishment of a Safety Management System which has commitment ‘from the top’, involvement of both shore and ship based personnel and the allocation of resources to ensure that the system is effective. Case Study 8: ‘Herald of Free Enterprise’ The Herald of Free Enterprise a RORO (roll on roll off) passenger ferry was an event which shocked the maritime world and resulted in the largest peacetime loss of life from a United Kingdom registered ship since the loss of the RMS Titanic. On leaving the port of Zeebrugge on March 6th 1987 the ferry capsized leading to the loss of 193 persons. The inquiry found that the loss of the ‘Herald of Free Enterprise’ was not just caused by the bow door of the ship being left open upon sailing, but as David Steel QC, counsel for the Secretary of State for Transport stated that the company was afflicted by “the disease of a sloppy system and 116

sloppy practice which infected not just those on board the ship but infected well into the body corporate”. The impact of the disaster resulted in the establishment of a Code which was intended to minimise the management gap at the ship shore interface. Whilst the philosophy behind the requirements of the ISM Code are admirable, the translation of the Code into practice has caused difficulties particularly in the ‘paper trail’ which is required. SOLAS Chapter 11 has two components, both of which impact on the safe and secure operation of a cruise ship. The first component is considered under the title Special Measures to Enhance Maritime Safety and provides the authority for Port State Control Officers to act in respect of ship safety. If for example after inspection of a ship the Port State Control Officer believes that the master or crew are not familiar with essential shipboard procedure relating to the safety of the ship, or that the ship is not seaworthy for the intended voyage, he has the power to detain the ship until the situation has been brought to order. Case Study 9: ‘Oceanic’ held in New York In June 2009 the cruise ship Oceanic underwent emergency drydock repairs after the US Coast Guard found a hole in its hull upon arrival in New York, The 1965-built, 38,772gt Oceanic was inspected by the Coast Guard who found the small hole in its hull to be leaking approximately one gallon per hour during an inspection. Further investigation “identified 16 discrepancies, including a crack in the hull below the waterline on the port side of the vessel, lifesaving, fire fighting, safety and other maintenance deficiencies”. The Oceanic remained in a ‘detained’ status until repairs were reviewed and approved by the USCG and the ship’s classification society, Bureau Veritas. The Port State Control System has been shown to be an effective method of helping ensure the quality of ships, particularly ships which are registered under a flag state which has limited powers of enforcement. There are still a number of older passenger ships which have been converted into cruise ships which show the ‘passage of time’. The second component of SOLAS Chapter 11 concerns ship and port security. It established the International Ship and Port Security Code (ISPS Code) as a direct response to the 9/11 terrorist attacks on New York. Today it is a requirement for a cruise ship to hold and maintain an International Ship Security Certificate. To obtain a Certificate the ship will have to appoint a ship security officer, carry out of a ship security assessment and produce a ship security plan approved by the Flag State. Details are specified in the ISPS Code. The ship security assessment needs to identify existing security measures, evaluate key ship board operations which need protecting and establish potential threats to key ship board operations. Whilst cruise ships are vulnerable to terrorist attack, there are very few cases where such attacks have occurred. The development of comprehensive security systems covering both passengers and crews is one factor in keeping a cruise ship secure. An increasing problem is that of piracy. The ability of the cruise line operator to establish cruise itineraries away from ‘risk areas’ helps to avoid risk of attack.

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Case Study 10: ‘Achille Lauro’ Arguably the most famous case of terrorism associated with cruise shipping which occurred in October 1985. Four members of the Palestinian Liberation Front hijacked the ship while she was on passage from Alexandria to Port Said. Holding the passenger and crew to ransom they demanded the release of 50 Palestinians held in Israeli jails. After two days of negotiation during which an American passenger was killed, the hijackers abandoned the liner in return for a safe passage to Tunisia. The plane was diverted to a United States Air Force base in Sicily where the hijackers were arrested. Whilst the event happened many years ago the incident illustrates the ways in which terrorists could board cruise ships and make an attack. It also shows the difficulties in sustaining a terrorist operation on board a cruise ship, which unlike an aircraft has many access points and a large population. 7.4.1

Case Study 11: ‘MSC Melody’

In April 2009 the cruise ship MSC Melody, with almost 1000 passengers and 500 crew on board was attacked by pirates 500 miles off the Somali Coast. The ship had on board a team of Israeli guards who repelled a potential boarding by the use of firearms and water hoses. The event is believed to be the first occasion that armed security guards hired by a shipping company have opened fire to deter a piracy attack. Piracy is a growing problem at sea and through the use of ‘mother ships’ attacks on ships are taking place well offshore. The question of using firearms to repel a piracy attack is controversial. The case of the MSC Melody is believed to be one of the fist times that a non military ship with private security aboard has used firearms.

7.5 Developments: The IMO passenger ship safety initiative The developing size of passenger ships, particularly cruise ships has been a concern to the International Maritime Organisation. In 2000 the Marine Safety Committee (MSC) of the IMO undertook an initiative to assess whether safety regulations prevailing at that time were still relevant to future cruise ships (O’Neill 2000). The initiative looked at the ‘large passenger ship’. After deliberations the MSC came to a conclusion that it would base its guiding philosophy for safety of large passenger ship on the premise that the regulatory framework should place more emphasis on the prevention of a casualty from occurring in the first place and that future passenger ships should be designed for improved survivability so that, in the event of a casualty, persons can stay safely on board as the ship proceeds to port (IMO 2006). The new philosophy recognises that the regulatory framework will need to evolve to allow alternative designs and arrangements in lieu of the present day prescriptive regulation. To ensure the safety of persons on board a large cruise ship, crew size and equipment needs will have to take into account the geographical area in which the ship operates with particular concern about the search and rescue infrastructure. In 2004 the MSC recognised

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that the revised philosophy should apply to all passenger ships and the IMO renamed its work ‘Passenger Ship Safety’. The Maritime Safety Committee adopted a package of amendments to SOLAS in 2006, which entered into force in 2010. The amendments impact on all new passenger ships and will cover methods of prevention of a casualty, safe areas (sometime referred to a citadels), safe return to port, on board safety centres and regulatory flexibility. The key philosophy of the amendments is to ensure the initial prevention of a casualty. Modification to existing guidelines associated with navigational passage planning in remote areas, amendments to the STCW Code regarding engine room resource management and the provision of companies and training institutions with further guidance on advanced fire fighting techniques and damage control on large passenger ships have been undertaken. The issue of evacuation of persons from large passenger ship is a serious operational problem particularly on cruise ships which often have an elderly passenger complement. The second principle guiding the development of passenger ship safety is a recognition that the ship is its own best lifeboat. New concepts of casualty thresholds and safe areas have been incorporated into the SOLAS Convention. The casualty threshold establishes the extent of damage a ship should be designed to withstand which will allow the ship to return to the nearest port under its own power. For example a casualty threshold would state that ‘essential systems remain operational in the event of one of the main vertical zones being made unserviceable due to fire’. The concept of a safe area requires there to be an area on board the ship to which the crew and passenger could go whilst the ship moves to the nearest port. The safe area will need to provide basic services for persons, such as water and medical support. The safe return to port requires that a passenger ship is designed to be capable of returning to port after fire or flooding damage has rendered a space or watertight compartment a complete loss. In order to return to port a range of systems must remain operational, such as the propulsion system, the steering and navigational systems, internal and external communications, fire fighting and damage control systems. Ships will establish a safety centre, positioned on or adjacent to the bridge designed to support the management of emergency situations. The safety centre will allow the operation and control of safety systems including; powered ventilation systems, fire doors, public address systems, watertight doors, fire detection and alarm systems, fire pumps and television surveillance. The Marine Safety Committee of the IMO also agreed that there should be regulatory flexibility. It believes that moving away from prescriptive regulations will allow new concepts and technologies to be incorporated into the safety design of passenger ships. The attraction of cruising for many passengers is the opportunity to visit remote areas of the world. This creates problems in an emergency situation where the search and rescue capability in the area may be severely limited. Other areas covered included voyage planning in remote areas and equipping ships with a capability to recover people from survival craft.

7.6 Classification societies and safety Alongside the statutory framework concerned with safety, Classification Societies provide technical rules and standards to which ships are built. The standards are published as 119

‘Classification Society Rules’. Ships are required to be built and maintained to established standards if they are to be entered into the Society. Whilst a Classification Society cannot guarantee the seaworthiness of a ship, a ship ‘in class’ can be commercially traded and seek insurance for hull and machinery cover.

7.7 Maritime pollution prevention – Overview The International Convention for the Prevention of Oil from Ships (MARPOL) developed from the International Convention for the Prevention of Pollution of the Sea by Oil (OILPOL) in 1954. MARPOL was adopted by IMO in 1973 and subsequently modified in 1978. It became known a MARPOL 73/78. Regulations covering the prevention and control of sources of pollution are contained in six annexes within the Convention. Other pollution prevention conventions established by IMO include; x x x x x x

International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (INTERVENTION) Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (LDC) International Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC) Protocol on Preparedness, Response and Co-operation to pollution Incidents by Hazardous and Noxious Substances, 2000 (HNS Protocol) International Convention on the Control of Harmful Anti-fouling Systems on Ships (AFS) International Convention for the Control and Management of Ships' Ballast Water and Sediments.

Sustainability addresses the way in which the human race considers how the natural resources of the planet can be maintained. A cruise ship operates in the natural environment. Its operation can influence the balance of that environment for example through the discharge and disposition of waste materials. Until recently, addressing the disposal of shipboard waste was little considered. The oceans were seen as being a cavernous mass into which the small amount of waste discharged or deposited from ships was insignificant. Time has moved on, ship sizes have increased, materials used have changed and communities have become knowledgeable about the damage which can be caused to the environment and ocean life. A cruise ship with a large population on board creates much waste. The treatment or banning of overboard discharge of waste is necessary to prevent damage to aquatic life and threats to human health. The ‘International Convention for the Prevention of Pollution from Ships 73/78’ is the principal international instrument used to reduce pollution and help to ensure a sustainable future. In the 1950s the shipping world was concerned with the potential pollution which could be caused by an oil spill. The International Convention for the Prevention of Pollution by Oil (OILPOL) was adopted in 1954 and came into force in 1958, the same year which saw the IMO established. The growth of world trade and the consequent growth in shipping activity, including the carriage of passengers, ensured that further aspects of pollution have had to be considered. 120

Today the MARPOL 1973/78 has six Annexes. The Annexes cover the Prevention of Pollution by Oil, the Control of Pollution of Noxious Liquid Substances, Regulations for the Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form, Prevention of Pollution by Sewage from Ships, Prevention of Pollution by Garbage from Ships and the Prevention of Air Pollution from Ships. 7.7.1 Prevention of oil pollution Regulations for the Prevention of Pollution by Oil are found in Annex 1 of MARPOL 73/78. The rules are ‘generally considered complete’ (Focus on IMO). Whilst many rules focus on requirements for oil tankers the risk of oil pollution from other ships, including cruise ships is not ignored. Cruise ships carry a large amount of bunker fuel. For example the bunker capacity of a cruise ship such as ‘Freedom of the Seas’ is 3,700 tonnes of heavy fuel oil and 250 tonnes of Diesel Oil (RINA 2006). Cruise ship can create oil pollution. Besides accidents, such as grounding or collision, a cruise ship can cause oil pollution in one of three other ways, namely by pumping oily engine room bilge water over the side, spillage of bunkers during loading and overfilling of tanks during routine transfer of oil about the ship required for stability and trim purposes. The rules are complicated. For example there is no complete ban on discharging oily water from bilges. In certain circumstance they can be discharged over the side. Annex 1 states how this can be accomplished …. ‘the oil content of the effluent without dilution shall not exceed 15 parts per million’ and ‘shall not be discharged less than 12 nautical miles from the nearest land. A ship of more than 10,000 gross tons will need to be ‘provided with oil filtering equipment, arrangements for an alarm and a system for automatically stopping a discharge if the oil content exceeds 15 parts per million’ (MARPOL 73/78). All ships greater than 400 gt are required to have a shipboard emergency plan which will describe the actions to be taken by persons on board in the event of an oil pollution incident. In addition to help control the discharge of oily wastes all ships greater than 400 gt are required to be provided with an ‘Oil Record Book’, in which a record of all oil movements are recorded. The Oil Record Book has to be properly kept as it can be inspected by a competent authority. Case Study 12 – Improper keeping of the Oil Record Book In 1998 and 1999, the Royal Caribbean Cruise Line company was fined US$ 9 million because one of its ships, the ‘Sovereign of the Seas’ repeatedly dumped oily waste into the ocean and tried to hide this using false records, including fake piping diagrams. 7.7.2 Harmful substances carried at sea in packaged form Harmful substances in packaged form are carried on board cruise ships. They include items such as photo processing chemicals, dry cleaning material and paint. Annex 3 of MARPOL covers the carriage of such substances including matters such as marking, labelling and stowage. It is also recognised that waste created by the use of such substances will have to be disposed of effectively. The jettisoning of harmful substances carried in packaged form is prohibited except when the safety of the ship or saving life at sea is threatened. 121

7.7.3 Prevention of pollution by sewage from ships Sewage disposal from ships is covered in Annex 4 of MARPOL 73/78. For obvious reason this is a major issue for the cruise ship and it’s supporting infrastructure. Three types of sewage are considered namely ‘black water’, that is material flushed through the toilet system, ‘grey water’ that is waste water from showers, sinks, laundry and on board cleaning activities and ‘sewage sludge’. The scale of the challenge can be recognised by the fact that according to Friends of the Earth in their publication ‘Getting a Grip on Cruise Ship Pollution’ (Klein 2009). The author suggests that on a daily basis an individual creates 8 gallon of ‘black water’ and 90 gallons of ‘grey water’. For a large cruise ship such as ‘Freedom of the Seas’ which has accommodation for 4,400 passenger and 1,900 crew the cumulative total of grey water and black water created on board amounts to more than 600,000 gallons per day or 4.3 million gallons on a one week cruise. Direct disposal over the side is not appropriate as black or grey water will contain ‘harmful bacteria, pathogens, disease, intestinal parasites and harmful nutrients’. They can cause contamination to life in the sea. The discharge of sewage is prohibited unless it is ‘comminuted and disinfected by an approved system and takes place more than 4 miles from the nearest land’ or if not comminuted or disinfected it has to be discharged not less than 12 miles from land when the ship is enroute and proceeding at speed of not less than 4 knots. The United States Clean Water Act requires that cruise ships are equipped with Marine Sanitation Devices (MSD), which break up and biologically disinfect sewage waste before discharge. Due to the sensitivity of some of the areas visited by cruise ships (such as Alaska) Advanced Wastewater Treatment Systems (AWTS) are required. The AWTS on board ‘Oasis of the Seas’ is twice as effective as that required by US standards (RCCL 2009). In addition the owners of ‘Oasis of the Seas’ the Royal Caribbean Cruise Line self regulates and does not permit any discharge of sewage waste to within 12 mile of the coast. AWTS are a major improvement and produce what is called “drinking water quality”. Sewage sludge is eitherdumped at sea, dewatered and incinerated on board, or held on board and off loaded for treatment ashore. Case Study 13 – Wastewater Quality. The State of Alaska is very active in ensuring that cruise ships do not pollute their waters. During 2009, 66 violations of wastewater discharge limits by cruise ships were recorded by the Alaskan authorities. Each violation was liable to fine up to $100,000, not an insignificant sum (Klein R 2009). Coastal States are increasingly taking an interest in the protection of their coastlines from inadequate wastewater disposal. They are not averse to throwing the book at violators. 7.7.4 Prevention of pollution by garbage from ships Annex Five, of MARPOL 73/78 states that the term garbage covers ‘all kinds of victual, domestic and operational waste, excluding fresh fish, generated during the normal 122

operation of the ship and liable to be disposed of continuously or periodically’. An average cruise ship passenger will generate two pounds of non hazardous waste each day. This has to be disposed with. The Annex prohibits the disposal of plastics, including synthetic ropes, plastic garbage bags and incinerator ash from plastic products. It also places restrictions on the disposal of other forms of garbage. Case Study 14 Throwing Plastic Bags overboard In October 1991 passengers observed 20 plastic bags filled with garbage being thrown over the side of the cruise ship ‘Regal Princess’ when she was off Florida Keys. Princes Cruises was fined $500,000. The scale of fine was extreme but resulted in the cruise ship industry taking the issue seriously. The regulations are present for reason. Plastic does not biodegrade, it simply degrades into smaller molecular sized pieces. Molecular sized plastic pieces float within the oceans and seas and are picked up by amphipods, such a barnacles and lugworms, thereby entering the food chain. Certain garbage can be disposed of into the sea, but distance limits from the shore are set. For example the dumping of lining and packing material is prohibited less than 25 miles from land. The dumping of food waste, and all other garbage including paper product, rags, glass, metal, bottles and similar refuse is prohibited within 12 miles of land. There are ‘special areas’ where more stringent rules apply, such as in the Mediterranean Sea, Baltic Sea, Caribbean and Arctic areas. To ensure a cleaner environment MARPOL 73 /78 requires each country which is party to the MARPOL Convention to provide port facilities for the reception of garbage. To help ensure that garbage is disposed of correctly all ships greater than 400 gt and certified to carry more than 15 passengers are required to have a garbage management plan. In addition a Garbage Record has to be maintained. Cruise ships will dispose of the garbage they create by incineration or compaction. Compacted garbage will be stored on board prior to disposal ashore. 7.7.5 Prevention of air pollution from ships The final Annex in MARPOL is concerned with preventing air pollution from ships. For the cruise ship industry this concerns emissions from main and auxiliary engines and from shipboard incinerators. The burning of Heavy Fuel Oil in the ship’s main engines and the emissions produced are a particular problem with respect to climate change. Ship Emissions contribute significantly to harmful air pollutants. In 2007 about 369 million tonnes of marine fuel was used by ships. It is estimated that shipping creates 9% of global sulphur oxide pollution and more than 4% of all CO2 pollution. (Allen R 2009) MARPOL Annex 6 establishes a range of regulations concerned with the control of shipboard emissions covering those from main engines, auxiliaries and incinerators. It provides quality minimum standards for marine fuel. The regulatory framework is encouraging further improvements. In Europe emission controls in November 2007 set limits to the sulphur content of ships bunker fuel at 4.5 % m/m but by 2020 this will be reduced to 0.5% m/m. 123

7.8 Conclusion The paper has attempted to provide an overview of the safety and environmental environment associated with the operation of cruise ships. As the size and numbers of cruise ships grow, the challenges to shore and ship management and the regulatory authorities increases. Regardless of the form and style of the regulatory regime there will continue to be incidents where lives and the environment are put at risk. There is much activity within the international shipping industry aimed at reducing the risks which the cruise ship sector is exposed to. However siren voices can be heard expressing concern about the replacement of prescriptive regulation by greater flexibility and the risk that such an approach to safety ‘has on the potential to reduce existing requirements‘ (Nautilus 2007).

7.9 References. x x x x x x x x

x x x x

x x x x 124

Allen, R. (2009). ‘Technologies to Address Air Pollution from Ships’. World Maritime Day presentation, University of Plymouth, 2009. British Wreck Commissioner’s Inquiry Report. (2007). Titanic Inquiry Project. Available Jan 2010 at http://www.titanicinquiry.org/BOTInq/BOTReport/BOTRepBOT.php. Crainer, S. (1993). ‘Zeebrugge: Learning from Disaster’. Herald Charitable Trust. C6 p 71. ISBN 0 9519995 0 8. Fairplay Online News. (2009). ‘It’s the Economy Stupid - Long Term Prospects for Cruise are Bright’. Available Jan 2010 at http://www.fairplay.co.uk. Gibson, P. (2006). ‘Cruise Operations Management’. Burlington: Butterworth Heinemann. ISBN 13 978 0 7506 7835 3. GotoMarine. (2011). ‘SOLAS Approved Liferaft Costs et al’. Available Jan 2010 at http://www.GotoMarine.com. IMO. (1998). ‘SOLAS - the International Convention for the Safety of Life at Sea 1974’. Focus on IMO, October 1998. IMO. (2006). ‘Larger Ships, New Safety Challenges’. IMO. Maritime Safety Committee. 81st Session. Available Jan 2010 at htttp://www.imo.org/newsroom/indexasp? tipoc_id473. IMO Convention. (1948). ‘IMO Convention on the International Maritime Organization’, Article 1A. available at http://www.imo.org/About/Pages/Default.aspx#2 . Klein, R. (2009). ‘Getting a Grip on Cruise Ship Pollution’. Friends of the Earth. Dec. 2009. Lloyd’s Register – Fairplay. (2006). ‘World Fleet Statistics 2006’. ISBN 978 – 190129093 6. Marine Log. (2005). ‘Steady as She Grows: Number of Annual Cruise Passengers to Double by 2020.’ Marine Log. June 2005. available at www.allbusines.com/ transportation MARPOL 73/78. (1978). Annex 1. Regulation 9 and Regulation 20. IMO ISBN 92 801 5125 8. MIA. (1906). Marine Insurance Act 1906. Section 1 ‘Marine Insurance Defined’. Nautilus. (2007). ‘Wake Up Calls on Cruiseship Safety’. Nautilus Telegraph p2. June 2007. Ocean Shipping Consultants. (2005). ‘The World Cruise Industry to 2020’. Marine Log

x x x x x x x

June 2005. O’Neil, W. A. (2000). ‘Conference on Safety of Large Passenger Ships’. IMO May 2000. RCCL. (2009) ‘Royal Caribbean International Debuts Next Level of Environmental and Safety Features’. Oasis of the Seas Environmental & Safety. Media Contacts. Royal Caribbean Cruise Line. RINA. (2007). ‘Significant Ships of 2006’. Royal Institute of Naval Architects. p57. ISBN 0 905040 30X. SOLAS. (1974). Chapter 5. Regulation13. Manning. IMO. Titanic (1998) Film. Twentieth Century Fox and Paramount Pictures. Williams, D. L. (2009) ‘A Dictionary of Passenger Ship Disasters’ Ian Allan Publishing. ISBN 978 - 07110 3359 7.

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8.0

Safety perceptions in the cruise sector: A Grounded Theory approach

Margret Cordesmeyer Bournemouth University Bournemouth, UK Alexis Papathanassis Institute of Maritime Tourism Bremerhaven University of Applied Sciences Bremerhaven, Germany

Abstract A study undertaken by the Florida-Caribbean Cruise Association (FCCA) revealed that cruises are perceived as relatively safe in comparison to other holiday alternatives; especially by those who have already been on a cruise. The ‘safe’ image of cruises is promoted by the industry due to its importance for a care-free holiday experience and is arguably a key selling proposition for tour operators in general. Nevertheless, and possibly as a result of this, safety and well-being during holidays are underrated issues in tourism research (Bentley & Page, 2008). Over the last decade, the continuous growth of the cruise industry has been characterised by increasing capacities and the accompanied motivation of attracting new target groups. It could be asserted reasonably that larger vessels, increasing passenger volumes, new itineraries and new customer groups are accompanied by a new, somewhat amplified, safety-related risk environment; actual as well as perceived. The increasing significance of personal safety in the cruise industry calls for a better understanding of safety-related human behaviour and perceptions in this context. Hence, the aim of this paper is to explore and identify the factors influencing cruisers’ behaviour and perceptions with regard to safety. In order to construct a tentative model of safety perception determinants, a Grounded Theory (abbr. GT - Glaser & Strauss, 1967) approach was adopted. A total of eight GT interviews were conducted, involving a diverse group of respondents. Our research suggests that there are three types of factors influencing individual cruisers’ perceptions of safety: (1) destination-related perceptions (incident awareness, cultural familiarity); (2) visual cues (security personnel, security procedures); and (3) individual characteristics (travelling experience, personality traits). Apart from constructing a tentative model to facilitate further empirical work, our research reveals that safety perceptions in the cruise sector primarily concern visited destinations, rather than the vessel itself. Our findings suggest that the philosophy and scope of cruise operators’ conventional security policies and practices require reconsideration. Keywords: Safety, Cruise Sector, Perception, Grounded Theory

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_8, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

8.1 Background & objectives As of January 1st, 2004, there were 339 active oceanic cruise liners operating around the world (Herbert-Burns et al., 2009) and the continuous growth of the cruise industry over the last decade has shown that vessels also becoming larger in size and capacity. In 2008, the Florida-Caribbean Cruise Association (FCCA) undertook a study in which it was stated that cruisers are more likely than non-cruisers to consider cruising in comparison to other vacations as being safe. A potential explanation might be related to the perception that cruise ships tend to disguise risks connected to specific destinations or negative aspects on board, due to the arranged feeling of being at home for the vacationer. But a cruise ship is considered a microcosm of the larger society and therefore the problems that are common on land also follow onto the seas (Klein, 2002). Irrespective of this perception being valid, the cruise sector is faced with the issue of safety and security. In spite of their relevance, safety and well-being are under-rated issues in tourism research (Bentley & Page, 2008), rendering the perception of safety a topic meriting research. Understanding when and where holiday-makers feel secure and identifying the factors that influence specific behaviour and perceptions requires an in-depth understanding of tourists’ perceptions of risk, fear, trust and safety. This involves an exploration of cognitive and affective processes, calling for a qualitative approach. In this respect, Grounded Theory has been selected in order to reveal a theory about the chosen field of research. Grounded Theory evolves from collected data and is a “systematic, qualitative process used to generate a theory that explains, at a broad conceptual level, […] an interaction about a substantive topic” (Creswell, 2002: 592). This approach may seem an unconventional way of research, since it does not begin with a literature review of the chosen topic. Referring to literature is a rather iterative process taking place parallel to data analysis and aims at supporting findings. Therefore, Grounded Theory begins with discovering an unnoticed area to investigate (Moghaddam, 2006). The perception of safety has been analysed by many researchers in the field of tourism but not yet in the cruise industry. Literature on cruise ship safety is limited to regulations concerning safety of life at sea (SOLAS), or the international ship and port facility security code (ISPS), which could be considered to be more the ‘hardware’. The authors have chosen to look into the psychology of cruise passengers, which could be seen as the ‘software’ of safety. Namely, how feelings and emotions of people being on holiday influence the perception of being safe. Larsen et al. (2009) undertook a study on tourists’ worries. Since being a tourist represents a certain degree of unpredictability, this study suggests that worry may also be present in tourists and in tourism. Lepp and Gibson (2003) argue that risk factors in tourism concern various hazards, including dangers such as those related to, for example, political instability of the area visited, terrorism, strange food, cultural barriers and crime. While these hazards may negatively affect public perception of various destinations, tourists do not necessarily 128

worry about these risks (Larsen et al., 2009). Worry is therefore not synonymous to risk perception. Risk is defined by Brun (1994) as the probability of certain adverse incidents times the magnitude of their consequences, whereas subjective risk is the intuitive individual perceptions of these factors. Trust could be divided into cognitive and affective trust. Affective trust is the foundation of trusting and defined as the confidence one places in a partner or situation on the basis of feelings generated by the level of care and concern the partner demonstrates (JohnsonGeorge and Swap, 1982; Rempel et al., 1985). It is characterised by feelings of security and perceived strength of the relationship. Cognitive trust on the other hand is defined as the customer’s confidence or willingness to rely on a service provider’s competence and reliability (Moorman et al., 1992; Rempel et al., 1985). Lepp and Gibson (2003) have evaluated in their study the tourist role, perception of risk and destination choice in terms of sensation seeking. It is pointed out that Plog identified personality types of tourists on a continuum from psychocentrics or dependables (who tend to be more nervous, non adventurous and travelled less frequently) to allocentrics or venturers (who travel extensively and tend to be adventurous and more spontaneous in their tourism choices) (Plog 1995). It is therefore to be presumed that the personality of the traveller plays an important role in safety perception. Sumarising, it could be argued that the feeling of safety stems from the various levels of perceived trust and risk. If perceived risk can be calculated by the vacationer and therefore reduced to a minimum, trust increases and the feeling of safety ensues.

8.2 Research methodology 8.2.1 Rationale of Grounded Theory The methodology chosen in this explorative-qualitative study is Grounded Theory. This method was developed by Glaser and Strauss (1967) to generate theory from data. It is a qualitative research method that uses a systematic set of procedures to develop an inductively derived Grounded Theory about a phenomenon (Strauss & Corbin, 1990). There are three distinct overlapping processes of analysis in Grounded Theory from which sampling procedures are typically derived: open coding, axial coding and selective coding. Open coding is based on the concept of data being ‘cracked open’ as a result of identifying relevant categories. Axial coding is used when categories are in an advanced stage of development, and selective coding is used when the core category correlating with all other categories is identified forming the theory (Davidson, 2002). Open coding in the context of Grounded Theory is the process of breaking down data into separate units of meaning (Goulding, 1999). The purpose is to conceptualise and label 129

collected data. The coding in this stage is rather unfocused and open. The codebook which will be explained in the following section was a tool for structuring this open coding. The process starts with line-by-line open coding of the data to identify substantive codes emergent within the data including a set of questions: x x x x x

What is this data a study of? What category does this incident indicate? What is actually happening in the data? What is the main concern being faced by the participants? What accounts for the continual resolving of this concern?

These questions keep the analyst theoretically sensitive when analysing, collecting and coding data (Glaser, 2004). Open coding also allows seeing the direction in which to take the research by theoretical sampling becoming selective and focused on particular problems (Glaser, 2004). Through systematic analysis and constant comparison of data, the next phase is to reduce the number of codes identified in the open coding and to collect them together in a way that shows a relationship among them. This stage is known as axial coding and relates to the creation of concepts. Once a concept has been identified, its characteristics may be explored in depth and finally all data is summarised into a core category (Moghaddam, 2006). The final stage of data analysis is selective coding. Glaser and Holton (2004) explain selective coding as the act of concluding open coding and then to delimit coding to only those variables that relate to the core variable in sufficiently significant ways as to produce a parsimonious theory. The authors state that selective coding begins only after the analyst is sure to have discovered the core variable. Grounded Theory is conducted in the present study because safety in tourism and specifically in the cruise sector is a novel, insufficiently researched topic. Semi-structured interviews have been transcribed to facilitate transparency and to enable analysis and interpretation. During the analysis of an interview, codes and concepts are identified (open coding). These codes are then linked to other, thematically-related interviews in order to develop categories referring to conspicuous remarks or differences of the collected data. After saturation of data collection the defined codes is structured and linked leading to the creation of referring categories (axial coding). Finally the core concept for theory creation will be revealed (selective coding). Selecting a sufficiently intense and diverse sample of participants is particularly important in order to ensure information richness. Within Grounded Theory it is not the participants who are sampled but the incidents and events they describe. Therefore, respondents were chosen on the basis of their travelling experience and cruise knowledge. In this initial stage of Grounded Theory the conducted interviews are broken down into separate units of 130

meaning (Goulding, 1999). These are compared with other interviews and concepts to reveal similarities, differences and interconnections. The purpose of memos is to describe and document the situation of a particular event and connect it with all possible interpretations. 8.2.2 Codebook “Coding is supposed to be data reduction not proliferation” (Miles, 1979: 593 - 594). A codebook therefore simplifies the evaluation of conducted interviews and makes the axial and selective coding easier to structure. It is used during the interviews when codes are iterating. The codebook structure has three basic components: the code, a brief definition and a full definition 8.2.3 Interviews & sampling In order to collect data, semi-structured, open-end interviews were conducted. Semistructured interviews differ from unstructured interviews in that the former have a flexible agenda or list of themes to focus the interview, although between interviews with different participants the order of discussion will vary (Ritchie et al., 2005). An open-ended interview started with a general question concerning the topic of safety during holidays and cruises (dependent on the interviewee) followed by a set of sub-questions. The form of interviewing is characterised by a conversation-like style and is semi-emergent design (Ritchie et al., 2005). Eight interviews have been conducted in the period of one month (May 2009). The people interviewed consisted of persons with varying family and occupational backgrounds. Students were asked, as well as mid-aged employed persons. Experience in the cruise sector was a decisive factor for being chosen as a participant of this study. In this connection it was of secondary importance whether the participant gained these through cruises for personal pleasure or if he or she had worked on board. On-board experiences were equally important as shore side experiences for a port agent and a participant who was in charge of human resources on board. These different viewpoints made it possible to create interconnections between certain topics that were iterated throughout the interviews. As mentioned, these interviews were semi-structured and included a major question regarding the experiences of the interviewee. Further backup questions concerning the topic of safety on holiday were prepared as to avoid a superficial and poor outcome of the interview. Furthermore these open-ended interviewing was adopted in order to minimise interviewer bias. The interviews were conducted in German and documented in English. All interview participants provided their permission to use the material for this paper. In May 2009 eight interviews were conducted with an average length of thirty minutes each. 131

Interview # 1

Age

Gender

Occupation

Experience

23

Female

Student

2

27

Female

Tour Guide

3

26

Male

Port Agent

4

23

Female

Student

5

29

Female

6

31

Male

7

39

Male

Shore excursion on board Corporate Strategy & Infrastructure, Shipping GmbH HR water and shipping authority, former soldier

Backpacking, 10 cruises as passenger 2 contracts as tour guide, cruises for personal holiday 2 years as port agent, cruises for personal holiday Backpacker / international hostess on board Cruises all over the world

8

28

Female

Dentist

6 months on different cruise ships HR for deck & engine department safety and security issues on board Several cruises as passenger

remarkable destinations Indonesia Caribbean, Egypt, Europe America, Europe, Canaries, Bahamas Africa, Morocco, Europe, America Egypt, Caribbean Sea, Europe Mainly Caribbean Sea none

Egypt, Europe

Figure 8a: Interviewee Sample Data

8.3

Open coding

At this stage of the study, determining factors influencing the perception of safety in the cruise sector were identified. As interviews were open-ended, it was surprising that every participant, when asked on their experiences with safety during a cruise, associated safety not with the cruise ship itself, but with destinations. Saturation was reached when the interviews followed a certain pattern when applying open codes. Personality of the traveller, the attitude towards travelling and experience form one category. Culture, including behaviour of natives towards tourists is also a determining factor when it comes to safety perception. Furthermore, being in a group is a decisive factor for feeling safe in a foreign culture. As predominantly female participants emphasised this aspect it is suggested that gender is an aspect worth considering. Visual safety is a topic that repeatedly emerged during the interviews, but here the opinions varied. Security measures such as security checks or increased security personnel cause either a feeling of safety or, if visual safety is perceived as ‘too much’, it seems to cause a feeling of uncertainty. Finding the balance of visual safety is a further decisive aspect when considering the individual 132

perception of safety. Figure 8b (below) summarises all open codes generated by the interviews. These codes will be used as a basis for axial coding. Interview # 1

Interview # 2

The perception of a natural disaster Personality of traveller Mentality and different culture Travelling in a group vs. alone Kidnapping and diseases Local tour guides vs. ship guides Laws and Regulations

Visual safety Mentality / cultural differences Reflection on tour guide Personality of traveller/ Attitude Groups vs. Alone Local food / hygiene Ignorance Poverty Terrorism and disease Interview # 4

Interview # 3 Sequence of security procedures Responsibilities of security Visual safety Personality of traveller/ Attitude Mentality/ cultural differences Destination as deterrent factor and piracy Religion Diseases and hygiene Similarity to home culture Groups Trust Interview # 5

Violence / crime & Imprudence Ingenuousness Diseases Inexperience Terrorism Groups vs. Alone Mentality / cultural differences Piracy Rural regions vs. mass tourism destinations Safety measures Preparation before the trip Interview # 6

Tourist police Hygiene Groups vs. Alone Mentality/ cultural differences Getting lost Terrorism Water side is safe side Safety perception on board Personality of traveller/ Attitude Piracy Trust in cruise operator Interview # 7

Safety personnel on board Safety instructions for crew Vessel as source of danger Balance of visual safety Security checks seen as disruptive Experience influence safety perception

Interview # 8

Terrorist attack Ignorance Group vs. Alone Security standards of vehicles Disease Poverty vs. Wealth Experience Consuetude

Obtrusiveness Isolation of passengers Aggressive personnel causes fear Vehicles and taxi drivers cause fear Increased security during cruise visits Safety perception on board Fear of crime Official warnings

Figure 8b: Summary of Open Codes 133

8.3.1 Axial & selective coding Axial coding is the second phase of Grounded Theory. Open codes are subsequently reduced and organised in a way that shows the relationships between them. This corresponds to the creation of concepts that highlight hypothetical relationships between categories and subcategories. Axial coding forms the basis for the creation of the theory (Moghaddam, 2006) and abstracts concepts to extract theoretical meanings. Selective coding as the final stage can be described as the process by which categories are related to the core category ultimately creating a grounded theory (Babchuk, 1997). The codebook and open coding section were used as the foundation for axial and selective coding. An adaptation of the framework proposed by Borgatti (2008) was utilised, combining axial and selective coding in a single table (Figure 8c). All open codes were arranged according to subject areas which were described in the causality and consequence columns. Subcategories were identified, named axial codes as well as the core category using the selective code. The large amount of open codes repeatedly occurring throughout data collection, were reduced to axial codes in order to identify the core category. In this case the researchers identified three relevant codes, linked strongly to each other. These codes in combination with the core category provide the grounding for the theory.

8.4 Literature review While it may seem unconventional to find a literature review after the analysis section for most research publications, for the chosen methodology of Grounded Theory this is appropriate. Its intention is to generate a theory about an unnoticed and unexplored field of research. Hence, little or no literature is to be found about perceptions of safety in the cruise sector. After data collection and its interpretation, the authors identified criteria that influence this perception. The literature review enriches and seeks to validate those criteria. Safety and well-being are significantly under-rated issues in tourism research (Bentley & Page, 2008), but in recent years researchers have become interested in the relationship between tourism and potential dangers for tourists. Much of the relevant research focuses on whether crime and safety problems at a tourist destination have an impact on tourism demand, and whether the tourism industry encourages criminal activity (George, 2003). Researchers have not considered the perceptions and attitudes of cruise passengers and crew concerning safety. Hence, it is important to evaluate other researchers’ studies in other disciplines researching human behaviour influencing the perception of risk, safety or destination choices. Howard (2009), in his study about dangers to tourists, postulates that research studies on tourism dangers have mostly focused on such standard ones such as accidents and crimes, covered by travel insurance and often reported in statistics. 134

Open Codes

Cruise tourists perceive external factors differently, but they influence the individual perception of safety

Safety and security measures provided on board and shore side are perceived differently. Important is the balance between enough safety and ‘too much’.

There is a point where ‘too much’ safety and security measures cause discomfort and are perceived negatively

Individual experiences and personality characteristics influence the perception of safety

Perceived safety is dependent on individual experiences gained during travelling

Unknown norms and behaviour cause an uncertainty feeling sometimes resulting in fear

Group

Selective Code

External factors

Cultural differences

Actual Safety & Security

Personality Traits

The occurrence of not-influenceable situations can be either a cause of fear or does not disturb the tourist depending on the personality Behaviour from locals towards tourists as well as cultural aspects that differ from home cultures influence cruisers mostly negatively

Axial Codes

Visual Cues

Mentality/ cultural differences Local food Hygiene Poverty Obtrusiveness Poverty vs. Wealth Religion Laws and regulations Tourist police Responsibilities of security Visual safety Safety measures Sequence of security procedures Safety personnel on board Increased security during cruise visits Safety instructions for crew Vessel as source of danger Consuetude Inexperience Experience Safety perception on board Trust in cruise operator Isolation of passengers Rural regions vs. mass tourism destinations Water side = safe side

Consequence

Destination-related Perception

Natural disaster Disease Terrorism Destination Piracy Kidnapping

Causality

Perceived Safety

135

Attitude and characteristics of tourists affect safety perception individually Tourists seem to like knowledge about destinations to reduce risk.

Tourists’ fear are dependent on experience, gender and individual traits

Safety perception is dependent on individual’s traits

Informed tourists who have informed themselves are more likely to have a lower fear level than uninformed tourists Causes for fear differ individually and influence therefore the perception of safety differently.

Traits

Uncertainty Avoidance

Anxiety Perception

Individual Characteristics

Ignorance Security checks seen as disruptive Ingenuousness Imprudence Preparation before the trip Official warnings by the department of foreign affairs Similarity to home culture Violence Security standards of vehicles Local guides vs. ship guides Group vs. Alone Reflection on tour guide Getting lost Aggressive personnel causes fear Vehicles + taxi drivers cause fear

Fear of crime Figure 8c: Open, Axial and Selective Coding (Adopted from Borgatti, 2008) Such dangers vary greatly in severity, ranging from those causing death and severe injury to those inducing some discomfort, such as minor theft and mild food poisoning. Lonely Planet guidebooks distinguish between “dangers” and “annoyances”. Some examples of “annoyances” are very persistent touts, very unfriendly locals, seeing negative impacts of tourism in a locale, and the offensive behaviour of some other tourists, exactly those identified by this present study. In their recent study about perceived travel risks, Rittichainuwat and Chakraborty (2009) argue that the perception of safety and security is a major determinant in travellers’ decision to visit a place (Beirmanm 2003). Mitchell and Vasso (1997) and Irvine and Anderson (2006) found that it is risk perception, rather than facts or actual risk circumstances, that influences tourists’ behaviour to avoid or cancel travel to a particular destination. In general, tourists make their travel decisions based on perceptions rather than reality (Roehl & Fesenmaier, 1992); meaning that actual risks may differ from the perceived ones. Nevertheless, while people state that safety is important to them, this does not always influence their decisions about visiting a particular destination. Some tourists may judge specific destinations as risky, without worrying about travelling to these destinations, while other tourists judge the same destinations as not very risky, but still worry about visiting those (Larsen et al., 2009). 136

The differentiation between tourists’ worries and risk perception is evaluated in the study of Larsen et al. (2009). They take as a starting point that since being a tourist represents a certain degree of unpredictability, worry may also be present. Lepp and Gibson (2003) identified that risk factors in tourism concern various hazards, including dangers such as those related to political instability of the area visited, terrorism, strange food, cultural barriers and crime. While these hazards may give rise to people’s judgements of various destinations as risky, tourists do not necessarily worry about these risks (Larsen et al., 2009). The results of the present study support Larsen’s findings and provide a starting point to explain, for example, why cruise passengers travel to politically unstable destinations. In addition, Tasci and Gartner (2007) state that news reports and word-of-mouth information about epidemics and terrorism at tourist destinations raise consumers’ perceptions of risk. Due to its high credibility and ability to reach large audiences in a short period of time, the media is particularly influential in changing people’s perceptions of a destination. Further, Cavlek (2002) argues, that when tourists lack knowledge about a destination, the media plays a major role in forming perceived risks about the affected destinations. Lund and Rundmo (2009), in their research paper on cross-cultural comparisons of traffic safety, risk perception, attitudes and behaviour, only partially confirm the findings of previous studies suggesting that people’s perception of risks is related to demographic variables such as gender and age. Personality was found to be of more importance than demographics. Lepp’s and Gibson’s (2008) study about tourist role, perception of risk and destination choice support this. The authors argue that one of the underdeveloped approaches to understanding tourist behaviour is the use of personality traits (Jackson et al, 2001). Previous attempts to understand why people choose different tourist roles and styles have offered “hints” that personality traits might be more influential than credited (Frew & Shaw, 1999; Jackson et al., 1999; Jackson et al., 2001; Madrigalm 1995; Nickerson & Ellis, 1991; Plog, 2004). As explored so far in the present study, personality traits influence the perception of safety in the cruise sector. Hence, it is obligatory to refer to Plog’s published concept of ‘venturesomeness’ (2004) in which he classifies tourists according to their personality traits. Interviews in Plog’s study were conducted with people with sufficient income to travel whenever and however they might choose, but this does not affect the characterisation of personality types. Plog distinguished primarily between two types of travellers. Tourists were originally labelled as psychocentrics to reflect the fact that so much of their personal energy focuses on the small events in their lives and restricts their psychic functioning, but then changed to dependables. Through a series of follow-on studies, it was possible to define the personality 137

at the opposite end of the spectrum. These individuals reach out and explore the world in all of its diversity. Self-confident and intellectually exploring, they measure low on all measures of persona anxiety. Originally called allocentrics to reflect their varied interest patterns, they were relabelled as venturers because of their tendency to venture forth and seek new experiences with eagerness and enthusiasm (Plog, 2004). Characterizations of dependables are as followed. Hence, dependable travellers: x x x x x x x x x

are somewhat intellectually restricted are more cautious and conservative in their daily lives are more restrictive in spending discretionary income prefer popular, well-known brands of consumer products (safe choices) face daily life with less self-confidence and lower activity levels often look to authority figures for guidance and direction in their lives are more passive and non-demanding in their daily lives like structure and routine in their relatively non-varying lifestyles prefer to be surrounded by friends and family

Personality traits identified for venturers: x x x x x x x x x

are intellectually curious and exploring make decisions quickly and easily spend discretionary income more readily like to choose new products shortly after introduction to the market face everyday life full of self-confidence and personal energy look to themselves, rather than authority figures, for guidance and direction are very active and relatively aggressive prefer a day filled with varying activities and challenges often prefer to be alone and somewhat meditative

The research studies presented refer to findings and phenomena occurring in the present study. As human behaviour and perceptions of risk and fear play a major role, the next section in which results are discussed, will take on other researchers findings to compare and support the Grounded Theory.

8.5 Discussion of findings The following section discusses the interrelated variable groups, identified as selective codes. Referring to the initial research objective of identifying factors influencing the perception of safety in the cruise sector, the analysis revealed a number of core categories relevant for understanding tourists’ behaviour concerning safety perception. Notwithstanding that all identified three core categories are elementary for safety perception; it seems that one of them is more influencing than the two others. Before 138

presenting the theory, it is fundamental to discuss those core categories and how they are linked to each other. The conceptualization constitutes an interpretative approach based upon the participants’ experiences. 8.5.1 Destination-related perception Tourists’ perceptions of safety in the cruise sector are affected by external factors and cultural differences identified as axial codes. The former are non-influenceable incidents such as natural disasters, terrorism, piracy, infectious diseases and kidnapping that were mentioned by the participants. Cultural differences comprise of local food, hygiene, poverty, obtrusiveness of locals towards cruise passengers, religion, laws and regulations that are mostly site related. While external factors were mentioned, cultural differences appeared to affect the tourists more in their safety perception. Particularly mentioned was the behaviour of locals towards cruise passengers. The interviews revealed that the behaviour towards tourists is strongly related to the perception of safety. When natives welcome tourists, they are more likely to feel safe than in destinations where locals are unfriendly and rude towards tourists. This is supported by Doxey’s irridex model of stress relative to tourism development (1975): Stages Characteristics 1 Euphoria 2 Apathy 3 Irrigation

Indication Visitors are welcomed, little formal development Visitors are taken for granted, commercialism Natives become concerned about tourism, infrastructure improvements 4 Antagonism Hostility shown towards tourists, attempts made to limit damage and tourism flows Figure 8d: Irridex model of stress relative to tourism development (adapted from Doxey, 1975) In the early phases of tourism development, locals are euphoric, pleased to see investment and improved job prospects for local people. The comparatively small number, and the fact that most tourists will belong to the ‘explorer’ category and accept the norms and values of the hosts, mean that tourists are welcomed, and even seen as ‘friends’. After this stage local people become used to the benefits they get from incoming tourism, and become aware of problems which tourism generates as it grows, so they come to accept it. Encounters with tourists become more common and more commercial. Further growth in tourism leads to a general feeling among locals that tourists are an irritant rather than a benefit, as they realise how tourism is changing the community and local norms. In the final stages, locals show open antagonism towards tourists, many of whom will have the attitude that locals are there to meet the tourists’ needs and will insist on western standards. Another factor Doxey mentions in his model is the important aspect of length of stay. Longer-stay tourists will accommodate better and be seen as making a more effective contribution to the local economy. Cruise passengers stay no longer than one or two days at one destination. Hence, 139

it is understandable that natives in destinations where huge vessels berth, and cruise tourism is highly developed, show antagonism when norms and culture are not respected. As mentioned in one interview, passengers as well as crew ignored the recommendation in Arabic countries not to wear short and tight cloths which annoyed local people. Another influencing factor is the destinations’ economic situation. As repeated in different interviews, poverty is an issue that influences the perception of individual’s safety dramatically. When poverty is predominant in the perception of a destination, tourists feel unsafe due to the fact that they are afraid of crime such as street robbery. A high degree of risk taking is equivalent to a high degree of unpredictability that both causes discomfort to the point of fear. 8.5.2 Visual cues Visual cues identified as category, consists of two major subcategories. Actual safety and security provided as well as the perceived safety that is individually depending on the personality of the tourist. Actual safety and security measures are those visible and invisible for the cruise passengers. On board cruise ships international regulations specify safety and security standards for the vessel itself and the crew. The general drill that has been conducted after twenty-four hours of debarkation for every cruise passenger is one of the few visible safety measures. Safety drills and regular safety instructions for every crew member are not consciously realized by cruise passengers. The sequence of security before entering the ship for example, mentioned by participant number three who worked as a port agent, measures are perceived as highly important and very secure for the passengers. That these measures would not prevent an unauthorized person going on board is only perceived secondarily. The difference between safety and security in terms of cruising is important to relate to. While safety is concerned with personal and life saving issues on board, security relates to everything shore side like security checks and precautions. Personal safety is a major concern for tourists. Thus, it is crucial to find a balance between actual safety and security and perceived safety. As identified by the conducted interviews, too much security, namely too many security guards or security checks are perceived negatively and cause uncertainty. What is noteworthy about the outcome of the conducted interviews is that all participants did not associate safety perception with the vessel itself. When asked about in which situations during a cruise they feel safe or unsafe, all interviewees directly related to the destinations rather than to experiences on board. It can therefore be inferred that the vessel itself is rather secondary when evaluating the perception of safety in the cruise sector. Interviews confirmed the presumption that a ship is not perceived as source of danger due to the fact that passengers are isolated in a hotel frame and separated from all nautical and 140

technical operations. Further, passengers are distracted by the size of the vessel and the entertainment programme that let the passengers in a way forget that they are on a ship. 8.5.3 Individual characteristics The conducted interviews and its analysis have shown that personality plays a major role in safety perception. Throughout the study it became apparent that the individual attitude, as well as experience is determinant in regard to the perception of safety. Three axial codes have been identified: traits, uncertainty avoidance and anxiety perception. The axial code ‘traits’ is traced back to the fact that interviewees act differently in certain situations based on their individuality. For example, it should be mentioned that one female participant acted imprudently by walking alone at night through the streets in a politically unstable destination such as South Africa, where crime is a widespread issue. This behaviour is ascribed to lack of knowledge and experience. Unlike this participant, there are those who try to avoid or reduce uncertainty in order to minimise risk on holiday. Those participants have mentioned information gathering before a trip or following the warnings and recommendations by the department of foreign affairs. Nevertheless, there are also travellers, who try to avoid uncertainty by choosing their cruise or holiday according to the similarity of the home culture. A cruise ship, on which the traveller’s mother tongue is the onboard language and where food is similar to what is known from home, is a determinant factor to feel safe on board, especially when the destinations are strange and unknown. Anxiety perception is dependent on individual’s traits, experience, and gender. Females seem to feel safer in a group than males for example. But in general, personality is the major factor influencing the perception of safety. The willingness of risk taking is dependent on the personality as well as safety perception. Leisure tourists are more prone to taking risks while on vacation or a cruise than local residents, and less likely to observe safety precautions. This is due to lack of understanding and awareness of local risks, and as a result of common belief that while on holiday nothing bad could happen to them. Thus, tourists present lucrative targets to criminals because they tend to carry excessive portable wealth and, as the interviews have clearly shown, ignore precautions (Mansfeld and Pizam, 2006). There are also different tourists who, in pursuit of risk-free travel, use a variety of securityrelated information sources to facilitate their destination behaviour. These traits are related to experienced travellers. Because this axial code has been evaluated as the most important, it has been selected as the core category that relates to all other categories. The next section deals with the theory development.

141

8.5.4 The core category and proposed framework As Glaser (2004) explains, the criteria for establishing the core variable within Grounded Theory are that it is central, relating to as many other categories as possible and accounting for a large proportion of the variation in a pattern of behaviour. The core variable reoccurs frequently in the data and comes to be seen as a stable pattern that is more and more related to other variables. As identified, personality traits are influencing the perception on safety most dramatically. Hence, it is related to all other identified categories and chosen as central category. Safety perceptions on board cruise ships or on holiday vary depending on the individual traveller. How external factors such as natural disasters or terrorism are perceived depends on the individual, as well as how cultural differences are seen. All evolved categories can be traced back to the identified core concept of personality traits and the following theory is the result of the present study: The perception of safety in the cruise sector and the closely related risk perception are primarily dependent on personality traits. Destination-related perception, visual cues and individual characteristics are secondary and perceived based on experience that shape individual’s traits towards travelling. The following illustration demonstrates the evolving theory and its interrelations to all categories. Cultural Differences

Actual Safety & Security

Traits

External Factors

Perceived Safety

Uncertainty Avoidance Anxiety Perception

Visual Cues Destination - related Perception

Individual Characteristics Personality Traits

Figure 8e: Integration of categories and subcategories 142

8.6 Conclusion The present research study revealed a theory about the perception of safety in the cruise sector. As methodology, Grounded Theory was utilised because the chosen field of research is unexplored lacks a clear scope and definition. While safety is still a significantly underrated issue in tourism research (Bentley, 2007) the relevance of the chosen topic is obvious. The objective was to evaluate safety perception during a cruise, irrespective the time on board or during the short stays at the destinations of an itinerary. In the first stage of the study, in-depth interviews were conducted with a focus group of eight participants. During the period of one month 8 interviews with an average length of thirty minutes were conducted. Those semi-structured, open-end interviews were analysed qualitatively, and subsequently interpreted. Open codes were identified, indicating the direction of the study. The participants did not associate safety with the cruise ship itself, but solely with destinations. Thus, the direction of the study went towards safety perception in various destinations rather than on board cruise ships. The second stage was meant to abstract the open codes in order to reveal meaningful themes and relationships among them. This process revealed various factors influencing the perception of safety. External factors such as natural disasters, terrorism, infectious diseases, piracy or the risk of kidnapping seem to have an effect on the individual’s perception of safety. Cultural differences can affect the traveller negatively depending on the behaviour of local residents towards the tourist. Site-related influences correspond to visual safety perception. Depending on the destination, tourists perceive security measures either as appropriate, which increases the individual’s safety feeling, or as inappropriate which causes a feeling of discomfort. Security measures in politically instable destinations where terrorist attacks happen frequently, for example Egypt, are welcomed mostly by tourists. Nonetheless increased and extraordinary precautions can also cause uncertainty and sometimes fear. Hence, it seems to be relevant for the perception of safety to find a balance between ‘enough’ visual security measures and ‘too many’. The most influencing factor is ‘individual characteristics’ which encapsulates character traits, uncertainty avoidance and anxiety perception. All previously identified categories are relating to personality. Therefore, in the last stage of the study, the core category evolved to be personality traits. Finalising the analysis and complementing it with a review of relevant literature a theory on the determinants of cruise-related safety perceptions is proposed.

8.7

Implications & further research

A constant criticism of qualitative methods is their inability to relate to aspects of the real world (Hammersley 1992). Nevertheless it is generally accepted that they have their own 143

internal logic and validity. To a certain degree, the process of interpreting and analysing the data reveals the researchers’ personal worldview, which may bias the data. A further bias of this research might be that interview participants were only German and it could therefore be argued, that this study reflects only the perception of Germans. In this regard it should be mentioned, that even though only German persons were interviewed, their experiences in the cruise industry is internationally based. Participants who worked on board cruise ships have experienced various nationalities of passengers and so, this bias is only partly valid. The fact that none of the participants associated safety issues with the cruise ship, but only with destinations visited during the cruise, is an issue worthy of further exploration. Finally, whether safety perception in the cruise sector depends primarily on personality traits or not needs further attention. Based on the findings and the proposed theory, the following research hypotheses could serve further quantitative research efforts: x

x x x x

H1: External factors (natural disasters, diseases, terrorism, piracy, kidnapping) influence the individual positively as well as negatively depending on the attitude towards travelling. H2: Cultural differences as cause of fear depend on gender, and experience. H3: Actual safety and security measures in the cruise sector are to some extent not visible to the cruise passenger and to some extent security shows. H4: Perceived safety depends on the tourist’s experience. H5: Personality traits influence the perception of safety and are dependent on how the individual copes with anxiety and uncertainty.

8.8 References x

x

x x x x x

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Babchuk, W.A. (1997). Glaser or Strauss: Grounded theory and adult education. Paper presented at the Midwest Research-to-Practice Conference in Adult, Continuing and Community Eductaion, Michigan State University, East Lansing, Michigan Beirman, D. (2003). United States: September 11, 2001 terrorist attack. The impact on American and global tourism. In D. Beirman (Ed.), Restoring tourism destinations in crisis: A strategic marketing approach (pp. 43-68). Oxon: CABI Publishing Bentley, T.A, Page, S.J. (2008). A decade of injury monitoring in the New Zealand adventure tourism sector: A summary risk analysis. Tourism Management 29, 857-869 Borgatti, S. (2008). Introduction to Grounded Theory. Available at: http://www. analytictech.com/mb870/introtoGT.html, Access Date: 15th June 2009 Brun, W. (1994). Risk perception: main issues, approaches and findings. In G. Wright & P. Ayton (Eds.), Subjective probability (pp. 295-320). Chichester: John Wiley & Sons Cavlek, N. (2002). Tour operators and destination safety. Journals of Tourism Research, 29(2), 478-496 Corbin, J. & Strauss, A. (2008). Basics of Qualitative Research 3e. Techniques and Procedures for Developing Grounded Theory. California: Sage Publications Inc

x x x

x

x x x

x x

x x x x

x

x x

Creswell, J. W. (2002). Educational research: Planning, conducting, and evaluating quantitative and qualitative research. New Jersey: Merrill Prentice Hall Davidson, A.L. (2002). Grounded Theory. Available at: http://www.essortment.com/all/ groundedtheory_rmnf.htm Access Date: 30th March 2009 Doxey, G. V. (1975). A causation theory of visitor-resident irritants: methodology and research inferences. Proceedings of the Travel Research Association Sixth Annual Conference, San Diego Florida Caribbean Cruise Association, FCCA (2008). Cruise Industry Overview 2008. Available at: http://www.f-cca.com/downloads/2008-Cruise-Industry-Overview.pdf Access Date: 25th January 2009 Frew, E. & Shaw, R. (1999). The relationship between personality, gender, and tourism behaviour. Tourism Management, 20, 193-202 George, R. (2003). Tourist’s perception of safety and security while visiting Cape Town. Tourism Management 24, 575-585 Glaser, B.G., Holton, J. (2004). Remodeling Grounded Theory. Forum Qualitative Social Research, Volume 5, No. 2, Art. 4. Available at: http://www.qualitative-research.net/fgs/ Access Date: 28th March 2009 Glaser, B.G., Strauss, A.L. (1967). The Discovery of Grounded Theory: Strategies for Qualitative Research. Chicago: Aldine Publishing Company Goulding, C. (1999). Grounded theory: Some reflections on paradigm, procedures and misconceptions. Working paper series, WP006/99, Wolverhampton: University of Wolverhampton. Available at: http://www.wlv.ac.uk/PDF/uwbs_WP006-99%20 Goulding.pdf Access Date: 14th May 2009 Hammersley, M. H. (1992). What’s wrong with ethnography? Routledge, London and New York. Herbert-Burns, R & Batemann, S & Lehr, P (2009). Lloyd’s MIU Handbook of Maritime Security. Florida, US: Auerbach Publications Howard, R.W. (2009). Risky business? Asking tourists what hazards they actually encountered in Thailand. Tourism Management, 30, 359-365 Irvine, W. & Anderson, A. R. (2006). The effect of disaster on peripheral tourism places and the disaffection of prospective visitors. In Y. Mansfeld, & A. Pizam (Eds.), Tourism, security & safety: From theory to practice (pp. 169-186). Oxford: ButterworthHeinemann Jackson, M., Schmierer, C., & White, G. (1999). Is there a unique tourist personality which is predictive of tourist behaviour? In J. Molloy, & J. Evans (Eds.), Tourism and hospitality: Delighting the senses (pp. 39-47). Canberra: Bureau of Tourism Research Jackson, M., White, G. & White, M. (2001). Developing a tourist personality typology. Proceedings of National Research Conference, Australia, 177-184 Johnson-George, C., Swap W. C. (1982). Measurement of specific interpersonal trust: construction and validation of a scale to assess trust in a specific other. J Pers Soc Psychol, 43 (6), 1306-17 145

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Klein, R.A. (2002). Cruise Ship Blues. Gabrioala Island, Canada: New Society Publishers Larsen, S., Brun, W. & Øgaard, T. (2009). What tourists worry about – Construction of a scale measuring tourist worries. Tourism Management, 30, 260-265 Lepp, A. & Gibson H. (2003). Tourist roles, perceived risk and international tourism. Annals of Tourism Research, 30, 606-624 Lund, I.O, Rundmo, T. (2009). Cross-cultural comparisons of traffic safety, risk perception, attitudes and behaviour. Safety Science, 47, 547 – 553 Madrigal, R. (1995). Personal values, traveller personality type, and leisure travel style. Journal of Leisure Research, 27, 125-142 Mansfeld, Y., Pizam, A. (2006). Tourism, Security and Safety. From Theory to Practice. Burlington, MA: Elsevier Butterworth-Heinemann Miles, M. B. (1979). Qualitative data as an attractive nuisance: The problem with analysis. Administrative Science Quaterly, 25, 590 – 601 Mitchell, V. W. & Vasso, V. (1997). Perceived risk and risk reductions in holiday purchase: a cross-cultural and gender analysis. Journal of Euromarketing, 6(3), 47-97 Moghaddam, A. (2006). Coding issues in grounded theory. Issues In Educational Research, 16(1), 52-66. Available at: http://www.iier.org.au/iier16/moghaddam.html Access Date: 27th March 2009 Moorman C., Zaltman G., Deshpande´ R. (1992). Relationship between providers and users of marketing research: the dynamics of trust within and between organizations. Journal of Marketing Research, 29(August), 314– 28. Nickerson, N., Ellis, G. (1991). Traveller types and activation theory: A comparison of two models. Journal of Travel Research, 29, 26-31 Plog, S. C: (1995). Vacation Places rated. Redondo Beach: Fielding Worldwide Plog, S. C. (2004). Leisure Travel, a marketing handbook. New Jersey: Pearson Education, Inc. Rempel J.K., Holmes J.G., Zanna M.P. (1985). Trust in close relationships. Journal of Personality and Social Psychology, 49(1), 95 – 112. Roehl, W.S., Fesenmaier, D.R. (1992). Risk perceptions and pleasure travel: an exploratory analysis. Journal of Travel Research, 2(4), 17-26 Ritchie, B.W. & Burns, P. & Palmer, C. (2005). Tourism Research Methods, Integrating Theory with Practice. Oxfordshire, UK: CABI Publishing Rittichainuwat, B.N., Chakraborty, G. (2009). Perceived travel risks regarding terrorism and disease: The case of Thailand. Tourism Management 30, 410-418 Strauss, A., Corbin J., (1990). Basics of qualitative research: Grounded theory procedures and techniques. Newbury Park, CA: Sage Tasci, A.D.A, Gartner, C.W. (2007). Destination image and its functional relationships. Journal of Travel Research, 45(5), 413-425

9.0 Cruise passengers’ complaints: an analysis of online reviews Mandy Aggett University of Plymouth Plymouth, UK

Abstract The growth of the cruise industry has led to increasing levels of competition, and the need for more effective design of products and services. Therefore, knowledge of passengers’ experiences and post-consumption evaluations is essential. The purpose of this paper is to analyse the content of online cruise reviews, or electronic word-of-mouth (eWOM), to identify cruise passengers’ complaints. A total of 241 online reviews, posted by passengers, were systematically selected and content analysis was conducted using a framework analysis method. SPSS was used to provide some quantitative analysis, and qualitative data is included in order to provide a more in-depth explanation of each complaint category. Attributes most complained about are identified as: food; policies; systems and management; and service outcomes or delivery. Efforts must be made to improve these elements, in order to reduce the number of negative evaluations. Effective service recovery procedures must be in place in order to generate more positive reviews. The emergence of eWOM as a source of reassurance and further information for potential passengers makes it even more necessary to reduce negative experiences as reviews are accessible to a much larger audience, and transcend the other limitations of traditional word-of-mouth communication. Therefore, every effort must be made to improve customer satisfaction in the identified areas in order to generate more positive reviews. Keywords: cruise industry, experiences, post-consumption evaluations, electronic word-of-mouth (eWOM), service and product improvement.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_9, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

9.1 Introduction The growth of the cruise industry has led to increasing levels of competition in the market (Hung and Petrick, 2010; Hosany and Witham, 2009; Park and Petrick, 2009) and the need for increased effort in improving customer satisfaction in a bid to encourage loyalty. The Cruise Lines’ International Association (CLIA) (2010) reports their member lines will be introducing twenty-six new ships in 2010-2012, representing 53 971 beds (an 18% increase in net capacity), leading to a further increase in competition. The growth in capacity, and an increasingly value-conscious market, necessitates that cruise operators must continually compete to attract and retain passengers. Hosany and Witham (2009) state that the cruise industry is relatively understudied, and refer to Petrick’s (2004) assertion that there is a need for further research on passengers’ experiences and post-consumption evaluations. Therefore, research in this area will be of significance to the industry in improving passenger satisfaction and thus, maintaining attraction and retention figures. The purpose of this paper is to analyse the content of online cruise reviews, or electronic word-of-mouth, as a means of identifying the complaints made by passengers regarding their experiences of cruise vacations. Electronic word-of-mouth (eWOM) is increasingly influencing consumer purchase intentions (Litvin et al, 2008; Bailey, 2005; Dellarocas, 2003). While many managers may fear the potential ramifications of negative reviews, it is suggested that eWOM (however poor) should be viewed positively, as it offers the opportunity to make improvements based upon the needs and expectations of the customers. Therefore, eWOM may be used as a consumer research tool, and can be utilised in more effective design of products and services.

9.2 Service experiences and post-consumption evaluations As a result of aggressive competition in the industry, Hosany and Whitham (2009) stress the importance of understanding passengers’ experiences and resulting post-consumption evaluations. Conlon et al (2004) proclaim that positive evaluations of a service experience are essential to customer satisfaction, building reputation, and long-term success. 9.2.1

Servuction model

The commonly cited Servuction (service production) Model (Eiglier and Langeard, 1987) illustrates the factors that influence the service experience. These are identified as servicescape, contact personnel (or service provider), other customers and the organisation and systems (Hoffman and Bateson, 2006). Servicescape is defined as the physical environment in which a service exists (Bitner, 1992), and includes the ambient conditions (temperature, smells, noise), space/function (layout, equipment, furnishings) and signs, symbols and artefacts (signage, personal artefacts and the style of decor). Bitner (1992) asserts that customers’ holistic perception of the servicescape leads to physiological, emotional and cognitive internal responses which influence approach/avoidance behaviours (see also Mehrabian and Russell, 1974). Due to 148

the intangibility of services, consumers often rely on the physical evidence that surrounds the service to form their evaluations (Hoffman and Bateson, 2006). A number of researchers recognise that the attitudes and behaviours of service staff (the ‘how’ of service delivery) can affect perceptions of a service experience, irrespective of the service outcome (the ‘what’ of service delivery) (Nicholls et al, 1998; Lehtinen, 1986; Czepiel et al, 1985; Grönroos, 1984). Consequently, positive perceptions depend, not only upon the employee’s ability to carry out a task, but also upon the manner in which the service is delivered. In their study of cruise passengers, Petrick et al (2006) claim that just one interaction between the employee and passenger may significantly impact a passenger’s perception of service quality. Hoffman and Bateson (2006) note that the success of many service encounters depends on how effectively the service firm manages its customers. A wide range of service establishments (including cruise ships) serve multiple customers simultaneously and these customers can have a profound impact on an individual’s service experience. Grove and Fisk (1997) found that 56.8% of respondents of their critical incident study stated that a trip to a tourist attraction had been significantly affected by other customers. The organisation and systems component of the Servuction Model refers to the management, systems, policies and processes in place. Grönroos (1990, p.210) stresses that operational, or administrative systems, and routines can be a hindrance to service, impacting on both customers and employees who must interact with the system. Czepiel et al (1985) contend that service employees genuinely wish to provide their customers with good service, but can be hampered by organisational limitations, policy or a lack of managerial support. The Servuction Model postulates that service experiences are systems in which people, processes and the physical environment interact. In terms of cruising, this doesn’t recognise the role that the product plays in the overall service experience. The product elements of a cruise, defined by Teye and Leclerc (1998, p. 154) as transportation, accommodation, dining [food and drink], ship-board entertainment, recreational activities, domestic and foreign ports of call and shore excursions, should also be considered. 9.2.2 The cruise experience and post-consumption evaluations While there has been much research activity in service quality and customer satisfaction in the tourism industry, very little of this focuses on the cruise industry. Lee and Clark (2005) investigated hotel customers’ ‘e-complaints’, and determined the top five complaint categories all related to service delivery failures (service provided not as agreed upon; decline in service quality; rude customer service; service never provided, and over-charging). Harrison-Walker’s (2001, p. 402) content analysis of airline passengers’ complaints on an online forum concludes ‘the top reasons for customer complaints were employee rudeness, other reasons (which primarily related to cancelled or delayed flights, but also to lying and dishonesty), employee incompetence, receiving misinformation from employees, and baggage handling.’ Lewis and McCann (2004) focus on the expectations and the types of service failure experienced by business and leisure hotel guests. Respondents ranked five service quality attributes in order of importance, as follows: 149

1. 2. 3. 4. 5.

Clean, comfortable bedrooms with all items in working order. Good quality food and beverages. Friendly, helpful, polite and efficient staff. High level of room security. Speedy, efficient check-in and out.

The most common service failures identified in this study are slow restaurant service, inefficient staff, slow check-in/out, unfriendly and unhelpful reception staff and poor quality food and beverages. More recently, Ramanathan and Ramanathan (2011) used online ratings of hotels to explore the relationship between a number of service attributes and customer loyalty and satisfaction. They found that value for money is a critical attribute, while customer service, room quality and the quality of food are dissatisfiers. Focus on the cruise industry is limited to a small number of studies. In 1998, Teye and Leclerc examined North American passengers’ satisfaction with a number of specific cruise products and service delivery components. In 2005, Lobo et al used a seventy-five attribute customised scale to analyse perceptions of service quality, based upon the expectations/disconfirmation construct (Parasuraman et al 1985), which compares preconsumption expectations with post-consumption evaluations. The results indicate that seventy-two items fell below the expectations of the respondents, signifying the existence of a service quality gap. Each of the original seventy-five items evaluated were classified into four broad categories of ‘liner service personnel’, ‘on-board services’, ‘operational features’ and supplementary services’, with the most significant gaps identified under the ‘liner service personnel’ category. A critical incident analysis of cruise passengers’ experiences and repurchase intentions, conducted by Petrick et al (2006), identifies policies and procedures, ship facilities, and excursions and ports of call as the most cited negative aspects of passengers’ experiences. Key attributes (those that are most likely to have an effect on desirable outcomes) are identified as service issues, staff/crew issues and food/beverage. They also conclude that negative incidents are much more significant in passengers’ satisfaction, value perceptions, word of mouth and repurchase intentions than positive incidents. Based on these findings, the authors recommend that cruise managers should focus their efforts on minimising negative incidents, rather than amplifying positive incidents, contradicting many cruise lines’ current reward schemes, which recognise positive evaluations of crew/staff members. Analysis of negative incidents, they add, can be an effective management tool for cruise line managers. Conlon et al (2004, pp. 434-435) note two reasons that passengers and their evaluations are critical to the success of a cruise line. First, attracting new customers costs three to five times more than retaining existing customers, and second, former passengers ‘powerfully influence ships’ reputations and the decisions of others to cruise on specific ships.’ They add that favourable word-of-mouth can increase the numbers of potential passengers that consider a particular cruise line for their holiday. Petrick (2004) affirms that highly satisfied passengers are influential in generating positive word-of-mouth. Hosany and Witham (2009) agree, noting that tourists rely heavily on word-of-mouth communication when choosing a holiday, and tourists’ satisfaction levels are closely linked with behavioural intentions, most particularly to the likelihood of recommendation. 150

9.2.3 Word-of-mouth communication and purchase decision making Word-of-mouth (WOM) is defined by Litvin et al (2008, p.459) as ‘the communication between consumers about a product, service or a company in which the sources are considered independent of commercial influence.’ It is widely accepted that WOM has more influence on a consumer’s decision making than any other form of communication (Duan et al, 2008; Godes and Mayzlin, 2004; Katz and Lazarsfeld, 1955). Recognising the importance of WOM, Godes and Mayzlin (2004) state its measurement is significant for the purposes of market research but note, since this form of communication is exchanged privately, it is difficult to gather the required data. Although the effects of conventional WOM may have some limitations, in terms of social contact boundaries, and the diminishment of influence over time and distance, (Duan et al, 2008; Ellison and Fudenberg, 1995), technological advances and the emergence of online networking sites have changed the way information is transmitted, transcending the limitations of traditional WOM. ‘Consumers can now easily and freely access information and exchange opinions on companies, products, and services on an unprecedented scale in real time’ (Duan et al, 2008, p. 1007). On a positive note, online conversations could provide an easy and cost-effective opportunity to monitor and measure consumer-to-consumer conversations (Godes and Mayzlin, 2004). Electronic word-of-mouth (eWOM) is defined by Hennig-Thurau et al (2004, p. 39) as ‘any positive or negative statement made by potential, actual or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet.’ The impact of eWOM on sales requires much further research, as current studies provide mixed results (Duan et al, 2008). However, the growth in eWOM platforms, in the form of product review websites (Bailey, 2005), has added two new dimensions to traditional WOM communication. These are identified as ‘unprecedented scalability and speed of diffusion’, and ‘persistence and measurability’ (Dellarocas et al, 2004). Although research on the impact of eWOM on sales is inconclusive, Bailey (2005) states that, in general, consumers are aware of product review sites, and use them primarily for reassurance and further information. The managerial implication of this is that efforts should be made to reduce the number of negative reviews. One way in which this may be achieved is to address a passenger’s dissatisfaction before they finish their cruise, through more effective service recovery procedures. Lovelock, Wirtz and Chew (2009) stress that customers that have had a problem resolved to their satisfaction may be more likely to make future purchases than customers that didn’t have a problem. We can therefore assume that this would generate more positive reviews. 9.2.4 Value of eWOM to the cruise industry One of the key implications of the rise in online communication is the availability of a wealth of accessible information on passengers’ experiences and post-consumption evaluations. This provides an alternative (and simpler) method of measuring and evaluating WOM. Godes and Mayzlin (2004, p. 6) agree, ‘online conversations may offer the firm an attractive opportunity to learn about its environment by directly observing the flow of interpersonal communication.’ 151

Barton (2006) implies that customer review websites have value as both a consumer research tool and as a marketing tactic. Litvin et al (2008) agree, naming two major uses of eWOM, for hospitality and tourism providers, as information and revenue generation opportunities.

9.3 Methodology The use of eWOM, for the purpose of analysis, could be described as a form of critical incident technique (CIT), a methodological tool that captures factual stories or episodes about a given experience (Petrick et al, 2006). It also bears some similarities to netnography (Kozinets, 2002), though this is a ‘qualitative research technique that adapts ethnography research methods to study communities that are emerging through computer mediated communications’ (Andreassen and Streukens, 2009, p. 253). This study consisted of content analysis of online communication, which Langer and Beckman (2005) position between discourse analysis, content analysis and ethnography. There is some concern regarding the representativeness of comments posted on product review websites. Litvin et al (2008) report that research suggests that writers of these reviews tend to be those with either very favourable or unfavourable opinions, which creates a “U”- shaped response curve. They add however, that online reviews are more useful in conveying levels of customer satisfaction than company-sponsored sites. Dellarocas et al (2004) disagree with the scepticism. In a study on ratings of movies, the researchers conducted a survey of subjects who do not rate movies online. The results exhibited a very high correlation with online ratings for the same movies. They conclude that online ratings can be considered as a useful alternative to word-of-mouth about products. A total of 250 cruise reviews, posted by passengers, were systematically selected (the first review from every other page until 250 were obtained) from the website http://www.cruise.co.uk. This site was chosen as it describes itself as the ‘largest online supplier of cruise holidays and information’, and was awarded at the World Travel Awards in 2009 with the title of ‘Best Cruise Travel Agent in the World’. Each review includes both the age group of the reviewer and the number of previous cruises they have taken. The reviews were copied and pasted into a Word document, and checks were made to ensure they reviewed a wide range of cruise companies and ships. Ocean Village, P&O, Royal Caribbean, Costa, Celebrity, Thomson, Cunard, Princess, MSC, Fred Olsen, Silversea, Azamara and NCL Cruises are thus all represented. In order to assist with the content analysis, the reviews were then edited down to include only the negative comments, the age-range of the reviewer and the number of previous cruises they’d taken. At this point nine reviews were discarded for containing only positive comments, leaving a total of 241 usable reviews. The negative comments were analysed using the first three stages of the framework method described by Ritchie and Spencer (1994): familiarisation, identification of themes and indexing. This is similar to the analysis stage of CIT, which Petrick et al (2006, p. 274) claim, if administered correctly, ‘can produce data that are both qualitatively and quantitatively valuable.’ The second stage (the identification of themes) took a considerable amount of 152

time, reference to the literature, and re-examination to identify the themes that emerged. The identified categories were examined at a later date by another researcher, and after discussion, it was agreed that some categories should be combined or added. For example, it was felt that issues relating to service outcome and service delivery could be combined into one category, as they both relate to the quality of service provided by the employees. The 241 reviews contained a total of 1,051 negative comments, or ‘incidents’, which were analysed both qualitatively and quantitatively. The statistical software package SPSS 17.0 was used for the quantitative analysis. Conclusions have been drawn and recommendations made based upon analysis of the data. The names of the ships, cruise lines and any other reference to identifiable features have been removed for ethical reasons.

9.4 Results Particulars relating to the sample are outlined in Tables 9a and 9b (the age range and number of previous cruises they’ve experienced). The majority of the reviewers are aged between 46 and 65, and 90.9% have cruised before.

Age Group 46-55 56-65 over 65 36-45 26-35 18-25

Frequency 86 76 33 32 9 5

Percent 35.7 31.5 13.7 13.3 3.7 2.1

Valid Percent 35.7 31.5 13.7 13.3 3.7 2.1

Table 9a Age Range of Sample

Number of Previous Cruises Frequency 3-5 63 more than 10 59 6-10 49 1-2 48 0 22

Percent 26.1 24.5 20.3 19.9 9.1

Valid Percent 26.1 24.5 20.3 19.9 9.1

Table 9b Number of Previous Cruises Experienced by Sample 9.4.1 Quantitative analysis Content analysis of the reviews revealed a total of 1,051 negative comments, that were classified into seventeen categories (or attributes): decor and ambience; cleanliness; other passengers; service outcomes or delivery; embarkation; disembarkation; food; 153

transportation; cabin; policies, systems and management; facilities; entertainment; on-board activities; on-board costs; itinerary and excursions; changes to itinerary and cancellations, and; the handling of complaints. All seventeen categories (or attributes) may be recognised as relating to components of the Servuction model, with the addition of a ‘product’ element to represent the ‘cruiservuction’: x x x x x

Product: facilities; transportation; the cabin; food; entertainment; on-board activities, and itinerary and excursions. Organisation and Systems: embarkation; disembarkation; policies, systems and management; on-board costs, and changes to itinerary and cancellations. Service Provider: service outcomes or delivery, and handling of complaints. Servicescape: decor and ambience, and cleanliness. Other Passengers: other passengers.

The incorporation of each of the attributes into the components of this model allows for an holistic overview of complaints (Table 9c), and reveals that the product, organisation and systems, and the service provider are the subjects of most criticism. Cruiservuction No. Of Negative % of Total Negative Component Comments Comments Product 444 42.2% Organisation and Systems 272 25.9% Service Provider 157 14.9% Servicescape 131 12.5% Other Passengers 47 4.5% TOTAL 1051 100.0% Table 9c Frequency of Complaints in Relation to Cruiservuction Components However, Hosany and Witham (2009) stress that multi-item measures are more appropriate in determining satisfaction levels than a holistic evaluation. Therefore, the number of negative comments for each category, and percentage of reviewers that made these comments are identified in Table 9d The ‘Percent’ column indicates the percentage of total negative comments each attribute received, while the final column ‘Percent of Cases’ identifies the percentage of reviewers that made a negative comment on this attribute. The attributes most complained about are identified as: x

Food (relating to any complaint made regarding the quality, taste, variety, or temperature of the food received in any of the restaurants): ‘The food was also very disappointing compared to the last time I cruised and it was obvious quality and standards have dropped over the years. Whilst there was no shortage of food 24-7, we would have preferred less but higher quality, especially at dinner.’

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‘At best, the food was a very mediocre standard, warm not hot, and at times, quite unpalatable.’

Responses Category of Complaint Food Policies, Systems and Management Service Outcome or Delivery Decor and Ambient Conditions Entertainment Cabin Onboard Costs Facilities Other Passengers Itinerary/ Excursions Complaint Handling Embarkation Cleanliness Cancellations and Changes Transportation Disembarkation Onboard Activities Total

N 129 128 121 100 92 82 67 61 47 39 36 35 31 24 24 18 17 1051

Percent 12.3% 12.2% 11.5% 9.5% 8.8% 7.8% 6.4% 5.8% 4.5% 3.7% 3.4% 3.3% 2.9% 2.3% 2.3% 1.7% 1.6% 100.0%

Percent of Cases 53.5% 53.1% 50.2% 41.5% 38.2% 34.0% 27.8% 25.3% 19.5% 16.2% 14.9% 14.5% 12.9% 10.0% 10.0% 7.5% 7.1% 436.1%

Table 9d: Frequency of Complaints

x

Policies, systems and management (negative comments made about a cruise line’s policies, the procedures, processes or systems in place, poor organisation or poorly managed incidents): ‘...they lack the ability to organise 3,500 guests in an acceptable manner...Queues at many activities on board, and at nearly all excursions is not what I expect whilst on holiday. I want to relax on holidays not queue for hours in uncomfortable conditions.’ ‘Like lambs to the slaughter we were hooked by the 45% discount off the original cruise price and believed we had a good deal. It is not until you get on board the ship that fellow passengers inform you of how much they have paid for booking around the same time as us with travel agents and directly with [the cruise line]. We paid £1,560 each for a tiny inside cabin...others however, paid between £800-£750 per person plus on board credits if £200-£500, and benefited from outside cabins or state rooms.’

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x

Service outcomes or delivery (concerned with the outcome (the ‘what’) of a service, or the delivery (the ‘how’) of a service, or incidents with staff): ‘the staff seemed to be inexperienced, both in dining room and staterooms.’ ‘We asked for some bottled water with our wine and the barman tutted and rolled his eyes at his colleague. Some of the waiting staff wouldn’t know a smile if it knocked them over, and just the plain rudeness of some of the others...’ ‘Reception are not in a position to help much of the time.’ ‘The staff and crew on [this ship] were rude, unhelpful, disinterested and downright disrespectful.’

Each of these categories is referred to negatively by over 50% of reviewers. Complaints relating to decor and ambient conditions, entertainment, the cabins, onboard costs, and facilities, are provided by over 25% of reviewers. x

Decor and ambient conditions (referring to the style of decor, layout and signage, smells, noise, temperature or general appearance and maintenance of the ship): ‘It is nothing like a new ship, very drab and hasn’t got the wow factor at all. The dining rooms are really tasteless and reminded me of being at an old people’s home...’ ‘we tried the casino but it was full of smoke so decided against it although it didn’t look particularly appealing.’ ‘the ship is in need of a total refurbishment. They were painting it for most of the trip...but this is only covering up the rust.’

x

Entertainment (relates to any of the entertainment provided onboard in the theatres or bars): ‘the entertainment was very poor – the [company’s] singers and dancers looked like they needed more rehearsal time. I was shocked to discover on the last night that they had been on board for 9 months. I thought they were just warming up.’ ‘we hated the shows; they weren’t very professional and at times very embarrassing to watch.’

x

Cabin (any complaint made about a cabin’s amenities, sound-proofing or size): ‘the outside cabin we had on deck 3 was very small, with not a lot of cupboard or wardrobe space.’ ‘the cabin was dreadful...no handle on the fridge, holes in the bedding...’ ‘...the plumbing left a lot to be desired.’

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x

Onboard costs (complaints made about the costs of extras, such as drinks, excursions, and service charges): ‘On [this ship] if I opened the mini-bar in our stateroom, took out a gin and tonic, opened the bottles, poured it into a glass and even went to the trouble of drinking it myself, I still had to pay a 15% service charge! I am very happy to tip and usually do very generously if the service is good, but I, like many others on board, became very irritated by this practice.’ ‘...please be wary that reduction in the headline price of the cruise is recouped via these additional and often excessive charges on board.’ ‘Needless to say the excursions were up to five times the cost of train and bus tickets in local ports of call.’

x

Facilities (any negative comment relating to leisure facilities, onboard shops, bars, restaurants, swimming pools, casinos, or children’s facilities): ‘Swimming pools were crowded due to one being shut for two days, but on the whole I would say they were too small for the amount of passengers.’ ‘the casino is just a glorified slot machine arcade without any glamour or sophistication.’ ‘[The company] failed to provide on board facilities that cater for the age group of the majority of guests,’

9.5 Discussion Due to the growth in the cruise industry, and increasing levels of competition, Hosany and Witham (2009) and Petrick (2004) call for further research on cruise passengers’ experiences and post-consumption evaluations. The purpose of this research was to analyse the content of online cruise reviews (electronic word-of-mouth) as a means of identifying the causes for complaints. The multi-item analysis indicates a number of complaints regarding passengers’ cruise experiences. The majority of complaints relate to food; policies, systems and management; service outcome and delivery; decor and ambient conditions; entertainment; cabin; onboard costs and facilities. The three attributes most frequently cited are identified as food; policies, systems and management, and service outcomes or delivery. Although Petrick et al identify a number of other attributes as the most cited negative aspects of a cruise (including policies and procedures and facilities) their study reveals the key attributes (those that are most likely to have an effect on desirable outcomes) are service issues, staff/crew issues and food/beverage. Two of the most common complaints correlate with those identified by Lobo et al (2005), in their analysis of cruise passengers’ post-consumption evaluations. The service employees and operational features (policies, systems and management) are also identified in their top four categories of dissatisfaction.

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In contrast, Petrick et al (2006) identify excursions and ports of call, and Lobo et al (2005) identify onboard services and supplementary services in their top categories of complaints, while this study finds these to be less significant or not referred to at all. Perhaps most surprising is that food, negatively cited by over 53% of reviewers, is not a source of dissatisfaction in the other two studies (although Petrick et al identify it as a key attribute). However, food is identified in the top complaints of hotel guests in Lewis and McCann’s (2004) and Ramanathan and Ramanathan’s (2011) studies. Similarly, Lewis and McCann (2004), Ramanathan and Ramanathan (2011), Lee and Clark (2005), and Harrison-Walker (2001) also all highlight poor service outcomes or delivery as a key issue in their results on customers’ perceptions of hotels and airlines. Additionally, complaints about room quality in Ramanathan and Ramanathan’s (2001) findings correlate with this study’s recognition that cabins are frequently complained about. Conversely, Lewis and McCann (2004) rank a slow check in/out at third on their list of hotel complaints, while this study finds that complaints relating to embarkation and disembarkation are cited much less frequently than other categories. The top five complaints made by cruise passengers’, but not the hotel guests or airline passengers outlined in the discussed studies are policies, systems and management (this study; Petrick et al, 2006; Lobo et al, 2005), facilities (this study, Petrick et al, 2006), decor and ambient conditions (this study), entertainment (this study) and additional, or onboard costs (this study).

9.6 Conclusions As noted, Conlon et al (2004) proclaim that positive evaluations of a service experience are essential to customer satisfaction, building reputation, and long-term success. Petrick et al (2006) add that negative incidents are much more significant in passengers’ satisfaction, value perceptions, word of mouth and repurchase intentions than positive incidents. Therefore, negative experiences should be minimised. Clearly, efforts must be made to improve the food; policies, systems and management, and; service outcomes or delivery, in order to minimise the number of negative evaluations. The decor and ambient conditions, entertainment, cabins, onboard costs, and facilities also require much attention. Good service recovery procedures need to be in place to ensure customer satisfaction, before they disembark (note that almost 15% of cruise reviewers reported issues relating to complaint management on board the ships). This should lead to more positive evaluations and WOM communication. As stated, WOM has more influence on a consumer’s decision making than any other form of communication, and is of particular relevance for tourism and hospitality products. The emergence of eWOM as a source of reassurance and further information for potential passengers makes it even more necessary to reduce negative experiences as reviews are accessible to a much larger audience, and transcend the other limitations of traditional word-of-mouth communication. Therefore, eWOM presents a challenge to tourism and hospitality providers. The cruise industry must do what they can to minimise negative reviews, and monitor these to ensure improvements can be made where necessary.

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9.7 Limitations and future research considerations Concern still remains regarding the representativeness of comments posted on product review websites (Litvin et al, 2008) due to the belief that those engaging in an articulation of their experiences do so because their opinions are highly favourable or unfavourable. However, each of the reviews analysed for this paper offered a balanced critique which was neither completely positive nor negative. One of the limitations of this work is that the positive reviews were not discussed. If this were done, the reliability and validity of the negative reviews could be established. The real limitations may lie in the credibility of all the reviews. As anyone can anonymously post a review on the sampled website, this is open to abuse of ethical boundaries (Litvin et al, 2008), in that employees of organisations may post negative reviews of their competitors. As such, data obtained from eWOM sources should be regarded with some degree of caution. Also, the sample of reviews represents a small percentage of the total number of cruise passengers, and therefore may not be fully generalised to the entire population. More conclusive research is required on the impact of eWOM on sales, and the validity of product reviews. However, this appear provides a preliminary review of passenger complaints, that could form the basis of further research into passengers’ experiences and post-consumption evaluations. It should also prove useful for cruise-ship managers wishing to gain a competitive advantage in the industry, through market-focused improvements to products and services.

9.8 References x x x

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10.0 Influences of Celebrity Chefs on Cruise Fine Dining Experiences Patsy Morgan & Christopher Edwards Solent University Southampton, UK

Abstract Giving chefs celebrity status is not a new concept, as history has shown that many past eminent chefs have shaped food and restaurant systems which are prevalent in today’s cruise culture and post modern hospitality organisations (Muller, 1999; Kelly 2005; Featherstone, 2007). The cruise industry has embraced the celebrity chef phenomenon with gusto and there is evidence of major cruise lines adopting one or more celebrity chefs on cruise lines to enhance their cruise brand and increase sales. This paper will endeavour to evaluate the role of celebrity chefs within the context of the cruise industry and critically analyse the value of celebrity chefs, be it for product enhancement or cruise marketing opportunities. Cruise experiences are already embedded within the marketing matrix of the cruise industry and this paper questions whether celebrity chefs are an integral part of the cruise vacation or just a marketing gimmick (Douglas and Douglas, 2004; Petrick and Xiang, 2006; Morgan, 2009a). Furthermore, this paper will review the need for celebrity chefs in the first place, who to select and how to ensure that the chef brand complements the cruise brand. Emphasis is also given to cruise fine dining experiences already on offer and further explores whether celebrity cruise fine dining is just another ‘hype’ drawn from the influences of the captive media imagination (Giles, 2001; Turner, 2004). A renowned celebrity chef is only as good as the amount of media attention he/she exports to the cruise industry, and could therefore be deemed a valued marketing tool for the cruise industry. At present, the celebrity chef phenomenon can be viewed as a test tube for cruise research, therefore this study examines perceptions of cruise passengers’ celebrity fine dining experiences and the outcomes of the results from questionnaires distributed to cruise passengers will be a platform for recommendations to the cruise industry and future research. Keywords: Celebrity Chefs, Cruise Industry, Fine Dining Experiences.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_10, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

10.1 Cruise fine dining experiences A satisfied cruise customer is essential to the success of any cruise business where repeat business is linked to enhanced customer satisfaction through high standards of food, attentive service, cost of food and drink and a congenial atmosphere (Gupta et al., 2007). Growth of cruise ships means relative increase in the number of multinational passengers from different socioeconomic groups, gender, age, ethnic backgrounds and disposable income, all experiencing the cruise dining phenomenon (Ball and Roberts, 2003). According to Hall and Sharples (2003) food and the consumption of food is considered one of the major factors in cruise experiences. Food can either be a curse or a delight to FAT cruise tourists (Morgan, 2009b) where consumption of food can a hinder or help in controlling weight gain. The image and taste of food can vary from ship to ship and it is the quality of food which in essence is a major factor of the food experience. Cruise ships use food as a badge of recognition and is very much part of the brand identity. Fine dining is a passive activity, which focuses on the consumer where all the five senses are stimulated where the visual senses view fine dining as not only an ‘organoleptic experience’, but also an intellectual one, where ‘eating becomes the pretext for unique fine dining experiences (Hetzel, 2003). Oh (2000) examined the perceptions of ‘fine-dining’ patrons and found that value was considered superior when it came to the patrons intention to return, where pre-dining, during and the post experience was taken into consideration in the overall experience. Fine dining on cruise ships is somewhat complex as it involves an array of different restaurants, food and drink and services within the confines of a cruise ship. The sensation in the consumption of fine dining is a level of arousal that creates a positive ‘hedonic’ stimulus and increase well-being and contentment (Andersson and Mossberg, 2004:171). Fine dining is about the level of arousal created by a number of attributes, to include the service level and features of the service where food is the focal point. Furthermore the celebrity chef plays an integral part of the fine dining experience and it is his/her identity, creativity and popularity that many fine diners aspire to for various reasons; these being, media attention, cookery shows on TV, reality TV, recipe books, appearances on talk shows and other activities where there is high profile and media coverage. Andersson and Mossberg’s (2004) concentric rings model examines the influences of a customer’s multidimensional meal, where the ‘must food’ is the main attribute and if food did not exist then there would be no basic function. The ring includes the five satisfiers and these could vary depending on the level of the fine dining experience. The delight includes something that is over and beyond the ordinary dining experience, such as a pianist entertaining the guest during the service.

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The Cruise, Celebrity, and Fine Dining (CCF) Relationship Model (see figure 10a) expands on the concentric rings model by including the overall relationship with the celebrity chef, the outcomes of the cruise fine dining experience and the impact it has on the overall cruise brand. Delights may include the meal being cooked by the celebrity chef or the appearance in the restaurant, making direct contact with the fine diners. Presence of others in the restaurant will affect the service encounter bringing in positive or negative experiences. The aim of both models is to ensure the maximum satisfaction within the fine dining experience. Celebrity chefs aim to give the cruise diners a high quality dining experience similar to that which is served not only in their own restaurants but also in similar high class restaurants; but at a fraction of the price (Prosser, 2007). According to Basil and Basil (2009) ‘there is a complex relationship between client expectations and satisfaction’ and there is a fine line between aesthetics standards and value assessment of standards including ‘customer expectations and satisfaction’.

Fine Cuisine

Cruise Brand

Celebrity Chef

Food Focus

Service

Celebrity Endorsed Restaurant Clients

Celebrity Endorsed Fine Dining Cruise Experiences

Design and Decor

Fig 10a. The CCF (Cruise, Celebrity Chef and Fine-Dining) Relationship Model to illustrate the relationship between celebrity chefs, factors influencing fine diners’ experience and the cruise brand (Adapted from Andersson and Mossberg, 2004:172). Generally cruise ships carry on average 3,500 passengers and throughout the voyage are fed and watered twenty four hours a day (Douglas and Douglas, 2004; CLIA, 2008; Dickenson and Vladimir, 2008). Restaurants on board cruise ships are in many ways retailers of time, service and customer experiences and it is the differentiation of the cruise restaurants that help to form the unique part of the cruise brand (Muller, 1999). Dining on board for all passengers is part of the cruise package where meals are included in the price of the voyage. Celebrity fine dining is marketed as a five star fine dining experience, and only a nominal charge is made to have the privilege of exclusivity to the ultimate fine dining experience, where costs range from as little to £15.00 to £30.00 per person, not including drinks. Interestingly, the price of a gourmet meal may be too low to some fine diners compared to the value of food and service they receive in a celebrity endorsed restaurant, where they 165

know that if they eat in the Celebrity’s own restaurant they could be pay at least three times the price (Muller, 1999). There is also a new onboard system commencing which is called ‘Celebrity Select Dining’ and is a new experience offered in flexible fine dining from Celebrity Cruises, where cruise passengers can experience dining on a day to day basis through the Maitre’d on board the ship, or even book choices on line before the ship sails (Wilkening, 2009). It would be interesting to see if celebrity fine dining will be included in this concept and it could initiate more efficiency in service and revenue for the company. Time spent in a restaurant is about experiences but in addition, ‘if you charge for the demonstrated outcomes the customers achieve, then and only then are you in the transformation business’ (Pine and Gilmore, 1999); thus transforming the cruise diner to a repeat loyal cruise customer.

10.2 Restaurants and the cruise market According to Basil and Basil (2009) restaurant dining is an important area in creating value and extraordinary experiences and is also an integral part of the food experience. However, there is a distinct lack of research in the cruise dining experience and the role celebrity chefs play in contributing to the overall cruise experience (Sparks et al, 2003). A study by Gyimothy et al., (2000) resulted in 54% of tourists cited restaurants as a very important factor when visiting a destination and therefore if the cruise ship is considered a destination in its own right, this could also be an important factor to the overall cruise experience. Food in restaurants on board ship is about the cruise lifestyle, with different restaurants offering different service options from buffet style, plate service, silver service, room service, fast food and many modern ships boasting of 24 hour access to food consumption. However the physical environment of the celebrity fine dining restaurant can be a contributory factor as to how the diner feels about the restaurant and is a contributor to the generation of fine dining experiences; a strong psychological factor as to whether the cruise fine diner returns or make recommendations to others (Wakefield and Blodgett, 1999; Basil and Basil, 2009). Furthermore, when staff interact with fine dining cruise passengers through emotional labour, they need to take into account both the corporate image and the image of the celebrity chef (Johanson and Woods, 2008). The influence of celebrity chefs in restaurant design is an important factor in that restaurants are aimed to match and enhance the mood of fine diners, by creating the right ambiance through restaurant layout, optimum room temperature, creative lighting and incorporate themes that reflect the types of foods cooked and served in the celebrity endorsed fine dining restaurants on board cruise ships. The design of fine dining restaurants is complementary to the rest of the dining experiences offered on board ship and it is the reputation, the product and the service, which are ‘all found to be positively related to perceived quality’ (Petrick and Xiang, 2006:64). Sometimes customer involvement enhances fine dining service experiences providing it is correctly designed ‘in ways that will enhance their enjoyment of the experience’ such as engaging with the celebrity chef through dialogue and physical and mental stimulus (Ford and Heaton, 2001:46).

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10.3 Defining celebrity chefs Celebrity chefs are not a new phenomenon, because the history of fine dining draws upon the skills and culinary arts from chefs such as Marie Antoine Carème, known as Antonin (1784 – 1833). He was brought up in the slums during the French Revolution and worked his way to be the founder of haute cuisine, who included elaborate preparation styles where flavours, colours, the look and feel of the food were important considerations in the process of providing elaborate foods of gastronomic indulgence, for the wealthy French clients of that time (Kelly, 2005). Carème was regarded as the founder member of gastronomy and one of the first celebrity chefs considered by many of his colleagues and professional chefs as one of the great culinary artists of his time cooking for royalty including Napoleon, the Tsar of Russia and Prince Regent of London; with the honoured title of ‘chef of kings’ and the ‘king of chefs’ (Trubeck, 2000; Kelly, 2005:10). He was also renowned for his decorative centre pieces and this is something that is prevalent today on cruise ships where showmanship from talented chefs includes displays of ice and chocolate carvings, all of which emphasise the decadence of gastronomy on board cruise ships. Georges Aguste Escoffier (1846 – 1935), who in the late part of the 19th Century and early 20th Century was known as the ‘emperor of chefs’ by King William II of Germany, and by others accolades included ‘emperor of world kitchens’ and ‘king of cooks’ and thus was renowned as one of the world’s greatest chefs (Anon, 2009a). Escoffier was a prominent figure in a range of London Hotels such as the Carlton the Ritz and the Savoy and during his lifetime created many classical dishes and developed rigid systems; he was meticulous in standards of behaviour, dress and hygiene, which are today part of organisational practices as seen on most cruise ships (Ball and Roberts, 2003). To ease service by doing away with the elaborate and enhance the dining experience, Escoffier did away with the more formal traditional meals, i.e. heavy sources and complements. He also did away with the time consuming and cumbersome service a la Française, where all dishes were served at once but with no guarantee of dishes remaining at required temperature levels, thus affecting presentation and taste of food. Furthermore he developed the à la Russe style of service, which incorporated simple yet elaborately prepared dishes within manageable a la Carte Menus. Despite his incandescent relationship with top hotels in England and France, he was not interested in the lifestyles of the wealthy clientele that frequented other up-market restaurants and cruise ships. He dedicated his life to the culinary arts, setting up organisations and elevating the status of French Cuisine, which is now recognised throughout the world (Escoffier, 1996). Escoffier wrote a wide selection of cookery books with some 10,000 recipes, which today are the foundation of many cookery books created by modern celebrity chefs of the 21st Century (Escoffier et al., 1979). The evolution of cuisine and fine dining has seen great changes including the rejuvenation of haute cuisine to nouvelle cuisine and taken up by a new generation of chefs inspiring art, sophistication in modern food preparation and service (Trubeck, 2000). The advancement of French cuisine was done through practices and writings and the training of many chefs and the strand from which today’s chefs have and are continuously developing new trends in fine dining to suit post modern diners.

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In France, fine dining grew from the traditions of a food culture that existed in nearly every household where fresh foods, styles of cooking developed from family traditions, in other words ‘from the bottom up’ a tradition held dear to many Frenchmen (Anon, 2003:1). In contrast haute cuisine in the UK stems from consumption of gastronomic delights were enjoyed from ‘the top down’, where gastronomic delights were enjoyed by aristocracy, celebrities and others who considered themselves of British nobility. Other well known celebrity chefs such as the Roux brothers who came from France in 1959, worked for the English aristocracy and opened various restaurants, and this gave opportunities for modern celebrity chefs such as Marco Pierre White, to train and develop their knowledge and skills. Consequently Marco Pierre White is a celebrity chef and has his own restaurant the White Room onboard Ventura P&O Cruise’s ship. Cruise tourists rely on expert advice as validity lends to dissemination of information of the fine dining products and services (Bowen and Santos, 2006).

10.4 21st Century celebrity chefs Defining a celebrity chef is somewhat complex in that traditionally a celebrity chef was totally reliant on their outstanding culinary skills and like Escoffier and Carème both cooked for the elite. Indeed many 21st Celebrity Chefs can boast of awards of Michelin stars and other various awards. ‘The defining characteristic of a celebrity is that there is essentially a media production on television, radio, or in the movies through which a personality is exposed to the public. Actors are celebrities because their media productions are the movies and television shows that they appear in. The celebrity chef receives wide exposure through the media and is well known because of the media; the celebrity chef’s own show, and frequent appearances on popular daytime talk shows are his media productions. Without media attention and publicity, a celebrity chef loses the defining characteristic that distinguishes him from a restaurant chef.’ (Giles, 2000:101). Turner (2004), also views celebrity chefs with status where they are visible, keep the public attention focused on what they are doing, more often highly trained and worked with mentors for a number of years and are representation of culinary arts through the media of print, television and now the internet. Celebrity chefs are on par with film stars, football stars, and other sports stars and whilst in the media lime light, be it for their talent or their personal life, are in constant demand. Celebrity chefs bring different kinds of meanings and this is where their own identity and personality plays an important part when they become part of the cruise culture (Giles, 2000; Ranson, 2009). The types of messages that the celebrity chef provides for the cruise companies who employ them need to be in sync with individual identification of cruise ships, yet meet the needs of diverse cruise passengers with social differences and expectations. However according to Sparks et al. (2007:31) ‘the perceived customer value is related to the experience of the service delivery process’ which may indicate that it isn’t the outcome of the meal or drink within fine dining, it is the notion of value as a consumption of celebrity fine dining experiences. 168

10.5 Gender of celebrity cruise chefs Masculinity dominates the celebrity chef working within the cruise industry in that no female celebrity chefs are employed to work for cruise companies. Renowned female celebrity chefs currently working on television show, write recipe books are few in comparison to male dominated celebrity chefs. In the 17th Century, female chefs were only good enough to work in taverns, and corner restaurants and unlike Carème and Escoffier, according to a restaurant and wine critic, no female has ever been admitted into the Royal Society of Chefs’ (celebchefs, 2009). Furthermore, it was deemed that many celebrity female chefs could not meet the challenges of the rigorous pressures from production kitchens, which on cruise ships are predominately staffed by males from many nationalities. The tension between masculine culinary practice and ‘feminine domestic cookery’ image has been accentuated by their macho attitudes both in and out of the kitchen (Hollows, 2003:229). Gordon Ramsey and Marco Pierre White are two examples of high profile celebrity chefs with superior culinary experiences, whose accentuated macho lifestyle and explicit language has spilled from the kitchen (Hell’s Kitchen) into their private lives (Frost, 2009). For many celebrity chefs it is not only about ‘being photogenic or skillful’ (Biblionia, 2003:105) it is also about performance, the kitchen/restaurant is the stage, and, cruise celebrity chefs are responsible for the performance of running successful restaurants and enhance the cruise brand (Pine and Gilmore, 1999; Douglas and Douglas, 2004; Featherstone, 2007; Morgan, 2009a). Many female celebrity chefs are judged more on their looks than their culinary skills. A scroll on the internet will define celebrity female chefs as stunning looking women who are involved in presenting on chat, cookery shows, or may even have their own TV presentation programme. They may have contributed to the literary world through their own cookery books. Early female celebrity chefs (perhaps known more as celebrity cooks) such as Margaret Patten and Fanny Craddock have caused the British public to be more open with creativity of dishes and since the 2nd world war have influenced the change in staid dietary habits. Nigella Lawson and Delia Smith are the typical representation of UK female celebrity chefs and are the epitome of looks and skills in the culinary world and consequently have millions of dedicated followers who aspire from their gastronomic contributions. Two Fat ladies (as seen on UK television) somewhat defy the traditional sexy image of female celebrities, indeed it is their rotund looks, comic interpretations mixed with a variety of traditional and contemporary cooking recipes that have made Clarrisa Dickson-Wright and the late Jennifer Paterson, a formidable duo of culinary expertise (Lifestylefood, 2009). They were two upper-classes, middle-aged and overweight ladies, who smoked, drank wine and rode around the countryside on a motorcycle with sidecar, advocating dishes that were for some deemed extremely unhealthy. Moreover they did not advocate junk food, but they were ‘apostles of lard and unrepentant propagandists for cream and eggs’ (Richards, 1998; Ibrahim, 2009). It was the witty banter and the light touch that complimented the heavy traditional recipes used in their shows.

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Celebrity Chef

Land Base

Cruise Ship/s

Marco Pierre White

Frankie’s The Yew Tree Pub Italiana Luciano Author TV

Ventura Aurora Oceana

Olives Figs Restaurants Author TV Food Consultant TV Author Zilli Italian restaurants Author TV Rhodes Restaurants Twenty Four Author TV Empire of restaurants around the word Author TV Culinary Entrepreneur Author Nobu Restaurants TV

Queen Mary 2 Queen Victoria

Todd English

James Martin

Aldo Zilli (Zilla)

Garry Rhodes

Nobu (Nobuyuki Matshisa)

Jacques Pepin

Name of Restaurant The White Room Upgraded to carry White’s cuisine Aurora Cafe Oceana Cafe Jardin, Pizzeria Todd English Restaurants

Food Offered Varied Italian influence

Ocean Village Ocean Village 2

Martin’s Bistro

Varied advocating fresh product

£15.00

Thompson Celebration

Zilli

Italian Influence

£15.00

Arcadia Oriana

Arcadia Rhodes Oriana Rhodes

£20.00

Crystal Serenity Crystal Symphony

Silk Road Restaurant and Sushi Bars

British Influence cooking with a contemporary touch Japanese influence with western influence

Oceania Insignia Oceania Nautica Oceania Regatta

Continental Grand Dining room Polo Grill Terrace Grill

Fish and varied Mediterranean cuisine

French and American and Japanese influence

Average Cost £20.00 Supplement costs in the Cafes (Pizzeria included in the price) Lunchtime £20 Dinner £30

£30

£20.00 £30.00

Fig. 10b. Example of some Celebrity Chefs actively involved in Celebrity Fine Dining onboard cruise ships (Adapted from Ranson, 2009). However, despite the growth in female celebrity chefs there is as yet no presence of female cruise celebrity chefs to market the cruise brand. Fig. 10b shows an array of celebrity chefs who lend their celebrity status to international cruise companies where the emphasis is not necessarily about quantity but more about quality, and can be purchased by cruise passengers who consider flexibility variety and dining experiences, an important and integral part of the overall cruise experience (Gyimothy et al., 2000). The shift in diverse myriad dining options will continue to grow as the complex dining experiences is about offering cruise passengers flexibility which adds to the onboard profit. Ships today with an 170

average of 3,500 passengers (CLIA, 2008) of diverse nationalities and cultures need to cater to meet the growth and varied demands from different cruise demographics (Brotherton, 2003; Gibson, 2006; McLeod, 2009). Celebrity chefs onboard cruise ships is a relatively young idea and at present it is about designing restaurants around celebrity cruise chefs (McLeod, 2009). Take the building of P&O Cruises ship Ventura where Marco Pierre White was involved in the design of the restaurant called the White Room (Simon, 2009); and is also associated with Cafe Bordeaux on P&O Cruises Aurora and the Cafe Jardin on P&O Cruises Oceana. Many Celebrity cruise chefs also offer informative lectures, taster sessions, cookery demonstrations and cookery shows all of which are said to enhance the cruise experience and create more onboard spend. It could be argued that celebrities and fine dining on cruise ships is ‘chefdom’, a province for males and a platform for egoistic showmen to compete for the likes of best fine dining experiences, best place award, best chef or ‘emerging young artist’ rather than total commitment to the cruise brand (Douglas and Douglas, 2004; Cliffs, 2009; Ranson, 2009).

10.6 Celebrity chefs and the FAT culture Many celebrity chefs (although not all) are advocates for foods rich in sugar, high in fat and salt, and through cookery programmes, recipe books advocate unhealthy lifestyles by encouraging unhealthy eating and therefore contributing to the growth of obesity (Anon, 2009b). Influences of Celebrity Chefs should not be under estimated where it has been know for supermarket shelves to be cleared of particular foods when celebrity chefs have endorsed a food or product on a cookery show. Globesity is a world-wide phenomenon and The World Health Organisation (WHO - 2006), also reported that by 2015, worldwide, approximately 2.3 billion adults will be overweight and more than 700 million adults will be obese. A study by Chang and Christakis (2002) has acknowledged that over the past six decades obesity has been transformed from being the result of something that individuals become, to something they now experience. Navarro’s (2009:7) analysis of the most noticeable changes over the last thirty years has criticised the way ‘health promotion programs primarily based on behavioural and lifestyle interventions’ including cookery programmes on TV, which may contribute to a number of growing health related issues, in particular the rise of global obesity. Some celebrity chefs are themselves overweight and therefore could endorse obesity by setting examples through their own image and weight issues with the cliché of ‘do as I say not do as I do’. Caraher et al., (2000:27) argued that celebrity chefs are entertainers and not necessarily as ‘someone who will provide reliance advice on cooking and health matters’. Critser (2003) summarized obesity as the dominant unmet global health issue. Examining the growth of obesity together with the growth of cruise tourism is a complex issue. Evidence of the rise in obesity is prevalent in many western countries especially in adults between 20 – 60 years (McNicholas et al., 2007) an interesting factor when the average age for cruising is 30-55 years (CLIA, 2006; Douglas and Douglas, 2004; Petrick and Li, 2006; Morgan, 2009a).

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10.7 Influences of celebrity chefs: A reality check Does a Celebrity Chef bring a new dimension to fine dining on cruise ships or is a celebrity chef another marketing tool to entice existing and new cruise passengers onto the brand ship? The celebrity chef is considered a brand in his/her own right, (Giles, 2000) which the cruise company is buying into, thus bringing media exposure onto the cruise line. Celebrity Chefs working for cruise ships have a contract to fulfil, which may include an agreed number of personal appearances and work in the fine dining restaurants. However, Klein (2002) criticised the Michel Roux fine dining experience on the Celebrity Cruise Ship and advocated that the fine dining was hype, overrated and confusing for the passengers, as standards were not that of a Michelin Star Chef. When celebrities in general endorse a product the public view the product as a ‘must have’ because if it is seen as OK by the celebrity then it ‘must be a superior product’. The cruise fine dining experience is not only about the tangible and intangible products, it is also about buying into the celebrity chef personality. Some passengers may even book their cruise to coincide with the celebrity chef being on the ship at the same time, whilst other passengers will visit the fine dining restaurant so that once back home, they can reflect on their fine dining experience and the association with a well known chef personality. However, it is not about producing an innovative dish, and expecting cruise fine diners to relish the idea that if it has been recommended by the celebrity chef it must be good. According to Gary Rhodes, celebrity chef for Rhodes restaurants on P&O Cruises ships, the service in his restaurants is considered as important as the food, particularly when the standard of service throughout the ship is so high. ‘If you have sensational food but the service is rude, you wouldn’t go back to a restaurant,” he says. “First impressions are everything and the restaurant manager is the first and last person a passenger sees in the restaurant. We treat every guest as an individual. We know when to stand back and leave them alone, and which one want personal attention’ Bryant, (2007:01).

10.8 Conclusion This paper has explored celebrity chefs and their contribution considered by the cruise organisations to cruise fine dining experiences. Cruise companies are constantly seeking competitive advantage and improvements to the overall passengers’ experiences, yet at the same time increasing onboard spend. There is no doubt that there is a lack of research in celebrity chefs and the cruise industry; it is an unknown entity and worthy of rigorous enquiry. The cruise ships state that they already offer five to six star fine dining experiences in the main restaurants (included in the voyage price) so the questions remain as to whether or not the celebrity endorsed restaurants (CER) complement the existing products or are just another fad to encourage more spend. The researcher advocates a thorough investigation into the contribution made by the celebrity chefs by undertaking research into the perceptions and experiences the passengers who have used the CERs and establish whether or not CERs compliment the cruise brand.

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PART D:

Human Resources

11.0 Staffing the cruise industry in 2020: Exploring solutions Caroline Wiscombe Hospitality and Retailing Leeds Metropolitan University Leeds, UK John McGirl Royal Caribbean Shipboard Miami, USA Michael Piontek IBV Nurnberg, Germany

Abstract The cruise industry is less than 40 years old illustrating an annual growth of 8.2%, double that of the general tourism sector. There is a dramatic change in the complexity of the ships and increased ‘total destinations’ approach. Anticipated growth for the next 20 years is 5% per annum, despite the current economic situation; currently there is a 60,000 staff shortage and by 2020 the industry will need an additional 250,000 employees. However there is a poor perception of life at sea with careers not considered as main stream, challenges to attract and retain staff and a shrinking resource in traditional labour markets. Management of this successful hospitality sector, who are currently winning the occupancy war, are therefore posed an enormous challenge (CLIA, 2006; Gibson, 2006; Chin, 2008; Piesley, 1995, 1998 & 1999; Toh et al, 2004). This paper provides an ethnographic account of a discourse that seeks solutions to the staffing of the cruise industry using ‘scenario planning’. It describes the narrative surrounding dialogue between industry insiders, academics and management expertise, which results in new and innovative ideas for the sector. The use of theory to practice was not easy, for the academics involved nor the industry; critiques of the resulting scenarios say the theory is ill-applied. Nevertheless the process was illuminating and helpful in ‘thinking outside the box’ for all concerned, assisted by a philosophical approach that saw the results for what they were; an opportunity now exists to explore further the delivering of a less resource intensive, level of service to a specific market segment. The process had the benefit of exploring a fairly complex theoretical concept in a challenging but safe way. Would the industry use this theoretical approach again? The jury is out! (Tsang, 2000; Rothman, 2003;Ringland, 2002; Wilkinson, 1998) Keywords: staffing; scenario planning; innovation; ‘theory to practice’; ethnography

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_11, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

11.1 Introduction This paper is an ethnographic account of a ‘workshop’ that sought solutions to the staffing of the cruise industry using ‘scenario planning’, a theoretical model. It describes the application and narrative between industry insiders (the matter expert), academics and management expertise (the blue sky thinker) using an ethnographic approach to assess if theoretical modelling has merit in creating solutions for real world business problems. The paper developed from an opportunity for three diverse mature students on a Doctorate of Business Administration (DBA) programme at Sheffield Hallam University to collectively form a workshop group in order to investigate ‘scenario planning’, one of a series of analytical and diagnostic criteria with which it is possible to inform business practice. The workshop is part of a taught DBA module that ‘considers, analyses and aims to provide forecast scenarios with regard to the changing world and global economies, the business agenda, the changing nature of business and the impact of leadership in relation to business and management practice’ but for the trio undertaking the task, amongst a cohort of other students also working in groups, it also became a way of challenging the status quo, understanding the issues surrounding an increasingly successful and growing tourist sector, and to critically evaluate the different skills, knowledge and perceptions involved in the academic/business continuum (Darwin, 2008). Thus the paper has four strands: x To evaluate ‘scenario planning’ as a theoretical model and tool for business planning x To critically analyse the issues involved in staffing the cruise industry in 2020 using scenario planning as a framework x To consider the interaction of business and academia as a knowledge transfer tool x To analyse the use of ethnography as a research methodology

11.2 Methodology Ethnography can be described as a ‘label of choice’ for those working in professional and applied fields; it denotes the practice of writing (graphy) about people and cultures (ethno) where the researcher immerses themselves in the group or organisation for an extended period of time. They may observe, listen, ask questions, interrogate data, undertake interviews or focus groups, or otherwise investigate the culture and society which is under investigation (Bryman & Bell, 2007). Ethnography refers both to the research process, in this case through working and developing together as a group of business and academic professionals. It also refers to the written outcome, which is particularly important for this paper as the style of writing must ensure the research is presented to as wide and diverse an audience as possible. Within the context of writing up the theoretical scenarios and analysing the outcomes of the work this paper is striving to build a bridge between business and academia thus not using exclusionary language, technique or orthodoxy; some researchers would argue that this requirement is a substantive part of the ethnographers approach. The writing style used also considers the notion that the ‘truth’ of ethnography depends as much on its narrative and aesthetic appeal as it does on its data or theories; it does not seek to be based soundly on a 180

scientific field experiment nor on well established conceptual models but instead provides a rich story that might engage business to use academic models, and academics to enhance their thinking on business and real world issues (Puttnam, Bantz, Deetz, Mumby, & Van Maanen, 1993). It is difficult to empirically describe and theoretically explain yet leave the research process uncontaminated within the neo-empiricist methodology of ethnography. However the participant observation in the cultural context of a shared problem solving scenario, as students within a group, combined with the different backgrounds involved in the institutional setting, allowed the focus on an analytical goal to ‘add value’ to the original module challenge. The researchers were all part of the story that enabled the system of meaning to be explored; in addition the researchers were involved in a working partnership which provided the opportunity to observe how they interpreted the world and rationalised decisions (Johnson & Clark, 2006; Linstead, 1997). Many researchers have questioned the methodology of ethnography, particularly in a business context. Nevertheless strong arguments exist that ethnographers are not just sources of data but that the reaction of both researcher and participants to change reveals diverse cultures thus the social relationships that explain their logic can also become part of the researchers understanding of, in this case different, social lives (Hammersley & Atkinson, 1995; Van Maanen, 1988). In some ethnographic accounts it is the veil of secrecy which researchers feel is the essence of finding the ‘truth’ however ethical values meant that the idea of writing a paper as an outcome of the module exercise without including the other participants was incongruous. By sharing the opportunity there surfaced a lack of explicit agenda which allowed the participants to talk freely about matters that they would not formally realise would become part of the study. In the discourse it was important to allow theoretical concepts to emerge but clearly an ethical balance was needed and that some difficulties and contradictions would be encountered. Finally though, in noting down events, feelings, dilemmas and outcomes the challenge of ‘failure of memory’ or a ‘failure to witness correctly’ was checked through ‘member checking’ via the tri-partnership created by the research group (Biscomb, 2008; Ridley-Duff, 2006; Thomas, 1993; Thoms, 2006; Tsang, 2000).

11.3 Scenario planning Scenario development and planning are theoretical modelling techniques, which are based on a future, which has not yet happened, will be shaped by many actors and a multiplicity of events. The present situation and experiences will undoubtedly affect the ability of the scenario planner to place themselves in an uncertain future that may change through ignorance, surprise or volition but this does not stop businesses continuing to try to develop future policies in order to both maintain a sense of control and for planning purposes. The future will always be a temporal abstraction; a means of trying to push the limits of imagination in order to gain some conviction of what the future may bring (Brown, Rappert, & Webster, 2000; Cumming, Alcamo, Sala, Swart, & Zurek, 2005). 181

The scenario process entails thinking about causality between events, space, organisations, people, and so on, to make a prescribed, or set of prescribed assumptions. The invention of in-depth stories (or assumptions) with a logical plot and a narrative governing the manner in which events will unfold will, through available data, be more or less likely to take place – more or less predictable. However in using the theory of future scenarios a business or entrepreneur is not thinking of which future is more likely to happen or which preferred path to take, i.e. which strategy the organisation should move toward, but instead to prepare for decisions which can accommodate, or be ready for, any number of futures. The more these futures can be structured the greater the ability to be prepared for any number of outcomes (Cumming et al., 2005; Rothman, 2003; Schwartz, 1996). The Workshop The scenario process is nearly always undertaken in a workshop setting, involving those present in a shared exploration that will encourage strategic thinking and debate (whilst not wishing to write strategy), widen the field of vision of participants and allow long term options to be systematically developed and tested. It is essential that the participants fight free of the present, orchestrate opportunities, which will encompass diverse communities, be relevant, team led and legitimise a dialogue. In some ways this process is epitomised by such fiction as ‘The Matrix’ or ‘Blade Runner’ where the reader has to accept that an apostolic future may occur (Dick, 2002; Rothman, 2003). The workshop needed to first understand the process, which has been used by a number of authors in a diverse range of contexts. Ringland (2002) describes the scenarios developed at ICL following a major restructuring in 1993. The lack of specific question, wordy scenario presentation, inadequate graphics, lack of planning framework, strong trends demolishing avenues of thought, lack of blue sky thinking and only developing three scenarios provided a weak and underdeveloped outcome. Further refinement was needed and a second project was carried out that specifically looked at the ICL product portfolio over a ten year time frame. Rothman (2003) subsequently built a model of the scenario process which ensured the ‘story of the present’ and key elements were provided, this was followed by understanding the driving forces, critical uncertainties and boundaries (both spatial and temporal) before storylines and images of the future could be build. The simpler the instructions of how to build the scenario the more successful the outcome should be and ‘Venice Visions’ provide pictorial and graphic scenarios which the workshop group could easily follow (Ringland, 2002; Rothman, 2003). In brief the scenario development workshop had to first define the scenario question, then determine the focus (which needed access to relevant information about both the subject and the area), surface the driving factors (by using PEST or other systematic method), avoid myopia and finally to determine the timescale. It had to finish by presenting the scenario development to the wider cohort of students and the modules academic tutors.

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11.4 Scenario development Scenario development followed the briefing provided by the module tutors. There were a clear series of nine steps to be followed, which were introduced through a theoretical discourse and illustrated through both published and non-published examples. The workgroup used this information to plan and prepare their theoretical model. 11.4.1 Brainstorming the scenario question The workshop group all wanted to make the most of the opportunity for working together on this task and quickly identified key aspects that would determine their choice of scenario development. For John, the key aspect was to make this as relevant to his core research activity as possible, and thus maximise its use toward his ultimate thesis; Caroline, the academic, wanted to learn about the theoretical process, and work with eminent colleagues, but was confused and not a little irritated by having to form a group which would have to converse using email as they would be geographically disparate; Mike took a realistic, philosophical approach but wanted to accommodate the ‘task’ with as little overall effort as possible thus allowing him to concentrate on his core studies. It seemed a pragmatic choice to choose the subject, which was most easily accessible to information, i.e. the cruise sector, but the actual scenario question needed further thought. Looking at a topic other than her core thesis meant that Caroline quickly had another driver – to ensure that any extra work resulted in an output; and for an academic this means a paper or conference proceeding. If she could get information for teaching purposes, or contacts for placements, guest speakers or income generation networks that would be an additional work related bonus. Background and History of the Cruise Industry The modern cruise industry is less than 50 years old, despite there being a tradition of travelling for long periods at sea to other destinations in floating serviced accommodation (for instance trans-atlantic travel). It sits in a unique sector position straddling ‘maritime’ and ‘hospitality’, itself is encompassed within tourism. The sector has grown by an average 8.2% per annum since 1980, double the average growth of tourism in general (CLIA, 2006). The cruise industry is an oligopoly, in other words a market dominated by a few large firms. Marketing and competition within an oligopoly are often based around advertising, free gifts and offers, quality of service or ‘value added’, ‘follow the leader’ pricing, informal price agreements and occasional price wars. The notion that there are few sellers of the product, combined with product differentiation between companies, mean that cruise businesses can shape their prices to fit the market, whose differing images have suffered from either being too exclusively ‘posh’ or too like a ‘holiday camp’ (Tribe, 2005; Wie, 2003). The modern cruise industry is noted for the huge growth in complexity of the ship as a total destination. In the same way as the theme parks, such as Walt Disney World © or Centre Parcs © have provided a complete package of entertainment, accommodation, relaxation, food and beverage offers to encompass a range of tastes and ages, so cruise ships have developed to compete. The latest ship launched by Royal Caribbean Cruises is ‘Oasis of the 183

Seas’ the first of two ships forming a new class of large ocean going vessels. It accommodates up to 5,400 double occupancy passengers plus another 900 if third and fourth passengers are included. It is approximately 220,000 tons and cost the company around $1.24 billion. The ship features a casino, mini-golf course, multiple night clubs, comedy club, four swimming pools, volleyball, basket ball courts and theme parks. The ship features accommodation with two storey loft suites and balconies overlooking the sea or promenade and is split into themed areas, which bear a striking resemblance to theme park planning. The central zone houses the first ‘living park at sea’, with over 12,000 plants and 56 trees, and the ship boasts the latest in technology including GPS tagging for children aged three to 11 yrs old (Gibson, 2009; Macefield, 2009; STX Europe, 2008). The cruise ship is a classic centre of production; it has a high skills base and is very labour intensive. In the past there has been an inequality of life between the server and the served, with those employed working long hours at sea and, with berths at a premium, academic writers have describedstaff as ‘living in cramped accommodation’. There has been a reliance on gratuities for service staff to achieve earnings, which reach the European notion of ‘national minimum wage levels’ whereas at management level there was a much more lucrative salary status, equivalent to the better hotel brand standards. Most management had been home gown with an emphasis on in-house training and promotion. Comments have been very negative and often judged in a relative way; 16 hour days are now a thing of the past and whilst working hours are in excess of typical shore-side working environments, extended time-off is concentrated into leave periods and provides time to recapture family living and work/life balance. Minimum wages follow prescribed guidelines which are subject to both national and international scrutiny. It is important therefore to look at the sector with new eyes and realise that some of the negativity has changed dramatically in the last decade (Chin, 2008; Gibson, 2006, 2007; Peisley, 1995, 1998, 1999). Story of the Present In 2009, 245 cruise ships provide the sector with 18 million cruise tourists per annum. The total revenue of the global industry is $30 billion and it employs over 400,000 people ‘at sea’. There is an anticipated growth of 5% per annum, even in the worldwide economic downturn, and by 2020 it is expected that an additional 250,000 at sea employees will be needed. The current industry already has a recruitment challenge with an estimated 60,000 shortage. It is accepted that there is a shrinking labour market and there continues to be a poor perception of life at sea, despite the efforts of human resource management to provide cadet and culinary programmes, promotion opportunities, and realistic scenarios of life on board (Cruise Industry News, 2008). Despite the opportunities available and the growth in both size and perception of the cruise industry employment at sea is often considered as ‘time out’ and not a mainstream career. There are challenges to attract and retain staff particularly within a globalized multicultural workforce accommodated within a series of hierarchical identities which hark back to archaic echoes of ‘servitude’. That said the cruise sector are in an enviable position to create a new algorithm for human resource management as the occupancy statistics provide a lucrative and secure baseline for future development. Indeed it is the most successful of the hospitality accommodation sectors, winning the occupancy ‘war’ (Chin, 2008; Toh, Rivers, & Ling, 2004). 184

The industry has worked hard to change the misperceptions of life at sea. Whilst accommodations are small and lack the privacy and amenities of shore-side living staff are provided with a host of amenities that include opportunities for training and development. Employees are safeguarded by new minimum standards of salary and safety which all the main competitors exceed in order to attract and retain the best staff. This is an important message for ‘the matter expert’ to get across to the rest of the workgroup; that change has happened and staff who work in the sector are far better treated than the published accounts would have us believe. ‘The academic’ acknowledges the knowledge transfer taking place here which provides a much more balanced view of how to move forward in the analysis of the findings but also highlights a gap in published research of the sector. 11.4.2 Analysing the story of the present The background, history and story of the present provided an opportunity for reflection that agreed with John’s overarching perception that the human resource factor is the biggest concern facing the cruise industry as it sails into the latter third of the 21st Century. The key issue facing the industry therefore - how to achieve the staffing requirements of the future, particularly given that the industry is already confronting a staff resource shortage and is challenged by an ongoing retention problem; thus a scenario question emerged that asked ‘how to staff the cruise industry in 2020’. Referring to Ringland’s (2002) analysis of how ICL approached their scenarios the workshop group felt confident that they were being specific in their question and were time-bound within a framework that was reasonable to see the outcomes as ‘possible’. The boundaries to be considered in Rothman’s (2003) plan began to emerge as time-bound for the workshop members, rather than considerations of the industry. That said the workshop team became driven by their own discourse on wanting to do a professional presentation, and shared a vision of ‘appearing credible’ in front of their peers. 11.4.3 Driving forces A systematic tool for surfacing the driving forces needed to consider using lateral thinking, brainstorming, the understanding of ‘counter forces’ and to express these forces as nouns in order to avoid being judgemental. A PEST, STEP or TOWS matrix is commonly used to help in this type of external environment segmentation (White, 2004). In analysing the forces at play in the cruise industry, see table 11a, the creation of opportunities and the noting of threats must be at the fore. The dangers of segmenting the general environment also needs to be considered as it removes the elements of dynamic change in the industry as a whole, or the circuitous nature of each sector as it impacts on another force. Within the cruise industry history has already provided some indications of the challenge created by the global and international diversities which are argued to be an area of significant chaos for nations and ideologies, with or without a sector specific analysis (Huntingdon, 1996).

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Social:

Technological:

x x x x

Gen/M Expectations Population shrinkage Changing Work Values Perception of life and Sea – Loss of Freedom x Technology and Communications x Limited opportunity for learning at sea x Safety (AIB, 2007) x Culture and Gender Diversities (Hork, 2007) Economic:

x x x

x

x

x x

Global Financial Crisis impact on vacation market and overall labor supply Operating expenses, fuel, travel, building costs etc increasing Markets rates for labor increasing

x x

Exposure through internet Communication possibilities Increasing complexity of hardware (ships) Rate of growth/new building Size of ships (Marti, 2003)

Political:

x

x

x

x

Oversight and regulation tighter/more prohibitive Vessels Foreign-Flagged considered to be “outside” national conventions International Labor Organizations and Unions increasing presence and oversight Marine Labor conventions being ratified that will make labor increasingly expensive and place more employer restrictions (Limacaoco, 2008) Changing Markets/Different labor requirements

Table 11a: Driving Forces in Staffing the Cruise Industry: Social, Technological, Economic, Political It is also important to keep a sense of proportion, which could lead to dismissal of some aspects of social, technological, economic, environmental or political discourse, therefore leaving them out of the equation, or in this case the scenario. The workgroup focused on forces that were directly related to staffing and therefore the ‘environment’ as a segment of forces was not considered significant to this analysis. It was at this point that the workgroup reflected upon why this should be the case, myopia or short-sightedness was appearing to creep in. 11.4.4 Avoiding myopia The ‘matter expert’ was leading the thinking at this point. The consideration of a series of factors had been introduced with a predetermined outlook and a number of a priori perceptions. It was important for scenario planning to be successful that the workgroup considered how the list was developing and ensured that anyone could veto designating an item as pre-determined, or indeed as not important. 186

The academic voice provided solid evidence, even though the matter expert had predestined the source as ‘immaterial’, of growing considerations of both corporate social responsibility (CSR) and labour legislation as impacting on staffing issues. The group settled on changing work values, as opposed to CSR, as a descriptor of the factor with the help of the third team member who became a contributor to the blue sky thinking by not leaving them trapped into the academics convention of researching each and every factor but widening the scope into a less box like, or miniscule detail. Thus the challenge to academic thinking was for the scope of the theoretical tool being used, i.e. scenario analysis, and the subject matter to be less constraining. It would therefore become more useful and realistic to build a wider list of driving forces, which could then be assessed. Here the ethnographic discourse comes into its own as a research tool; the reflection upon the way the group was interacting together and using each other’s strengths was as curious in social discourse as it was practical in achieving the task. The workgroup had become far more receptive to the task as a business tool, which could be useful to the cruise industry, and to other industry sectors, but also to the learning available through doing it. There was a drive to ‘get it right’, to ‘be the best’, and a competitive edge to wanting praise from tutors at the presentation to the wider cohort. From the original brainstorming session the workgroup had turned to email to reach this point of the scenario planning journey. They now met in person to drive forward with the rest of the task. Their meetings were time-bound and very focused; whilst underpinned with this sense of getting it right there was an edginess to the discussions base. 11.4.5 Assessment and classification of the driving factors The instructions to the workgroup followed clear directions into how to assess the driving factors for the industry scenario being compiled. This would involve a time consuming letter and number code being given to each factor and plotting these on a graph using the cross fertilization of importance and certainty to determine their position. This is where this workgroup strayed from the instructions. Whilst developing the graph they found the time to really engage with the notation of the factors tedious and the plotting of all of these within the scales obtuse, so they just used words, see figure 11a. The workgroup knew that the outcome had to entail highlighting those critical factors which were more likely to occur and thus create their storylines to accommodate these so highlighted the key dimensions which would form their scenarios without plotting them into scenarios first – whether pragmatic or damaging to their end result this seemed a logical way to move forward, see figure 11b. Those that were certain and important, that were key dimensions (circled on the dimension chart), needed to be accommodated in the scenarios.

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Figure 11a: Plotting the Driving Factors

Figure 11b: Key Dimensions

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The analysis of the key dimensions gave a list of drivers, which would be used to shape the scenarios. These were listed as: • • • • • • • •

How can we change the image of working at sea…? Introducing new supplies of labour – changing the paradigms… Improving retention and making viable, long term careers versus short term “escapes”…. Making ships life extensions of life ashore… Connecting employees more holistically so that their lives continue – it’s not time out… Providing options/flexibility/freedom to come and go… Reward options – expanded growth potential: career and earnings…. Up-skilling/ re-skilling the workforce of the future

Within these parameters some difficult questions were posed. Some aspects touched on were ‘could families go to sea together and provide a better work/life balance for the employee’?; ‘could the servitude be replaced by a service culture which allowed less servile images to be created?; ‘how could the supply of labour include those considering a career to have a taste of life on board – perhaps through work placement opportunities;’ ‘how could the cultural diversity of onboard life be used to best advantage?’; ‘were there opportunities to hop on, and hop off cruises for both staff and consumers?’ The cruise industry ‘matter expert’ found some of the questions really tough to consider but in exploring the options some remarkable scenarios presented themselves. 11.4.6 Shaping Multiple Scenarios One of the clear messages which had come from the instructions and reading around scenario planning was the importance of graphic representation. Here the academic panicked but the stories they created, the name of John’s shipping line, and the involvement of some great characters in the wider student cohort gave a clear message on how these stories could be told. The images of the future became based on stories based on the stereotypes of Caribbean islands, see figure 11c. The workgroup made, and make, no apologies for having a non-researched stereotypical view of these islands because it helped their storyline and narrative. The Bahamas became the concept of the family orientated staffing future, St Lucia the romantic notion of a love affair, Jamaica the laid back service style of what needed to be done could just be left till tomorrow and finally a new island – the Desert Island, which would not need any staff at all. For each island there is a narrative based on staffing the cruise industry in 2020, see table 11b.

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Figure 11c: Images of the Future Bahamas – 'A Family Affair':

St Lucia – 'A Love Affair':

Married men and women can work on the same ship. Family apartments for staff available Kindergarten for staff (free) Best and free technological connections (picture-phones, internet and so on) to other family member like parents etc. Priority in holiday planning for married persons and families on board Special cultural offers for kids of staff and the families (see the world, experiences) Special language trainings for the kids of staff Special rates for other family members to visit families on board Special high quality housing and private schools for wives/husbands and kids on land (near coast)

Cruise industry is a sought out and highly accepted employer, It is trendy to work there because the skills needed on board (professionals in their job - no mistakes allowed) are highly accepted and required in other business fields on all levels (workers up to managers) Combinations of work and personal development (i.e. university studies) are offered and international accepted. To work on a ship is an accepted opportunity to gain international experience and is a proof of flexibility and an open minded personality. High payment to the different levels on board (above at land) increasing over the years combined with long term incentives (stock options). Accepted training area for managers because of the highly professional work in a 'microcosm' where everything has to work (on time). Desert Island ' Self-Catering': Backpackers join the ship which has communal kitchens, dining rooms, laundry facilities and washrooms. There is no entertainment provided. Vending machines provide Backpackers with precooked food and drink which they heat in microwaves. A retail vending service provides fresh food for Backpackers to

Jamaica - 'OK Man': ‘Manyana’ becomes the service mantra. Guests arrive to join the staff party. No hierarchy, no uniforms; staff work in consensus with decisions made by workers committee. No-one works more than six hours a day. When in port the ship’s crew are all off duty with a substitute team coming

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from shore to staff, clean and service the ship. Staff enjoy all the facilities that guests enjoy in their free time and are encouraged to mingle. Guests who want ‘service’ get it when staff are free to give it.

cook (or they can buy other foods when in port). Backpackers clean their own cabins using the laundry to obtain fresh linen if needed. Washrooms, dining rooms and communal rooms are fitted with plastic and metal furniture. Cleaning is by overhead ‘showers’ which come into action at fixed times. Shore excursions are organised by Backpacker interaction with onboard booking systems. Maintenance for vending or other repair tasks is by Backpackers logging onto the onboard booking system or pressing emergency buzzers. Service personnel therefore are limited to stocking the vending machines and maintaining the technology.

Table 11b: The Narratives Is one scenario more likely than another? Certainly they provide food for thought and help to suspend disbelief thus legitimising the dialogue for possible futures. Whether they could result in a strategic change for the industry we had to remember was not the concern. More important was ensuring that we could measure any one scenario as more robust or likely than another to become an industry future. 11.4.7 Testing the robustness of the scenarios At this point the instructions to the group had been to use a TOWS analysis to test strategies against likely scenarios. To seek out the opportunities and the threats the scenarios might highlight. The whole workgroup, though tired at this point (the previous four steps having taken three long evenings work) found a TOWS or SWOT analysis to be lacking in focus and hard to measure – the way the directions had been given we also found we would have to go back to the listing and numbering we had avoided earlier. Porters Five Forces St Lucia Trinidad Jamaica Bargaining Power of G G R Customers (employee) Bargaining Power of A A R Suppliers (employer) Threat of Substitute R R G Product Threat of New Entrants G G G Competitive Rivalry R R G Table 11c: Porters Five Forces (G = Green, A = Amber, R = Red)

Bahamas G

Desert Island G

G

G

G

G

G G

G G

The idea of using Porter’s five forces analysis was mooted by the academic and this took some explaining but eventually we decided it was a useful analysis tool for these scenarios as it would test their likelihood against the bargaining power of the employee and the employer, the threat of substitute products, the threat of new entrants and competitive rivalry (White, 2004). For each scenario we gave a plus or cross for the likelihood of its impact in each analysis section, we then gave a colour code to the signage of green, amber, red – international 191

traffic-light colours we felt would be understood indicating a scenario that was more or less likely to have to battle on or other of the five forces, see table 11c. For any scenario there is less a likelihood of new entrants to the industry because of the huge costs of the ships themselves whereas there is a possibility of substitute products, particularly if one competitor could win a staffing advantage by creating St Lucia or Trinidad. To find a final ‘score’ to a green plus we gave two points for robustness, for amber we gave one point and red nil. Thus St Lucia scored 5, Trinidad 5, Jamaica 6, Bahamas 9 and Desert Island a massive 10. Whilst this system had merit we then discussed whether the scenarios were likely to happen, both from a consumer and an employer’s point of view. Desert Island scored well against Porters five forces analysis but seemed unlikely to become an industry strategy. Therefore we needed a way to look at all the scenarios for strategic potential. We therefore scored the scenarios out of ten for ‘likelihood’ based on the current patterns of the cruise industry i.e. the demand for service from consumers, the likelihood of a new entrant to the sector offering a new product and so on. We then multiplied the results together to find out which scenarios to explore further and which to monitor, see table 11d. Scenario St Lucia

Robustness 5

Likelihood 8

Trinidad

5

7

Jamaica

6

2

Bahamas

9

4

Desert island

10

4

Score 40 Robust 35 Explore 12 Monitor 36 Explore 40 Robust

Table 11d: Robustness and Likelihood Two robust scenarios which might develop into industry strategies emerged: St Lucia, where a love affair with the career and industry could be created, or Desert Island, where there was a market that required no service and no staff to satisfy guest needs. Jamaica, which provided a ‘manyana’ service mantra, was neither robust, nor likely, but the competition should be monitored in case such a product became available, and popular. 11.4.8 Strategic implications of the scenarios To develop a strategy which provided for the St Lucia scenario was the crux of the original question so using the scenario to shape a robust strategy for the industry in going forward focused on ‘becoming a sought out and highly acceptable employer providing highly transferable international experiences, skills and knowledge supported by an effective remuneration and promotion package’. No tall order then but in essence we felt this had been a circuitous journey: the evaluation of the actions needed to develop such a strategy had led us back to the questions asked in the key dimensions of the development including changing the image of working at sea, new labour supplies, improving retention and so on. 192

What became noticeable was that the matter expert had softened his answers to options presented by the other group members, had incorporated ideas previously dismissed as unworkable, and was using key aspects from a number of the other scenarios to explore in detail how staff actually working in the industry could be developed, accommodated, and promoted. 11.4.9 Scenario presentations and discussions The culmination for the workgroup was to present their scenario to the student cohort and receive feedback from the module tutors. Applying the theory to a suitable subject question and developing appropriate scenarios was a new concept for all the students. This workgroup were the third group to present. As they heard the others they became confident that they had developed a professional presentation, included all aspects of the brief and provided a very good theoretical perspective to a real life business problem. They had also developed suitable graphics, which told their narrative and an assurance grew between them that they would be praised for their work. What became apparent however was that the previous groups were receiving harsh feedback. Whilst they had not fully followed the brief few positives were being commented upon. The academic began to become uncomfortable, not because of their own forthcoming presentation but because harsh criticism in front of peers is difficult and would not usually be the case in undergraduate or M level work. There was discomfort too in the wider cohort visible through body language, eye contact and some veiled verbal comments. But no one said anything; the power in the room was with the module tutors. Nevertheless filled with their professional confidence the workgroup gave their presentation – and found they had not applied the scenario planning theory effectively, had used strategic planning rather than scenario planning to drive forward their thinking, and exasperated, rather than uplifted their tutors. The student cohort however was effusive in their praise: “You have led us on the standard of presentations for the future” “You are the guys to beat” “Well done – it was really interesting and we thought you applied the theory well.” In the break that followed it became apparent that the members of the workgroup had taken the critique of the work very differently. The academic was really upset that all that work had received so little positive response, the matter expert was philosophical about the game that was being played in the world in which we had pitched the work and the very positive thoughts and discussions the workgroup had begun on a topic close to his heart, the blue sky thinker was pleased it was over, revelled in the student praise of the work, and moved on to the next issue. There were a further two presentations that followed ours. Each workgroup had taken slightly different approaches to the brief, none had followed each step exactly and some had not completed the task, but there was enthusiasm for the outcomes they had reached.

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11.5 Conclusions Scenario planning proved an effective tool for the exploration of serious issues that may affect businesses in the future. The framework provided a way of logically following a given path to reach conclusions about the possible and probable futures that may face any given sector but researching wider and deeper into scenario planning the key feature of use seems to be in more environmental and ecological scenarios using the changing features of the planet to provide the backdrop (Cumming et al., 2005). There has also been much work developed to provide a more ordered and structured set of attributes necessary for successful scenarios, based on Schwarz’s earlier work. Reading this provided consolidation that the gap between the email communication of the group, and then meeting to discuss ideas was reflected in the actual tips for success. Also included was the notion of interim research, which may take four to six weeks to complete. To be truly successful the scenario development needed ownership. In truth both this workgroup and other students suffered because only one topic could be chosen. For the others in the group that topic may not have had such resonance, meaning and therefore ownership (Oglivey & Schwartz, 2004). The positive view of the matter expert is testament to the success of the model. The ideas generated and solutions sought meant that the time taken on the project was deemed ‘successful’; the results provided good food for thought and were worthy of further exploration. The results supported the notion of strategic planners that scenario building provides a good focus for debate and discourse that can lead to strategic change and positive actions however the process was not easy to follow. Within a company a professional mentor might be used to help with the workshops, which would allow a more successful (based on the theory) outcome. Scenario development therefore needs time, resources, professional guidance and commitment to be truly effective (Brown et al., 2000; Cumming et al., 2005; Rothman, 2003). The subject chosen for the workgroup had to be relevant. The cruise industry provided a fascinating topic in which to develop additional knowledge of scenario development as it had to accommodate a historical, present day and future perspective. The challenges of multi cultural crews who accommodate a wide range of skills, knowledge and diversity in both task orientated and service production is immense. The industry has to both crew the ship as part of their maritime obligations and provide a hospitality based service to guests who come on board for a unique experience. More than any other hospitality sector the food, beverages and entertainment are key as the floating ‘hotel’ provides a full-board service with little respite from its enclosed perspective. Guests themselves are diverse and challenging. Whilst a wide range of age groups enjoy the cruise genre they do so with an equally diverse variety of needs, desires and aspirations which need to be satisfied. Amongst this background competitive advantage and growth add complex layers challenging the sector to provide bigger, better, service led operations. The key to providing guest satisfaction lies with staff who appreciate the opportunities within the sector whilst acclimatising to very different accommodation, that may lack the privacy and communication tools of on-shore life. They also need to adjust to a time difference in their work/life balance working whilst the ship is at sea perhaps without a 194

notional ‘weekend’. This is balanced by onshore extended leave but the notion that there is a sustainable career which can encompass a true family life, providing work/life balance for all sectors of staff, is currently a remote pipe dream. Whilst holidays for families to accompany staff on board could possibly be accommodated the idea that family apartments may be made available for permanent living would need a redesign of shipboard life. Not impossible but challenging. A period of ship board life with on-land promotion would seem a more sustainable career development. Recruiting enough staff to both crew and serve on board cruise ships is a challenge. Whilst marine crew can be recruited from a reducing container market, although there is still a reported shortfall at officer level, the numbers of hospitality staff needed in all areas of the ship remain an employment challenge. Recruitment in Southeast Asia and South America provide rich hunting grounds for suitable ‘servile’ staff but this alone provides an onboard difficulty in bringing all staff up to the level of service excellence guests expect. Training of staff in the hospitality sector of the cruise ship is diverse and engaging. The plans of companies such as Royal Caribbean Cruises to provide cadet and culinary programmes is exciting but to move those service staff into management positions will need the engagement of higher level qualifications and more diverse educational programmes. The space needed to train potential staff, through work placements, as well as the time for those already on board to study for advanced qualifications needs to be made available in order to assist with training as a retention strategy. The scenario development workshop allowed business and academics to work together on a project, which provided an excellent opportunity to transfer knowledge. The knowledge transfer was not limited to the industry problem although the workshop discourse provided a crossover of knowledge on research skills, matter expertise, understanding of the issues, solutions already tried and rejected, or issues which prevented certain courses of action. The greatest outcome was the observation of how the different genres would work together; the social interaction and differences in voices, philosophies and culture. The interaction supported the notion that there is indeed a clash of cultures between higher education and the private sector, not least of which is that management decisions are often influenced by case history and clear cut decisions became the natural outcomes of discussions (Beech & Dewhurst, 2008). There was a much more reflective and indeed challenging approach to this from the academic perspective. That something couldn’t be done because of the number of berths in the ship, and the differences between the liner and a hotel, took some understanding. This highlighted clearly that in writing articles on business and management theory to provide insights for managing change academics must understand the logistics of industry, otherwise it just will not work in practice. Nevertheless the academic perspective added value. More opportunities should be grasped to engage academia and business professionals in all types of discourse so that knowledge transfer, in its truest sense, can flow in a circumambient paradigm, informing and challenging the status quo on both sides. Finally qualitative researchers need to demonstrate an educated awareness of the consequences of particular methodological decisions during a research investigation, whether through the production of data or in writing style. Indeed in understanding management research there is an underlying philosophy which positively encourages 195

reflective practice in accommodating the notion of validity to the research; the researchers self criticism being a large contributor to this affirmation, or validity, of findings (Biscomb, 2008; Johnson, Buehring, Cassell, & Symon, 2006; Johnson & Dubberley, 2000; Seale, 1999). The ethnographic approach to this paper has allowed the nuances of conversations, of observation of social realities, the descriptions in patterns of inter-subjective meanings to be explored, but has not separated the knower-researcher from the inductive descriptions. In addition the research cannot make a claim that the approach taken by the actors in this workshop would be replicated in other circumstances, the sample is much too small. There is however an authenticity, a reality which has been fairly expressed, and checked by member corroboration. The reflexive understanding of the research confirmed the a priori knowledge and understanding of the players, through the role adoption of the group members, the matter expert, the academic and the blue sky thinker. This in itself would suggest a move toward a critical theorist, rather than a neo empiricist approach to understanding ‘the managerial hegemony’ (Johnson et al., 2006). Over and above the epistemological or ontological arguments however this research has benefitted from an ethnographic approach because of the writing style it allows. The inclusion of self thoughts, feelings, and emotions has allowed a freedom in expression whose value is in its idiom and openness; its ability to be understood. Finally the whole process was illuminating and helpful in ‘thinking outside the box’ for all concerned, assisted by the philosophical industry approach that saw the results for what they were and leaves a real strategic opportunity to explore further the delivering of a new, less resource intensive, level of service to a ‘different’ market segment. The workshop has highlighted the importance for industry to work more closely with academics to help research solutions for difficult and complex problems and the reverse is also true; the workshop had the benefit of exploring a complex theoretical concept in a challenging but safe way. This type of investigation assists academics in understanding the application of theory to practice in the real world – it provided real knowledge transfer. Would the industry use a scenario development approach to consider the future of the cruise sector again? The jury is still out!

11.6 References x

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AIB. (2007). Factors affecting fatigue and its frequency in bridge work (Publication. Retrieved 13th April 2009, from Finland: Accident Investigtion Board (AIB) http:// www.onenettonmuusturtkinta.fi/42952.htm Beech, J., & Dewhurst, H. (2008). The Foundation Degree in Travel Operatons Management. Link 22, 2-4 Biscomb, K. (2008). Three Generations of Lancashire Women. Paper presented at the International Womens Day, University of Wolverhampton Brown, N., Rappert, B., & Webster, A. (Eds.). (2000). Contested Futures. Aldershot: Ashgate. Bryman, A., & Bell, E. (2007). Business Research Methods (2nd, ed.). Oxford: Oxford University Press Chin, C. B. N. (2008). Labor Flexibilization at Sea. International Feminist Journal of Politics., 10(1), 1-18

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CLIA. (2006). Cruise Industry Overview (Publication. Retrieved 13th April 2009, from CLIA: http://www.cruising.org/press/overview%20226/ind_overview.cfm Cruise Industry News (2008). Focus: meeting crew needs. Cruise Industry News Quarterly, Winter 2008/2009 Cumming, G. S., Alcamo, J., Sala, O., Swart, R., & Zurek, M. (2005) Are existing global scenarios consistent with ecological feedback. Ecosystems, 8(2), 143-152 Darwin, J. (2008). Contemporary Issues in Organisation and Management. Course Guide. DBA 2008., Sheffield Hallam University(Unpublished Materials) Dick, P. (2002). The Simulacra. New York: Vintage Books Gibson, P. (2006) Cruise Operations Management. Burlington: Butterworth-Heinemann Gibson, P. (2007). Who works while others play? International Journal of Hospitality Management, 27, 42-52 Gibson, P. (2009). Personal Communication via e-mail to C. Wiscombe. 10th February 2009. Hammersley, M., & Atkinson, P. (1995). Ethography: principles and practices (2nd, ed.). London: Routledge Hork, J. (2007). Cultural and Gender Diversities affecting the shipping interface (Publication. Retrieved 13th April 2009: http://www.he-alert.org/doucments/ published/he00765.pdf Huntingdon, S. (1996). The Clash of Civilisations and the remaking of the World Order. New York: Simon and Schuster Johnson, P., Buehring, A., Cassell, C., & Symon, G. (2006). Evaluating qualitative management research: towards a contingent criteriology. International Journal of Management Reviews, 8(3), 131-156 Johnson, P., & Clark, M. (2006). Mapping the terrain: An overview of business and management research methodologies. In P. Johnson & M. Clark (Eds.), Business and Management Research methods: recent methodological debates and disputes in Business and Management Research. London: Sage Publications Johnson, P., & Dubberley, J. (2000). Understanding Management Research. London: Sage Publications Limacaoco, C. S. (2008). CSR – a tool for recruitment and retention of seafarers in The Internatioal Maritime Human Element Bulletin (Publication. Retrieved 13th April 2009: http://www.he-alert.org/documents/published/he00375.pdf Linstead, S. (1997). The Social Anthropology of Management. In P. Johnson & M. Clark (Eds.), Business and Management Research Methods: recent metholodogical debates and disputes in Business and Management Resarch. London: Sage Publications Macefield, S. (2009). GPS tagging for children on Oasis of the Seas. Telegraph, from http://www.telegraph.co.uk/travel/cruises/cruise-news/6669230/gps-tagging-forchildren-on-oasis-of-the-seas.html Marti, B. E. (2003). Trends in world and extended length cruising (1985-2002) Marine Policy, 28, 199-211 Oglivey, J., & Schwartz, P. (2004). Plotting your Scenarios (Publication. Retrieved 30th September 2009, from GBN Global Business Network: http://www.gbn.com Peisley, T. (1995). The Cruise Ship Industry to the 21st Century. EIU Travel and Tourist Analyst, 2, 4-25 Peisley, T. (1998). The North American Cruise Market. EIU Travel and Tourist Analyst, 4, 1-22 197

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Peisley, T. (1999). The Cruise Business in Asia Pacific EIU Travel and Tourist Analyst, 1, 120 Puttnam, L. L., Bantz, C., Deetz, S., Mumby, D., & Van Maanen, J. (1993). Ethnography versus Critical Theory: Debating Organisational Research. Journal of Management Enquiry, 2(3), 221-235 Ridley-Duff, R. (2006). Contingent Ethics in Critical Ethnography. Sheffield Business School. Ringland, G. (2002). Scenarios in Business. Chichester: John Wiley and Sons Ltd. Rothman, D. (2003). Scenarios: structured thinking about the future. Lectures in Integrated Assessment. In International Centre for Integrated Assessment and Sustainable development (Eds.), Summer Course Book . Available from: http://www. icis.unimaas.nl/news/downs/SummerCourseBook_final.pdf#page=92 Schwartz, P. (1996). The Art of the Long View. New York: Doubleday Seale, C. F. (1999). The quality of qualitative research. London: Sage STX Europe. (2008). Creating the Incredible: Oasis of the Seas and Allure of the Seas (Publication. Retrieved 27th March 2009, from STX Europe: http://www.cruiseweb. nl/images/oasisoftheseas/Brochure2.pdf Thomas, J. (1993). Doing Critical Ethnography. London: Sage Publications Thoms, V. (2006). Reading Human Sex: The challenges of a feminist identity through time and space. European Journal of Womens Studies, 13, 357-371 Toh, R., Rivers, M. J., & Ling, T. W. (2004) Room Occupancies: cruise lines out-do the hotel. International Journal of Hospitality Management, 24, 121-135 Tribe, J. (2005). The economics of recreation, leisure and tourism (3rd ed.). Oxford: Elsevier. Tsang, T. (2000). Let me tell you a story: a narrative exploration of identity in high performance sport. Sociology of Sport, 17, 44-45 Van Maanen, V. (1988). Tales from the field: on writing ethnography. Chicago: University of Chicago Press White, C. (2004). Stategic Management. Basingstoke: Palgrave Macmillan Wie, B.-W. (2003). A dynamic model of strategic capacity investment in the cruise line industry. Tourism Management, 26, 203-217

12.0 Crew retention Wolfgang Lukas Bremerhaven University of Applied Sciences Bremerhaven, Germany

Abstract Crew retention is a crucial issue in the whole maritime sector, as job conditions on sea require long periods on duty and rather long ones off duty. During those times the both the responsible managers and the team colleagues are out of view, and even the formal employment might be discontinued for that period. Typical retention concepts and instruments in- and outside the cruise industry are examined in order to identify both typical approaches and practices as well as to reconstruct the underlying expression of corporate values and the assumptions about employees’ values and motivation. Keywords: Human Resources, labour market, employee retention

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_12, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

12.1 Why retention? Benefits of short-termed employments In general low turnover rates respectively high retention rates of staff are regarded as positive and desirable. From a managerial point of view it seems to be reasonable to check if there is a real need and a business benefit before new activities and changes should be started. One of the benefits not to bind employees long termed is obviously a higher degree of flexibility regarding the human resources. This refers both to total capacity as well as to the freedom of decision to choose a better candidate for the next contract. To follow such a way of human resources management requires some basic conditions. One of them is a sufficient supply of new workforce with the necessary capabilities in the labour market or low qualifications costs including the costs for vocational adjustment until the employee shows the required performance on the job. A second condition could be a continuous rejuvenation of the staff, with would be quite compatible to the idea, that travelling through the world on a cruise vessel might be a job for some time but not lifelong. A third condition would be low recruitment costs, both looking at direct costs like those of recruiting agencies and indirect costs for handling the recruitment process in the Human Resources department and the operational units onboard. Linked with those conditions is the kind of work: As long as the job to be done is highly standardised among the industry, a rotation between companies would be easy or even beneficial for the employer to get knowledge and experiences from competitors. This works as long as the differentiation between the products in the market is not very high. An adjacent aspect is the standardisation of the jobs as such, when they are less characterised by the individuality of the jobholder, the personal appearance and competences. A high level of job standardisation would allow an easier way of planning and steering including the substitution of employees without difficulty. These are typical features of an industrialised development stage of a branch. This issue has been widely discussed as McDonaldisation of the cruise industry (see Ritzer and Liska 1997, Weaver 2005). How a post-industrial design of the cruise branch could look like, is just left as an open question.

12.2 Definitions and relevance Retention is a widely discussed and promoted issue in the maritime sector, most of the publications and statements refer to the merchant sector. The current market break has not deferred the topic. Sean T. Connaughton, former Administrator of the US Maritime Administration and today Secretary of Transportation for the Commonwealth of Virginia stated in April 2009 in his address to maritime educators at the Maritime Education Summit: “Surprisingly, even though current economic conditions have slowed the demand for new personnel and increased retention of existing staff, the seafarer job market remains strong.” A that time Connaughton was Corporate Vice President for Government Affair in the American Bureau of Shipping (ABS), which might indicate that such a statement is not just motivated to uphold or generate consulting or technical services to increase retention rates. 200

The players in the field of retention management are both the crewing agencies and/or cruise companies. As the first part of the recruitment process is mostly delivered by crewing agencies high retention rates are a quality indicator. A standard definition of retention in the maritime sector has been set by INTERTANKO, the International Association of Independent Tanker Owners. INTERTANKO (2008) defines officer retention as:

[

% Retention Rate (RR) = 100 – {S – (UT + BT) / AE} x 100

]

Where: x RR = Officer Retention Rate x S = Total Number of Terminations from whatever cause (in effect this means the total number of employees that have left the company for whatever reason x UT = Unavoidable Terminations (i.e. retirement or long-term illness) x BT = Beneficial Terminations (i.e. sometimes those staff that so leave, provide benefit to the company by virtue of leaving, for example under-performers x AE = The average number of employees working for the company during the same period as calculated, this should be any period of 12 months

Source: Intertanko 2008 The Norwegian Research Organisation SINTEF has integrated this formula (SINTEF 2009, 49) in a project about ship performance indicators (Morel and Sleire 2009), where the “retention rate” is one element of “crew management”, which again is summed up with other indicators in a “HR indicator”. A look at the involved companies (http://www.sintef.no/Projectweb/Shipping-KPI/ShippingKPI-project/Participants/) in this large scale project indicates that cruise companies do not seem to participate. It has to be mentioned that the definition above is not an established standard. Payanides (2008) applied a definition based on an annual basis, where he compares the number of officers at year end who were in our employment at the beginning of the year with the number of officers at the beginning of the year. Crewing agencies sometimes use retention rates to demonstrate their quality of services. Aboitiz Jebsens published a 92% crew retention rate (Jebsencrew n.d.), the same figure like ASP Shipmanagement (ASP n.d.), V.Ships published 85% (n.d.), Unicom Management Services (Cyprus) Ltd. Discloses “well over 80% employee retention” (Unicom n.d.), Crew Unlimited (n.d.) even publish a list with reasons for and measures against crew fluctuation similar like the Globe Master Management Philippines, Inc. (n.d.), who place retention measures in their promotional presentation. Research data about retention rate of cruise companies are not publicly available, but a least a study promoted by Navitas Telecom – a supplier of satellite communication equipment. This study (Pinel 2007, 7) conducted with “Work on Ships” and “Wireless Maritime Services” identified that “almost a quarter of crew surveyed have worked for two or three different cruise companies in the last three years”. In a follow up study (Pinel 2009, 5) stated that 201

“31% of crew are not working in their chosen careers and will work on board until other opportunities arise.” A further statement underlines the relevance of this issue. Erling Frydenberg, President Cruise Division of Executive Search International, pointed out about crewing that “it takes 2 – 3 contracts for someone to truly know their role” (Frydenberg 2009, 7). Panayides (2008, 10) regards limits on crew resources as “One of the most pressing problems for shipping companies and ship operators” and states that “ship operators should increase crew retention”. Although those results from the cruise industry are not scientifically proven, they might be used as an indicator that it would be worth to think about managerial action on retention. A recent study in the hotel branch (Chi and Gursoy 2009) showed a direct relationship between customer satisfaction and employee satisfaction and between employee satisfaction and corporate financial performance. With the decrease of staff turnover the improvement in corporate performance might be the even more attractive aspect to work on crew retention than just cost issues.

12.3 Reasons for retention policies An indicator is just a measurement. Managerial pressure to act may be differentiated in three perspectives, the economic, the organisational, and the cultural view. From an economic perspective view several direct and indirect costs of crew turnover may be considered: the cost of finalizing the existing contract, where both operational units and the human resources function are mainly involved, costs of recruitment as such including transaction costs for the co-operation with the crewing agency, and qualification costs for the new employee. Those costs have to be multiplied with a risk factor as new employees, unknown to the cruise company yet, may bear a higher probability to fail in the new job than well known employees and if they do so, transaction costs to bridge the capacity gap have to be added. The second perspective is the organisational view, where the degree of individual and organisational efficiency increases with routine, experience and well functioning teams. Sharpley and Forster (2003) showed those effects in their research about hotel staff in Cyprus. Reliability and trust at an individual level may improve the leadership relationship. Shortcomings induced by a lot of new ideas might be deducted from this positive side of the retention balance sheet. A further aspect regarding the need for a retention policy is linked with the substitutability of specific employee groups, assumed there are sufficient candidates in the market. In general substitutability decreases with the level of knowledge and responsibility. The third perspective is linked with corporate culture, which is both a framework for the work of the crew as well as a unique feature of product towards the customer as the work of many crew members is in direct relationship with the customer. This cultural specification is the difference between a kind of industrialised work design and the situation of having 202

people, who do not only fulfil standard tasks but as well represent the more ethereal rules and laws of corporate culture.

12.4 Concepts of retention management 12.4.1 Analysis of reasons for retention To achieve an understanding about the specifics of retention in the company both quantitative and qualitative measures should be taken. The easiest way is just to make use of available data and to identify evidence for retention respectively fluctuation issues. Intended leaves due to retirement, lack of performance or job cuts should be handled separately from unwanted leaves. A specific standard instrument is the exit interview (see Bonn and Forbringer 1992, 48ff). BP Shipping’s Fleet Operations Vice-president David Williamson stated “the exit interviews, conducted by BP Maritime Services when this happens, clearly identify that when people leave it is often a lifestyle choice to come ashore” (Urrutia 2008, 23). Other often available sources are data in the personnel files, performance records, employee and passenger surveys and information available from the managers. If any retention concept should be efficient, it has to address the employees’ needs. The categorisation, where to look for the relevant retention factors has to follow both the employees’ needs, the characteristics of the job to be done including leadership relations, relations to peers and the organisational climate and culture. 12.4.2 The job embeddedness approach The spread of terminations – “snowball effect” – has been show in a study by Krackhardt and Porter (1986). The social network approach is a predecessor of the job embeddedness approach, which become popular later. For the management in human resources departments a short termed operational approach could be to specifically address the leaders of organisational units immediately, where terminations show up. A research approach, which could be adapted for the cruise industry is used in the study of Tepeci and Bartlett (2002), where they investigated the effects on employees’ job satisfaction using the variables of organisational culture, individual values, and the fit between the person and the organisation. A comprehensive approach has been set up by Mitchell et al. 2001, who define embeddedness as links and fits, which bind the employee as well as sacrifices, which would an employee regard as disadvantage, when leaving. Links are formal or information relations. “Embeddedness suggests that a number of strands connect an employee and his or her family in a social, psychological, and financial web that includes work and non-work friends, groups, the community, and the physical environment in which he or she lives” (Mitchell et.al. 2001, 8). The fits refer to an “employee’s personal values, career goals and plans for the future” both within the social environment and the organisation. Sacrifices are material or non-material benefits, which are not-portable as well as the risk involved with the change of the job, personal and social drawbacks. 203

The job embeddedness approach has generated a broad range of studies about retention, but not yet for the cruise industry, whose specific job environment would need a particular view. In the adjacent hospitality sector the job embeddedness approach has been applied and customized in the studies of Hausknecht et al. (2009) and Tracey (2008). 12.4.3 Short term measures The standard measures to improve retention can be sorted in short and long term measures. The typical instrument if employees are on the brink of termination, a monetary incentive might save the day, but usually address a symptom, but not the root. Moreover those kinds of monetary interventions usually have an impact on further employees. If the salary level as such is a main driver of fluctuation an adaptation might be appropriate. A second mean, which became very popular for the last years is the improvement of onboard communication tools, which enable the crew to stay in contact with their social network ashore, both via phone or internet. Thereby a major hardship of working onboard will be compensated. 12.4.4 Long term measures With a data basis of hotel staff in Kansas and Missouri Chi and Gursoy (2009) showed that “training satisfaction was found to affect job satisfaction significantly (standardized regression coefficients .65, P = .000). Job satisfaction was a significant predictor of intention to stay (standardized regression coefficients .82, P = .000).” Professional development both regarding professionals as well as career are regarded as motivating factor which increases the close link with the company and contributes to better performance. Lee and Way (2009) used a differentiated approach to work satisfaction based as well on hotel staff with heterogeneous ethnic background – a population close that what is often found on cruise vessels. Their main research intention is to demonstrate the interrelation of various aspects of overall job satisfaction than to identify a single reason of displeasure. Various studies have shown that it is not only the commitment to the job, which creates employee retention but as well the commitment to the company. In this respect a cultural approach opens additional perspectives. Especially in a branch like cruise industry, where service in an environment of good atmosphere is a major product feature the relevancy of culture as an important aspect of work might be assumed. To identify and bind people, who love this specific kind of work (including a strong focus on those aspects already with the recruitment) is in the scope of retention policy as well as the identification and development of a specific corporate culture both towards customers and crew.

12.5 Leadership To address any kind of problem with staff as a leadership problem is a truism. Instead of general pleas for better leaders the Abrashoff example should be mentioned. As a captain on an American war vessel he was able to improve the retention rate from 2% up to 98% (see Abrashoff 2001, 2002). The main driver in this process is a significant shift in leadership, which made Abrashoff a popular writer for business managers. 204

12.6 Choosing the right employees In some cases fluctuation is a result that employees have found out that this kind of job is the wrong one, either that they have received false information about the job during the recruitment process or they did not really make up their mind about the implications to work on board or other aspects in the personality or the social environment of the person. In those cases retention programs would not work, as the reason for fluctuation is beyond the range of the retention instruments. A typical mean to reduce this kind of retention is a more precise recruitment process, which could start with the identification of typical feature of employees in this category by analysing available data. Retention policy refers to its starting point, the recruitment process. With a selection of those employees, who will probably stay for a longer time, the basis for a successful retention policy is built.

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Abrashoff, M. (2001). Retention through redemption. Harvard Business Review, Feb 01 Abrashoff, M. (2002). It's your ship: Management techniques from the best damn ship in the Navy. New York, Warner Chi, C. G. and Gursoy, D. (2009). Employee satisfaction, customer satisfaction, and financial performance: An empirical examination. In International Journal of Hospitality Management, 28, 2, 245-253 Chun-Fang Chiang, C., Back, K. and Canter, D. (2009). The impact of employee training on job satisfaction and intention to stay in the hotel industry. Journal of Human Resources in Hospitality & Tourism, 4, 2, 99-118 Frydenberg, E. (2009). Crewing & quality control. Presentation at the Seatrade Europe, Hamburg, 16th September, URL: http://www.seatrade-downloads.com/europe09/ presentations/Wednesday/Hospitality_At_Sea_Forum/Hotel%20Operations/Frydenberg E.ppt (assessed 9.5.2011) Hausknecht, J.P, Rodda, J.M. and Howard, M.J. (2009). Targeted employee retention: Performance-based and job-related differences in reported reasons for staying. In Human Resource Management, 48, 2, 269 – 288 INTERTANKO (2008). INTERTANKO Officer retention formula, URL: http://www. intertanko.com/upload/OfficerRetentionFormula%20Corrected%2012%20March%20200 8.pdf (assessed 9.5.2011) Krackhardt, D. and Porter, L.W. (1986). The snowball effect: Turnover embedded in communication networks. In Journal of Applied Psychology, 71, 1, 50-55 Mitchell, T.R., Holtom, B:C:, Lee, T.W., Sablynski, C.J. and Erez, M. (2001). Why people stay. Using job embeddedness to predict voluntary turnover. In Academy of Management Journal, 44, 1102-1122 Morel, G. and Sleire, H. (2009). The shipping KPI standard, URL: http://www.sintef.no/ Projectweb/Shipping-KPI/ (assessed 16.1.2010) n.a. (2009). Sean Connaughton delivers keynote speech at Maritime Education Summit. In The Maritime Executive, The Maritime Executive, April 23rd 2009, URL: http://www.maritime-executive.com/article/2009-04-23-sean-connaughton-deliverskeynote-speech-maritime-education-summit/ (assessed 9.5.2011) 205

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Panayides, P.M. (2008). Effective ship management. Presentation at the Copenhagen Business School, 6th November, URL: http://uk.cbs.dk/.../Blue%20Event%2014%20%20Presentation%20-%20Photis%20Panayides.pdf (assessed 16.1.2010) Pinel, B. (2007). Crew morale & retention on board cruise ships URL: http://www. navitastelecom.com/upload/Crewretention%20ANDmoralesurveyresults.pps (assessed 16.1.2010) Pinel, B. (2009). The crewing challenge. Presentation at the Sea Asia, Singapore, 23rd April, URL: http//:www.seatrade-downloads.com/sea_asia_2009/presentations/.../ Bo_Pinel. ppt (assessed 16.1.2010) Ritzer, G. & Liska, A. (1997). ‘McDisneyization’ and ‘post-tourism’. Complementary perspectives on contemporary tourism. In: Rojekt, C. & Urry, J. (eds) Touring cultures: Transformations of travel and theory. London: Routledge, 96-109 Sharpley, R. and Forster, G. (2003). The implications of hotel employee attitudes for the development of quality tourism: The case of Cyprus. In: Tourism Management, 24, 6, 687-697 SINTEF (2009). The shipping KPI standard. KPI definitions V 1.5 2009-12-15, URL: http://www.sintef.no/project/Shipping_KPI/Downloads/The%20Shipping%20KPI%20Stan dard%20v1%205_APPROVED-Distribution%20version.pdf (assessed 9.5.2011) Tepeci, M. and Bartlett, A. L. B. (2002). The hospitality industry culture profile: a measure of individual values, organizational culture, and person–organization fit as predictors of job satisfaction and behavioral intentions. In International Journal of Hospitality Management, 21, 2, 151-170 Tracey, J.B. (2008). Contextual factors and cost profiles associated with employee turnover. In Cornell Hospitality Quarterly, 49, 1, 12-27 Urrutia, Pablo (ed) (2008). the flag. BP shipping news. Issue 29 - May 2008 Weaver, A. (2005). The McDonaldization thesis and cruise tourism. In Annals of Tourism Research, 32, 2, 346–366 Jebsencrew (n.d.) URL: http://www.jebsencrew.com/852.html (assessed 9.5.2011) ASP (n.d.) URL http://www.thedigitalship.com/powerpoints/HK06/TMSAreport.pdf (assessed 9.5.2011) V.Ships (n.d.) URL http://www.cruiseindustrynews.com/cruise-news/756-92607managing-the-crew-crisis-takes-resources-and-commitment.html (assessed 9.5.2011) Unicom (n.d.) URL http://www.unicom-cy.com/article.php?id=17 (assessed 9.5.2011) Crew Unlimited (n.d.) URL: http://www.crewunlimited.com/pdf/CrewUnlimited RetentionReport.pdf (assessed 9.5.2011) Globe Master Management Philippines (n.d.) URL http://www.gmaster.com/upload/ GLOBE%20MASTER%20MANAGEMENT%20PHILIPPINES%20INC%20V2%20.pdf (assessed 9.5.2011)

13.0 The Maritime Labour Convention 2006: An instrument to improve social responsibility in the cruise industry Petra C. Milde Institute of Maritime Tourism Bremerhaven University of Applied Sciences Bremerhaven, Germany

Abstract This paper discusses whether the Maritime Labour Convention (MLC) adopted by the International Labour Organization (ILO) in 2006 is an effective instrument to improve social responsibility in the cruise industry. The content of the MLC is not at all new for the shipping and cruise corporations, but the mechanism of filling regulatory gaps in the past is a significant innovation. It enables a procedural fairness within a process of enforcing well-known regulations, which can lead to a socially more responsible performance in the cruise sector. Compared to the situation nowadays, seafarers will be better off. This implies that cruise corporations find solutions to deal with the MLC-induced additional labour cost that do not negatively affect the work-load or wages of the seafarers. The MLC consolidates existing maritime regulations and translates them into (partially) binding law. Complying with the law is non-voluntary and cannot be understood as (voluntary) socially responsible behaviour. As MLC will become a norm, i.e. a law, its compliance excludes the option of ‘social responsibility’. Only if we assume a social ‘learning curve’ determined by a collective capability to transform norms into intrinsic social values will the compliance with MLC’s regulations lead to more social responsibility in the future. Keywords: Cruise workers rights, corporate social responsibility (CSR), Maritime Labour Convention (MLC), International Labour Organization (ILO) and the International Maritime Organization (IMO).

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_13, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

12.1 Introduction This paper deals with an analysis of the ILO-initiated effort to improve the working and living conditions of cruise ship employees. It discusses whether the Maritime Labour Convention (MLC) of 2006 can ensure “socially more responsible” behaviour of ship owners as announced by the International Labour Organisation (ILO 2006a). So far, the International Maritime Organization (IMO) has initiated three major Conventions dealing with safety and environment standards: SOLAS (Safety at Sea), STCW (Training, Certification and Watchkeeping) and MARPOL (Prevention of Pollution). The MLC complements those three pillars as it consolidates all - more or less ineffective - previous maritime labour Conventions and specifies the basic labour rights of currently estimated 1.2 million seafarers worldwide. The MLC is the consolidation of 38 maritime Conventions and 30 Recommendations. On February 23, 2006, it was signed by 300 delegates from eighty-eight maritime Member States. It had taken five years of rather difficult negotiations before ship owners, seafarers’ trade unions and governments agreed on the MLC without a dissentient vote. The MLC will come into force 12 months after its ratification by at least 30 member States with a total share in the world’s gross tonnage of ships of 33%. The major goal of merchant ship owners and governments who initiated the MLC was to force cost-saving competitors permitting poor labour conditions to improve the seafarers’ lives on board. In the course of negotiations the participants of the Conference decided that the term “ship” also refers to cruise ships. In addition, “seafarers” were defined as all persons employed on board cruise ships: able-bodied seamen engineers, as well as waitresses, musicians or administrator. Therefore, if not otherwise specified in this text, the terms “seafarers” and “ship employees” et al. apply to cruise ship employees as well; the term “shipping sector” includes the cruise sector. The MLC underlines that basic labour standards taken for granted in the developed world are seldom elements in labour contracts in the shipping industry. Therefore in the beginning, the article briefly looks at the issue of international labour standards and explains the background of the MLC. It is followed by a summary of the content of the MLC indicating that the labour regulations are not new, but were already subject of previous ILO Conventions. However, the enforcement mechanism of the MLC is certainly novel. Its effectiveness in terms of fairness and improved social responsibility is subsequently examined. Subsequently, the possible effects of applying MLC-Regulations on labour cost and the possible responses by cruise corporations are briefly examined. Finally, the question as to whether the MLC can be a promising answer to a lacking labour-related social responsibility in the cruise industry is discussed in the last section of the article.

13.1 Background of the MLC Since globalization is shaping global trade and investment, labour migrants all over the world are competing with one another in the global labour market. As a result of the flag-ofconvenience (FOC) system, labour is globalized to such an extent that it is now common practice that multi-national ship crews, “crews of convenience” (Alderton and Winchester 2002, 35), are hired. The more they come from low-wage labour-supplying countries the lower the labour cost for ship owners and operators (ILO 2009b). For many governments in 208

the developing and less developed world the export of labour has become a significant source of income (Milde 2009). It is the central task of the ILO to protect workers’ rights by means of setting labour standards negotiated with member states, employers’ representatives and workers’ unions. These standards serve as a frame of reference for judging how employers apply labour rights. If competition in the international labour market were unregulated, low wages, absence of social protection and the denial of basic workers’ rights would be a basis for gaining competitive advantages vis-à-vis countries and corporations (Cohen 2006). To prevent ‘free riders’, labour standards must be international, i.e. they must be valid for all states. They are universal, but not uniform. For example, Indonesia cannot set the same minimum wage level as France does, but Indonesia can have a minimum wage policy subject to national law (Sengenberger 2006). A concern of developing countries is that a global minimum wage would cause domestic inequity when their workers earned more than locally employed workers (DeSombre 2006). In fact, the Constitution of the ILO supports the principle of wage non-uniformity allowing modifications of labour standards due to different degrees of economic development of the States (ILO 2009c, Art. 19,3). This explains why wage levels are not a subject of the MLC. It simply states in the non-mandatory Guideline B2.2.3 that Member States should “establish procedures for determining minimum wages”. Such procedures would be the collective bargaining negotiations between the International Transport Workers’ Federation (ITF) and the ship owners. Most ship owners would prefer the ILO as body setting a minimum wage for seafarers instead of negotiating with a comparatively strong organisation such as the ITF. As the ITF represents the interest of seafarers on ships as well as land-based workers, the ITF can pressure ship owners using boycotts not only by seafarers but also by port workers. Port unions are tied together by the ITF’s inspector network which enhances the global bargaining power of ITF (Lillie 2006). It would appear that the strong bargaining position of the ITF is one reason for the results of the MLC negotiations. There have already been more than sixty maritime conventions specifying labour rights of seafarers. However, most of them needed updating or became irrelevant or had been replaced by conventions signed by the International Maritime Organization (Ibid., 204). But first and foremost, the implementation of the conventions, i.e. the ratification of the conventions by the governments, had been subject to the goodwill of the ILO-member States (Maupain 2009, 840). The MLC, though, provides a mechanism by which member States directly enforce labour standards on each other’s ships through Port State Control (Lillie 2008, 193). The innovative feature of the MLC is that ships of non-ratifying Flag states will be subject of full inspection in foreign ports, while ships covered by the prescribed MLCcertification will be inspected only every 2nd or 3rd year. If serious deficiencies are detected, Port State Control may detain a ship. The principle of “no more favourable treatment”, also found in the key IMO Conventions, is hereby established.

13.2 Content of the Maritime Labour Convention In the cruise sector maritime labour standards used to protect only those seafarers working in ship operations, the able seamen, ship engineers, etc. The MLC, however, classifies all personnel on board cruise ships as ‘seafarers’. These include those persons with jobs not 209

traditionally understood to be seafaring work: hotel and catering staff, hairdressers, artists, photographers, etc., no matter who their employer is. A second new definition refers to the ‘ship owners’. Structural changes and increased complexity in the shipping industry helped develop a highly organized global network linking ship owners, ship managers, crew managers and labour supplying agencies. The new definition of ship owners ensures that a single responsible employer can be identified even in the case of subcontracting of responsibilities (Bollé 2006, 40). The MLC consists of five Titles, which again consist of Regulations, Standards and Guidelines. The broadly worded Regulations explain in clear “plain language” basic seafarers’ rights and the fundamental obligations to be fulfilled by the member states. The Regulations are followed by mandatory ‘Standards’ and non-mandatory ‘Guidelines’. Standards prescribe how the ratifying country will have to incorporate the Regulation into its national law. If the national law already provides equivalent or superior protection of seafarers, it does not have to be changed. The non-mandatory Guidelines provide guidance in implementing the regulation (Lillie 2008, 204). Flag States that have ratified the MLC, have to issue jointly with ship owners a so-called Maritime Labour Certificate verifying that the ship has been inspected properly. This Certificate with an attached Declaration of Labour Maritime Compliance (DLMC) explaining how the MLC is applied on board has to be ready on board all vessels operating commercially and voyaging in international seas with 500 GT and over. If ships cannot produce such a DLMC they will be subject to full inspection in foreign ports. Port State Control may inspect every single regulation and may in case of serious deficiencies detain the ship (Bollé 2006, p. 141). The roles and responsibilities of Port States and Flag states will be explained more in detail in section 3 below. Table 13.a provides an overview of the regulations, purposes and the jurisdiction over the subject. It also shows which requirements have to be certified by Flag states and which will be inspected by Port State Control. Regulation

Purpose

Title 1: Minimum requirements for seafarers to work on a ship 1.1 Minimum age Protection of young seafarers 1.2 Medical certificate Medical Fitness and ability to perform duties 1.3 Training and Sufficient qualification of seafarers qualifications 1.4 Recruitment and Seafarers have access to an efficient placement free of charge recruitment and placement system Title 2: Conditions of employment 2.1 Seafarers’ To ensure that seafarers have a fair employment employment agreement agreements 2.2 Wages Seafarers are paid regularly and in full according to the employment agreement 210

Port State Inspection

Flag State Certification

9 9

9 9

9

9

9

9

9

9

9

9 Payment Only

2.3 Hours of work and hours of rest 2.4 Entitlement to leave 2.5 Repatriation 2.6 Seafarer compensation for the ship’s loss or foundering 2.7 Manning levels

Seafarers have regulated hours of work and rest Seafarers have adequate leave Seafarers are able to return home Seafarers are compensated when ship is lost Safe, sufficient and secure operations through sufficient personnel Promotion of career and skill development

9

9

9 9

9

9

2.8 Career and skill development and opportunities for seafarers’ employment Title 3: Accommodation, recreational facilities, food and catering 3.1 Accommodation and Seafarers have decent accommodation 9 9 recreational facilities and recreation facilities on board 3.2 Food and catering Provision of good food and drinking 9 9 water Title 4: Health protection, medical care, welfare and social security protection 4.1 Medical care on board Protection of health of seafarers, access 9 9 ship and ashore to adequate medical care 4.2 Ship owners’ liability Health insurance for seafarers 9 4.3 Health and safety Safe work environment promoting 9 9 occupational safety and health 4.4 Protection and Seafarers have access to shore-based accident prevention facilities and services to secure health and well-being 4.5 Social security Seafarers have access to social 9 securities Title 5: Compliance and enforcement 5.1 Flag State Each Flag State implements its Copy of Convention, responsibilities responsibilities Maritime Labour Certificate and DMLC on board for inspection To ensure fair on-board complaint 9 9 procedures 5.2 Port State International cooperation in inspection Inspection shall be limited responsibilities and enforcement on foreign ships to the verification of the Maritime Labour Certificate and DMLC 5.3 Labour-supplying Members implement responsibilities responsibilities for recruitment and placement and social protection of seafarers

Table 13a: Overview of MLC-Regulations The above regulations of the MLC were already subject of the previous Conventions. Now it introduces a new enforcement mechanism that will ensure that the seafarers’ living and working conditions meet the ILO-requirements of “decent work (…) in condition of freedom, equity, security and human dignity” (ILO 1999, 4). The effectiveness of this mechanism will 211

be topic of the subsequent section 3. The Regulations which have a noteworthy impact on cruise ship management will be analysed in section 4.

13.3 Enforceability of the Maritime Labour Convention The following section will deliberate over the question if and to what extent the MLC can be enforced effectively. Flag States that have ratified the MLC will certify MLC compliance of the ships flying their flags. Ship owners apply the MLC Regulations, and finally, Port State Control takes over the task of inspection. The ITF should also be mentioned here, as union inspectors are allowed to inspect ships as well. The role of labour-supplying States will not be examined, since they are less directly involved in the enforcement of the MLC (Lillie 2008, 201). 13.3.1 Ratification by member states The first step towards effective enforcement is the ratification of the MLC by member States. Only when the Regulations are incorporated into the national law of at least 30 member States which represent 33% of the world’s gross shipping tonnage, does the MLC come into force. According to Knapp and Franses (2009), it takes 3.1 years on average before a Convention in the area of safety management, for example, is ratified. The effect of legislation is supposed to have the least effect when it comes to labour-related Conventions. It took 6 years for the ILO-Convention 147 (Minimum Rest Hours) to come into force. At the time of writing, only five countries have ratified the MLC: the Bahamas, Liberia, Marshall Islands, Norway and Panama. These five member States already represent 43% of the world’s shipping tonnage so that one criterion, the representation of 33 %, is fulfilled. The second criterion for the MLC to come into force, that 30 member States sign the ratification agreement, is not yet fulfilled. With regard to the cruise sector, 59 per cent of the cruise ships were sailing in 2008 under the five flags mentioned above. The moment the EU-States ratify the MLC, 75 % of all cruise ships have to apply MLC labour standards (figures derived from Ward’s 2008 edition). On January 14, 2009, the European Parliament called on the 27 EU-members to ratify the Convention without delay (European Parliament 2009). A number of these countries are major flag States. As EU-ports play an important role, other countries will have to ratify the MLC as well. It is therefore most likely that the MLC becomes a binding norm in the cruise sector. How many ILO Member States, in fact, will ratify the MLC in the near future is debatable. Since the mid-1980s, the number of ILO-initiated ratifications has clearly declined (Gravel 2008, p. 86). Even when a vast majority of Member States have unanimously voted for a convention, its ratification has been extremely slow or has even failed (Ibid.). The “Seafarers’ Hours and the Manning of Ships Convention” of 1996, for example, has been ratified by 21, mainly European, countries. The “Social Security (Seafarers) Convention” of 1987 by three countries: Hungary, Philippines and Spain. According to Maupain (2009) and Gravel (2008) the overloading of governments with legislative activities has caused a ‘standards’ fatigue’. Another reason for slow or no ratification lies in the political power play of the countries. In countries like the Philippines, unions and NGOs have called on the Philippine government to ratify the MLC (Isac 2009). Here it is the ship owners who, having strong ties to the government, are opposing the ratification of the MLC. 212

According to Mansell (2009), a measure of the social responsibility of a flag state is the extent to which it has ratified maritime labour Conventions. Looking at the ratification of the ILO 147, the ‘Merchant Shipping (Minimum Standards) Convention’, data show that National as well as International flag States do have a high ratification rate compared to pseudonational flags which show more or less no commitment to the basic labour rights of seafarers. Cruise ships fly under national and international flags only. The ratification of MLC by these States is very probable. If a cruise ship did fly under flag of a pseudo-national State, it could theoretically encounter daily inspections when shipping from one tourist destination to another. 13.3.2 Certification by flag states Once the MLC has been set into force by ratification, flag States are expected to certify that the ships in their register comply with the MLC (ILO 2009d). This is documented with the DMCL, the Declaration of Labour Maritime Compliance (DLMC), already mentioned in chapter 2. For that purpose flag States have to maintain an inspection apparatus to ensure compliance and they can apply legal sanctions on ship owners if they do not comply. Ship owners select flag States depending on the weakness or strength of enforcement of standards. When it comes to safety issues it is in the interest of the ship owners that International flag States make a bigger effort to ensure a high standard, but when it comes to labour standards they have so far been more neglectful (Knapp and Franses 2009). As MLC requires the Port State Control to inspect the validity of DLMC’s once within 5 years, flag States should be encouraged to be accurate. It is noteworthy to mention that flag States are also authorized to withdraw certificates when they believe there is “evidence that the ship concerned does not comply with the requirements of this Convention and any required corrective action has not been taken” (MLC, Part A, Standard A5.1.3). Effective certification requires that flag States provide the necessary maritime infrastructure and legal capacity to achieve this (Mansell 2009). According to the International Commission on Shipping in 2001, a significant number of flag states have been incapable of providing such an infrastructure. Also the IMO in charge of overseeing the role of flag States was accused of ineffective performance (Ibid., p. 4). And yet, certificates such as the DLMC issued by flag States must be accepted as prima facie evidence of compliance with requirements of maritime Conventions. When the MLC comes into force, ILO-Member States will enforce labour standards directly on each other’s ships through Port State Control. Through this mechanism an element of (flag) state sovereignty is shifted to the port State. This could encourage ship owners, and thereby flag States, to properly certify the application of labour standards (Lillie 2009). Altogether, the primary pressure on flag States to ratify will come neither from the ILO nor the governments but from the flagging preferences of ship owners (Ibid.). 13.3.3 Inspection by port states Port States have the task of inspecting ships visiting their ports. Labour standards were the initial foundation for the conception of the Port State Control-system. Already the ILO Convention 147 of 1976 allowed the inspection of compliance to labour standards. However Port State Control had little power to enforce improvements. Even though it did send 213

reports on deficiencies to flag states as well as to the ILO, penalties or even detention hardly occurred in the past (DeSombre 2006). Where ships carry the Certificate and the DMLC, they are more or less exempted from inspection of labour standard compliance - unless complaints are made by seafarers and the port State inspectors have “clear grounds” for suspecting non-compliance. The better the flag State inspections, the less scrutiny by Port State Control can be expected (Lillie 2008). If no complaints are made, certificates are prima facie evidence of compliance for a period for 5 years (ILO 2009e). Ships that are not certified by the flag State can expect spot inspections any time and can - in case of “serious deficiencies” - be detained until improvements are made. Amongst Port State Control officials it gets round quickly that careless flag States are not doing their jobs properly. Their registered ships are more likely to be inspected by Port State Control. It is noteworthy that not only are certain flags singled out for inspection but also certain types of ships. Cruise ships fall into that category together with oil tankers or gas carriers (DeSombre 2006). Inspecting the hardware of a ship, such as machinery or other technical devices to ensure environmental or safety standards, requires very different skills than inspecting managerial activities such as pay roll documents, working time documents, or on-board complaint procedures. Port State Control officials will require intensive training to check labour violations - especially when it comes to cruise ships with very large numbers of employees. In addition, Bloor (2003) points to the limited capacities of Port States to carry out thorough inspections. As Port State Control for labour standards is very time-consuming and very labour intensive, an effective Port State Control will only be guaranteed when governments are willing to finance additional manpower and the training of their inspectors in labour rights issues. Altogether, the primary pressure on flag States to ratify, though, does not come from the ILO or the governments but from the flagging preferences of ship owners (Lillie 2008). 13.3.4 Evaluation of the enforcement procedure The anticipation of ILO that the MLC will come into force on the day of the 60-months anniversary of the MLC in August 2011 is justified (ILO 2007a). How many member States actually will have ratified the MLC by then is unknown. With regard to cruise shipping it is very likely that the flag States responsible for 75% of the cruise ships will have ratified the MLC. To prevent time-consuming inspections by Port State Control it would be in the interest of ship owners to be properly certified by flag States. The DMLC serves as a valuable document of prima facie evidence of compliance with MLC and affords freedom from being “bothered” by Port State Control for up to 5 years. Port States play a new role vis-à-vis flag States as they can control flag States’ certifications through spot-inspections once during the 5-year term of validity of the DMLC. How effective the process of certification and inspection will be depends very much on the interest of ship owners to be properly certified and on the financial capacity of port States to provide sufficient and well-trained Port State inspectors. When the MLC was presented to the public after its successful adoption, speeches of ILO officials and press releases praised the new “bill of rights” as being a model for “fair globalization” and an instrument to ensure “a more socially responsible shipping industry” 214

(e.g. ILO 2006a; ILO 2009; ILO 2009a). ‘Fairness’ relates to the ‘rules of the game’ in the maritime sector, which are supposed to lead to ‘fair competition’ in the shipping industry. In this process, the task of performing in a “more socially responsible” manner is delegated to ship owners who have to observe minimum labour standards. As stated in the Preamble of the ILO Constitution, the ILO aims at avoiding “the failure of any nation to adopt humane conditions of labour” as it would be “(...) an obstacle in the way of other nations which desire to improve the conditions in their own countries” (ILO 1919, emphasis added) With regard to the MLC this implies that only through global collective selfbinding commitment can all ship owners implement labour standards that guarantee better working conditions for seafarers. The term “procedural fairness” (Loriaux 2008) relates to the new rules of the game in the shipping industry designed by the ILO. Firstly, it means in the context of the MLC ‘equality’ following the IMO principle of “no more favourable treatment”: it defines the equal treatment of all seafarers and all ship owners. Secondly, fairness is also understood as “competitive fairness”, i.e. ‘equity’ or ‘fair play’ amongst ship owners: it defines the same rules applied by the ship owners operating ships that are covered by the MLC-certification. Those who do not play fair are excluded. DeSombre (2006) compares this kind of cooperative agreement with the creation of a ‘club’. ‘Club goods’ are characterized by nonrivalry (here: equal access to the market) and excludability (Ibid.,57). The ‘ship owners’ club’ uses the enforcement mechanism of the MLC, the threat to detain ships, as an instrument to exclude those who do not comply with the rules. Ship owners can only benefit from the MLC if all of the club members participate in applying MLC-standards. In the case of actors who do not uphold the agreement, they are excluded from the club. The benefits from not belonging to the club are supposed to be lessened by the cost of a ship’s detention in the port. And vice versa: the costs of applying MLC-labour standards are supposed to be compensated by the benefit of a fair price competition. Under the assumption of an effective Port State Control, this innovative concept of a ‘ship owners’ club’ with its implicit enforcement mechanism is very promising. Although the cruise industry is not dealing with the problem of sub-standard ships, cruise ship owners automatically became ‘club members’. 13.3.5 Implications for the cruise sector An effective collective agreement guaranteeing the enforcement of the labour standards would help to solve the prisoners’ dilemma situation each individual cruise corporation has to deal with when contemplating the improvement of labour standards on board cruise ships. A comprehensive application of the MLC regulation will cause additional cost which a corporation is only willing to bear when its competitors act in just the same way. Resulting price adjustments would then affect all competitors alike. However, with no knowledge as to whether the competitors comply to the same extent with the MLC-Regulations, the prisoners’ dilemma situation will remain and each profit-driven corporation will try to find ways to evade compliance as much as possible.

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Box 13a lists a selection of the MLC-Regulations which will have a noteworthy impact on cruise ship management (see ILO 2005; ILO 2006). Only the mandatory Standards were selected, not the Guidelines, as these are non-mandatory. All of the “Minimum requirements for seafarers...” listed under Title 1 (minimum age, medical certificate, training and qualification, recruitment and placement) requires that a complete set of records of all persons onboard must be accessible for inspections. It contains data as to where, when and how the seafarers were recruited, what training they received, plus the medical certificates, etc. Such a record keeping incurs additional labour cost. The “Recruitment and Placement”- Regulation (1.4) requires that recruitment and placement services are free of charge. Seafarers have to pay the fees for medical certificates, national seafarers’ books and passport; however, visa costs have to be borne by ship owners. Furthermore, ship owners are obliged to establish proof that privately operating recruitment agencies supplying seafarers are certified or licensed with a standardized system. If crew managers make mistakes, ship owners have to bear the consequences. Possibly, quality audits on recruitment agents in labour-supplying countries could prevent mistakes. The “Wages”- Regulation (2.2) requires that wages are paid monthly and that ship management provides a system for enabling the personnel to transmit their earnings to their families for a reasonable fee. The “Hours of Work and Hours of Rest”- Regulation (2.3) limits hours of work to 14 hours in any 24-hour period and 72 hours in any seven-day period. The minimum hours of rest may not be less than 10 hours in a 24-hour period and not less than 77 hours in any sevenday period. Hours of rest must be divided into no more than two periods, one of which shall be at least six hours in length, and the interval between rest periods shall not exceed 14 hours. A hundred per cent application of this regulation would require ship management to employ more hotel-and catering staff which would cause significant higher labour cost. The “Accommodation, Recreational Facilities, Food and Catering”- Regulation (3.1) has an impact on the design of cruise ships to be constructed after the MLC comes into force. All seafarers not performing the duties of ships’ officers must have cabins with an area of not less than 7.5 square meters (2 persons), 11.5 square meters (3 persons), and 14.5 square meters (4 persons). The regulation consists of a comprehensive list of technical provisions exhaustively defining heating, noise and vibration prevention, lighting, sanitary facilities, cabin layout and furniture. This implies that cruise operators of newly built ships will have to calculate with higher fixed labour cost. The “Ship Owners Liabilities”- Regulation (4.2) requires the ship owner to be liable for the economic consequences of sickness or injuries. The ship owner has to pay for the cost of medical treatment as well for the possible loss of earnings of the employee until recovery (limited to 16 weeks). This Regulation intends to address shorter term social security protection coverage. It is closely linked with the “Social Security”-Regulation (4.5) which requires access to social security protection for all cruise-ship employees in the long term. 216

In the long term it is required that all labour-supplying member states shall provide social security. However, as currently a large number of nationals do not have access of social security in their home countries, it is the ship owner who is liable for short term protection. Again, an increase in labour cost is inevitable. Box 13a: Selected MLC-Regulations affecting labour cost The above listed Regulations point out that a comprehensive and proper application of the MLC will incur significant costs for the cruise sector. Assuming a prisoners’ dilemma situation, there are at least five ways to deal with additional labour cost: (1) (2) (3) (4) (5)

to lower the wage-level by recruiting as much as possible in lowest-wage countries, to develop even “cheaper” labour markets such as in Cambodia or Laos, to increase the workload and intensify the standardization of tasks and processes, to evade the regulations as much as possible, and/or to include the labour cost in the price which will threaten competitiveness if done alone.

The options 1 and 2 are already part of the recruitment strategies of cruise corporations with or without the MLC. However, more effort will be put into their realisation in order to cope with new cost pressures. Also option 3 is part of the prevailing continuous streamlining of service processes, but could be intensified – where possible with the imposition of even stricter ‘production’ benchmarks (Weaver 2005). Option 4 is, of course, also conceivable. However, it bears the risk of being caught flat-footed. The Guidelines for Port State Control officers leave the doors open for interpretation of what “serious deficiencies” in complying with labour standards actually have to look like to justify the detention of a ship. (ILO 2009d, chapter 5). To attempt this option could cause drastic financial consequences. Option 5 is a valid option as long as the price increase is moderate, the demand is fairly price inelastic and competitive pressure low to moderate. Depending on competitiveness and on the policies of corporate governance, cruise corporations will make different decisions on which options to choose. The actual cost and benefit of MLC-induced social responsibility cannot yet be estimated. The Cruise Lines International Association (CLIA) as well as Lloyd’s Register announced in 2007 that they made use of Article VII of the MLC stating the right to negotiate “the derogation, exemption or other flexible application of the Convention” (Cruise Industry News Quarterly 2007/08). According to the CLIA the definition of ‘seafarers’ will place a burden of record keeping on the ship owner (Ibid., 20). As the amendment procedure is lengthy no results of the negotiations have yet been published. 13.3.6 The Maritime Labour Convention: An instrument to improve social responsibility in the cruise industry According to the ILO Director-General Somavia, the MLC aims at pursuing a “fair globalization by making rules of the game fair for everybody”. Thus, he considers it an instrument to ensure “a more socially responsible shipping industry” (ILO 2009, 2009a). The following sections discuss what exactly will become “socially more responsible” after the MLC comes into force.

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13.3.7 The necessity for introducing social responsibility on the international level Generally, there are three ways to implement more social responsibility in an industry. Firstly, it can be done on a national level, requiring individual governments to enforce and control mandatory labour standards; however, enforcement would be limited by state sovereignty and hindered by interstate competition (Lillie 2008). Governments may prescribe labour standards to protect the seafarers by applying sophisticated investigation and punishment procedures, but they cannot guarantee compliance with objectionable laws (Zack 2008). This is even more the case in the cruise industry where neither the “production of services” takes place within national borders nor do the “citizens” belong to the same nationality. Secondly, social responsibility could be enforced on the private business level. In this case, the private business develops its own labour standards in accordance with social responsibility frameworks, such as ‘United Nations Global Compact’, the ‘ILO Declaration of Decent Work’, or others. According to Duplessis (2008), “companies pick and choose international standards to match their own private interests and those of their staff” (33). On the industry level, CLIA has produced a ‘Shipboard Workplace Code of Conduct’ (CLIA 2009), while on the individual level corporations have formulated firm-specific codes of conducts such as e.g. the Costa Crociere’s ‘Code of Business Conduct and Ethics’. Even when this has happened out of a sense of morality, if competition is pressuring and it shows that labour standards might reduce profitability, then voluntary labour standards certainly are endangered. Thirdly, socially responsible labour standards can be enforced on the international level. ILO’s concept of ‘global tripartism’ that brings together state actors as well as non-state actors representing opposing national and functional interests is a mixture of the above described two options. Even though the question from where such an international ‘legal system’ will draw its binding, legitimizing power if it is no longer conceptualized within the terms of nation-state sovereignty remains unanswered, the concept of MLC seems to be a promising way to integrate public and private regulatory tools (Lillie 2008; Beck 2007). This will be discussed in the following section. 13.3.8 International law and corporate social responsibility Experiences in the past with the enforcement of ILO-law show that previous attempts to persuade ship owners to comply with non-binding international labour law were not very fertile. On the one hand, the absence of a binding force of ILO-law has caused legitimate scepticism of whether maritime Conventions will be effective: as long as Conventions were not equipped with sanctions, they were disregarded. On the other hand, ‘real law’ - or ‘hard law’ - that may apply sanctions when obligations are breached cannot function in an international community: neither is there a hierarchical command system, nor is the principle of the sovereign equality of states given (Duplessis 2008). There exists no “single authority laying down, interpreting and safeguarding the application of legislation by physical force if necessary” (Ibid., 9). This explains why the ILO, over the past thirty years, had been increasingly using a ‘soft law’-approach, i.e. the application of law without any legal constraint. “Soft law formulates imperfect legal obligations, since perfection is measured in legal theory by the existence of an enforceable sanction in the event of 218

infringement” (Ibid., 11). It considers the diversity and changing nature of states and societies, thereby reflecting social facts and the needs of international actors (Ibid., 13). In fact, the ILO Constitution encourages them to “(…) have due regard to those countries in which climatic conditions, the imperfect development of industrial organization, or other special circumstances make the industrial conditions substantially different and shall suggest the modifications, if any, which it considers may be required to meet the case of such countries” (ILO 2001, emphasis added). The soft law-approach makes it possible to include non-state actors such as business corporations and non-governmental organizations (NGOs) in the negotiation and adoption process. States are just one factor alongside transnational non-state actors. In the case of the MLC not only representatives of states, but also ship owners, industry bodies, trade unions and other NGOs participated in the development of the MLC. Such a participatory approach is especially advantageous in cases where states have to come to terms on issues that cross the boundaries of national law; non-state actors do not think so much in territorial terms as in functional terms (Duplessis 2008). These terms were precisely the creation of a “socially more responsible” shipping industry that is closely linked with solving the problem of sub-standard ships causing unfair competition in the shipping industry. The MLC is a combination of hard and soft law. It consists of hard law as its provisions are partially binding and allow sanctions if not complied with. However some of its Regulations are accompanied by ‘soft’ conditions such as “if necessary/appropriate”, or “if the states consider it reasonable”, allowing a state flexibility in the incorporation of the MLC into national law. Furthermore, the MLC consists of non-mandatory ‘Guidelines’. These ‘exit routes’ combined with no legal responsibility allow experimenting without the threat of being sanctioned (Ibid., 23). The ‘Standards’ however are norms to be fulfilled. From a linguistic perspective, a ‘norm’ should not be linked with a ‘voluntary’ activity, i.e. responsibility. Linnik and Thorsen (2008) call it an oxymoron as it “is not the social responsibility of a corporation to comply with the law.” (107). According to ILO’s definition, Corporate Social Responsibility (CSR) is a “business-driven voluntary initiative and refers to activities that are considered to exceed compliance with the law” (ILO 2007b, 6, emphasis added). It is a self-imposed regulatory instrument and therefore cannot comply with any law. Therefore, complying with the mandatory MLC-Standards is not yet CSR. ILO’s definition assumes that corporations fully comply with law, i.e. with the Standards. Only the voluntary application of MLC’s non-mandatory Guidelines is – following ILO’s definition of CSR - a step towards corporate social responsibility in the shipping and cruise sector. In other words, MLC does have the potential to inculcate in the cruise industry a socially more responsible way of thinking. Labour law itself is not a spell that simply leads to a socially more responsible working environment, but legal practices may slowly change the minds of those in charge. According to Bourdieu (1987), dominant law has the power to create a universality of the law’s effect. Law can either use the power of punishment or the power of persuasion. In the latter case, law moves from the status of orthodoxy to the status of doxa: “Indeed, doxa is a normalcy in which realization of the norm is so complete that the norm itself, as coercion, simply ceases to exist as such (Ibid., 848). Then CSR can become an attitude or a ‘collective disposition’, i.e. a part of the social and corporate culture. Obviously it needs a favourable political and economic environment which determines the speed and 219

scope of change on the social ‘learning curve’. And certainly it first of all needs a regulatory framework, such as the MLC, that is capable of effectively and persistently introducing legal changes. The interesting and complex issue is that on the one hand the MLC can create CSR in the cruise industry; on the other hand CSR itself can appropriate norms (Javillier 2008, 61). Linnik and Thorsen (2008) found out that when corporations recognise norms that “show signs of judicial control” they integrate these norms as part of their CSR (ibid., 65). This can be confirmed also for cruise corporations. Shortly after the MLC was signed in February 2006 a sizeable article in the Cruise Industry News Quarterly (Winter 2006/2007) presented newly certified CSR-policies of cruise corporations that also included labour-related guidelines. The “triple bottom line” philosophy on CSR known as the three P’s: “planet, people, profit” (Elkington 1998) was selected as the cruise industry’s CSR-principle which - besides environment and profitability - also includes people’s, i.e. labour, issues. A variety of certifications such as the ISO 9001, ISO 14001, OHSAS 18001, SA 8000 and GL’s Maritime Social Responsibility-Certificate were mentioned. Even quality audits on recruitment agencies, as required by the MLC, were brought up. It may be concluded that an enforcement of social responsibility is more likely to be effective on the international level, as the deficiencies created when applied directly by private business or by national governments can be avoided. On the other hand, however, the universal, but non-uniform, nature of international labour standards allows only the setting of minimum labour standards with low-income countries as benchmarks (see chapter 2). In addition, a successful ratification of the MLC signals at the same time the legitimacy of a “disembedded transnational space” (Lillie 2008, 197), the FOC-system, which again provides the root of all evil: the lacking social responsibility in the shipping and cruise industry.

13.4 Conclusion The MLC is a promising instrument to improve working and living conditions on board cruise ships. It is an innovative answer to a lacking social responsibility in the shipping and cruise industry. It is also an answer of a so far “tooth-less” ILO whose previous attempts to persuade ship owners to comply with maritime labour conventions were not very fruitful. In order for the MLC to come into force, the political will of the Member States to ratify is required. This is most probable as the European Union has openly declared the will to ratify by the end of 2011 at the latest. In order to be effective, Flag States will need appropriate infrastructure for a proper certification of the ships. Here, the ILO as well as the IMO, will have to provide financial support. Also Port State Control will need an adequate number of well-trained personnel for the inspections of the ships. Finally, it depends on the willingness of the ship owners to accept the MLC. To apply or not to apply the Regulations is a question of social responsibility as well as profitability. The application of MLC Standards itself is not yet equivalent to practising social responsibility, as the Standards are legal norms. Only the application of the non-mandatory MLC Guidelines could be considered as a first step towards socially responsible performance. One can hope that the practice of MLC norms may change the minds of those in charge and become intrinsic part of the corporate culture of cruise corporations. 220

Referring to ILO’s definition of CSR, i.e. “activities that are considered to exceed the compliance with law” leaves the question open: ‘what follows after compliance?’. This must be answered on a corporate ethics level. Are cruise ship owners, against the setting of tight competition, willing to gradually apply the MLC-Standards as well as the non-mandatory MLC-Guidelines? What defines the ethical-normative dimension of cruise corporations’ decisions to do so? The decision-making of cruise corporations is geared to the interests of its most powerful stakeholders. These stakeholders are not, as in some prominent cases, the responsible or even rebellious consumers opposing multi-national practices, but powerful shareholders who want to see short-term returns on their investment. The question of whether this is legitimate or ‘fair’ is difficult to answer. Making profit is a legitimate claim, but it cannot be the only measure for social responsibility as often cited; how to make profit is a question of corporate ethics and requires an answer from the cruise industry.

13.5 References x x x

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Alderton, T. and Winchester, N. (2002), Globalisation and de-regulation in the maritime industry. In Marine Policy 26 (2002), pp.35-43 Beck, Ulrich (2007), Power in the Global Age. A New Global Political Economy. Polity Press, Cambridge, UK Bloor, M. (2003), Problems of Global Governance: Port State Control and ILO Conventions. In Proceedings of SRIC’s Third Symposium, Cardiff University, September 23, 2003, pp. 9-23 Bollé, P. (2006), The ILO’s new Convention on maritime labour: An innovative instrument. In International Labour Review, Vol. 145, No.1-2, pp. 135-142 CLIA (2009), http://www2.cruising.org/industry/conduct.cfm, as of January 1, 2009 Cohen, D. (2006), Globalization and employment, in: Auer, P, Besse, G. and Meda, D (eds.), Offshoring and Internationalization of Employment, International Institute for Labour Studies (ILO), pp. 17-36 Cruise Industry News Quarterly (2006/2007), Profitability, Environment, and Social Equity. Winter 2006/2007, p.16-23. Cruise Industry News Quarterly (2007/2008), A Better Life at Sea. Winter 2007/2008, p.18-20. De Sombre, E.R. (2006), Flagging Standards. Globalization and Environmental, Safety, and Labor Regulations at Sea, MIT Press, Cambridge, Mass. Duplessis, I. (2008), Soft international labour law: The preferred method of regulation in a decentralized society. In ILO International Institute for Labour Studies, Governance, International Law and Corporate Social Responsibility, Research Series 116, pp. 7-36 Elkington, J. (1998), The triple bottom line for-twentieth–century-business. In Mitchell, J. (ed), Companies in a World Conflict, The Royal Institute of International Affairs, Chatham House, Earthscan Publications Ltd, London, pp. 32-69 European Parliament (2009), European Parliament resolution of 14 January 2009 on the proposal for a Council directive implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers' Federation (ETF) on the Maritime Labour Convention, 2006 and amending Directive 1999/63/EC: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+ P6-TA-2009- 0020+0+DOC+XML+V0//EN, as of Nov. 11, 2009 221

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Gravel, E. (2008), Is the appropriation of international Labour standards by new actors replacing or complementing the ILO’s traditional standards-related work? In ILO International Institute for Labour Studies, Governance, International Law and Corporate Social Responsibility, Research Series 116, pp. 79-103 ILO (1919), Constitution of the International Labour Organization: Preamble. Full text to be found in: http://www.ilo.org/ilolex/english/constq.htm ILO (1999), Decent work. Report of the Director-General, International Labour Conference, 87th Geneva, p. 4 ILO (2000), ILO Mandate. www.ilo.org/public/english/about/mandate/htm, as of Nov.27, 2009 ILO (2004), The Global Seafarer. Living and working conditions in a globalized industry, International Labour Office Geneva ILO (2005), Proposed consolidated maritime labour Convention, International Labour Conference, 9th (Maritime) session, 1996, Report I (1B), Geneva ILO (2006), Maritime Labour Convention 2006, see http://www.ilo.org/public/english/ standards/norm/download/mlc2006.pdf, as of January, 1, 2010 ILO (2006a), A new “bill of rights” for the maritime sector: A model for fair globalization. http://www.ilo.org/public/english/bureau/dgo/speeches/somavia/2006/maritime.pdf, as of January, 1, 2010 ILO (2007), The promotion of sustainable enterprises, Report VI, International Labour Conference, 96th Session, Geneva ILO (2007a), Maritime Labour Convention 2006. Action Plan 2006-2011, International Labour Office Geneva ILO (2007b), Conclusion concerning the promotion of sustainable enterprises. ILO Labour Conference June 2007, International Labour Office Geneva ILO (2009), Norway ratifies ILO Maritime Labour Convention. ILO Press Release February 10, 2009. http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press releases/lang--en/WCMS_101671/index.htm, as of January, 2010 ILO (2009a), Advantages of the Maritime Labour Convention, 2006. http://www.ilo.org/global/What_we_do/InternationalLabourStandards/MaritimeLabour Convention/Advantages/lang--en/index.html, as of Nov. 27, 2009 ILO (2009b), The International Labour Organization and the quest for social justice, 19192009, International Labour Office Geneva ILO (2009c), Constitution of the International Labour Organization and selected texts, International Labour Office Geneva, http://www.ilo.org/public/english/bureau/leg/ amend/constitution.pdf as of January 9, 2010 ILO (2009d), Guidelines for flag State inspections under the maritime Labour Convention, 2006, International Labour Office, Geneva ILO (2009e), Guidelines for port State control officers carrying out inspections under the maritime Labour Convention, 2006, International Labour Office, Geneva Isac (2009), International Seafarer’s Action Center Philippines, http://isac.org. ph/index.php?option=com_content&view=frontpage&Itemid=5, as of January 8, 2010 Javillier, J.-C. (2008), Corporate social responsibility and law: Synergies are needed for sustainable development. In ILO International Institute for Labour Studies, Governance, International Law and Corporate Social Responsibility, Research Series 116, pp. 37 – 62 Knapp, S and Franses, Ph. H. (2009): Does ratification matter and do major conventions

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improve safety and decrease pollution on shipping. In Marine Policy 33, pp. 826-846 Lillie, N. (2006), A global union for global workers: Collective bargaining and regulatory politics in maritime shipping, New York, Routledge Lillie, N. (2008), The ILO Maritime Labour Convention, 2006: A new paradigm for global labour rights implementation. In Papadakis, K. (ed.), Cross-border social dialogue and agreements: An emerging global industrial relations framework?, pp. 191- 217, International Institute for Labour Studies, Geneva Linnik, M. and Thorsen, S.S. (2008), ILO and CSR – minimum human rights standards for corporations. In ILO International Institute for Labour Studies, Governance, International Law and Corporate Social Responsibility, Research Series 116, pp. 105-127 Loriaux, S. (2008), Global equality of opportunity: a proposal. In Journal of International Relations and Development, Vol. 11, No. 1, pp. 1-28 Mansell, J. (2009), Flag State Responsibility. Historical Development and Contemporary Issues, Springer edition. Maupain, F. (2009), New Foundation or New Façade? The ILO and the 2008 Declaration on Social Justice for a Fair Globalization. In The European Journal of International Law, Vol. 20, No. 3, pp. 823-852 Milde, P. (2009), The Future of Filipino Workforce in the Cruise Sector. In Papathanassis, A. (Ed.), Cruise Sector Growth. Managing Emerging Markets, Human Resources, Processes and Systems, Wiesbaden, Gabler Sengenberger, W. (2006), The Role of International Labour Standards for Governing the Internationalization of Employment. In Auer, P, Besse, G. and Meda, D (eds.), Offshoring and Internationalization of Employment, International Institute for Labour Studies (ILO), pp. 163-177 Ward, D. (2008), Complete Guide to Cruise & Cruise Ships 2008, Princeton,, N.J.: Berlitz Publishing Company Inc. Weaver , A. (2005), The McDonaldization Thesis and Cruise Tourism. In Annals of Tourism Research, Vol. 32, No. 2, pp. 346-366 Zack, A.M. (2008), In ILO International Institute for Labour Studies, Governance, International Law and Corporate Social Responsibility, Research Series 116, pp. 155- 177

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PART E: Cruise Education & Research

14.0 Critical cruise research in the age of performativity Michael P. Vogel Institute for Maritime Tourism Bremerhaven University of Applied Sciences Bremerhaven, Germany

Abstract This paper discusses the purpose and legitimation of academic cruise research and the Cruise Research Society. Legitimation requires meeting the societal demand for performativity. Incentives embedded in the relationships between academic cruise researchers and the cruise industry ensure that cruise research is indeed largely performative. However, due to these incentives, academic cruise research also tends to limit itself to uncritical approaches. This is confirmed by an analysis of the abstracts accepted for the 2nd International Cruise Conference. A lack of critical cruise research is problematic. But in the age of performativity, also traditional critical theory has become difficult to legitimate. Therefore, the paper attempts to reconcile the critical paradigm with performance orientation. It proposes three kinds of performativity-compatible critical research. Reflexive critical cruise research subjects cruise research to critical scrutiny in order to expose the influence of the performativity imperative and to foster self-awareness. Performative critical cruise research applies critical theory methods to aspects of the cruise industry with the double aim of emancipation and performance enhancement. Critical cruise systems thinking, finally, critiques narrowly defined cruisesystemic boundaries and tries to push them out to widen the scope of what counts as performative cruise research.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_14, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

14.1 Introduction A few months ago, the Cruise Research Society was founded by academics from Australia, Britain, Croatia and Germany, reflecting the shared personal and professional interests and ambitions of an emerging community of scholars. The Society has chosen as its purpose to promote ‘research in the field of maritime tourism and cruise management’ (CRS, 2009, §2). The Society’s articles, however, say nothing about the purpose of the purpose, i.e. about why cruise research should be conducted. For cruise lines, the answer to this question would be obvious and motivated by what most would consider legitimate self-interest: cruise research should be conducted to help them meet their customers’ needs and expectations better, and to enhance the efficiency and profitability of their business. But the Cruise Research Society is no cruise line, no association of cruise lines, and also no organisation of cruise industry professionals. It is a voluntary association of academics. So is the pursuit of the academics’ self-interest a legitimate purpose of academic cruise research? Or does legitimacy require a search for truth? A search for human progress? A search for understanding and meaning? A search for solutions to problems? For John Tribe (2008), there is ‘a strong case for the business of tourism to embrace a more critical agenda’, but he finds ‘that critical tourism is still marginal in terms of the whole effort of tourism research’ (253). Should the Cruise Research Society perhaps adopt a critical research agenda? In that case, on what grounds could critical cruise research be legitimated? As a founding member of the Cruise Research Society, I see the need for a programmatic discussion to help us clarify these questions, to develop a clear profile for the Society, and to position it in the wider arena of leisure, tourism and hospitality research. With my paper I wish to make a first contribution to this programmatic discussion. It is a reflective piece on cruise research, which draws on epistemology, postmodernist thought, critical theory and the sociology of knowledge production. The remainder of the paper is organised as follows. Section 2 outlines how the legitimation of knowledge and research has changed in Western societies over the past centuries, and introduces performativity as the currently dominant legitimating criterion. Section 3 looks at the consequences of performativity for the relationship between academic cruise researchers and the cruise industry. It argues that, as a result of the incentives embedded in these relationships, performative and uncritical cruise research is given priority over other research. Section 4 introduces Habermas’s theory of knowledge-constitutive interests to show how cruise industry interests condition this research bias. Section 5 illustrates the extent to which current cruise research is performative and uncritical by analysing all abstracts accepted for the ICC2. Section 6 argues that even in an age of performativity, where traditional critical theory has become difficult to legitimate, critical research remains important. It attempts to reconcile the critical paradigm with performance orientation and 228

proposes three kinds of performativity-compatible critical research. Section 7 concludes the paper with a number of recommendations for the Cruise Research Society.

14.2 Performativity and the legitimation of cruise research For more than three centuries, researchers at Western universities benefitted from the freedom to pursue their personal interests in the search for truth, ‘unpolluted’ by stakeholder interests or the expectation of the usefulness of their research outcomes. In the age of Enlightenment, scientifically generated knowledge gradually replaced religious knowledge, changing the way the world was seen and understood. Scientific knowledge was legitimate because it was taken to be true. The universities held a monopoly on the production of such legitimate knowledge, on defining sound scientific practice, on determining what should count as significant scientific problems, and on selecting those who should be allowed to practice science. The traditional paradigm of knowledge production through scientific discovery has been referred to as Mode 1. It is ‘characterized by the hegemony of theoretical or, at any rate, experimental science; by an internally-driven taxonomy of disciplines; and by the autonomy of scientists and their host institutions, the universities’ (Nowotny et al., 2003, 179). However, the ivory tower did not survive the 20th century. The concept of truth was increasingly seen as idealistic, ontologically problematic or even as irrelevant. In the Western capitalist societies, people started losing their faith in the so-called metanarratives, such as the knowability of everything by science, the possibility of absolute freedom and the progress of history. In his seminal essay, The Postmodern Condition: A Report on Knowledge, Lyotard (1984) poses an important question: ‘To the obsolescence of the metanarrative apparatus of legitimation corresponds, most notably, the crisis of metaphysical philosophy and of the university institution which in the past relied on it. The narrative function is losing its functors, its great hero, its great dangers, its great voyages, its great goal. It is being dispersed in clouds of narrative language elements – narrative, but also denotative, prescriptive, descrip-tive, and so on [...] Where, after the metanarratives, can legitimacy reside?’ (xxiv) The question of legitimacy concerns the legitimation of the criteria for sorting valuable statements from others. Lyotard identifies three possibly legitimating criteria within science, which Brügger (2001) summarises as follows: ‘performativity, which governs de facto (the technical criteria, from which every-thing is administered in input/output matrices in which the elements in a process are claimed to be commensurable and in which the aim is to increase efficiency); consensus, which is achieved by open discussion, a criterion for which Habermas is made the spokesperson; and paralogy 229

(disagreement, incommensurableness, innovativeness), which Lyotard himself wishes to promote.’ (79) So Lyotard suggests that truth has been substituted by performativity as dominant criterion of legitimation. ‘With performativity, the role of knowledge becomes that of contributing to the best efficiency and effectiveness of a system, whatever the nature of that system may be, and the worthwhileness or value of the knowledge is evaluated on that basis. Performativity is a critical feature of incredulity where the questions asked of knowledge become not just – is it true? – or does it contribute to human progress? – but what use is it? – and how will it enhance the performance of people and organisations?’ (Usher, 2006, 281) If performativity is the dominant legitimating criterion, then the legitimacy of research must be a function of the performativity of the knowledge it produces. This has led to a shift in the kinds and conditions of research undertaken: ‘When […] research is framed by the demands of performativity, the emphasis switches from enquiry to application, from ideas to outcomes, foregrounding relevance, policy pay-offs and immediate instrumental contributions to systemic efficiency, rather than the traditional academic virtues of “truth” and the disinterested pursuit of knowledge.’ (Usher and Solomon, 1998) Performativity is an expression of economic priorities. Its legitimating power emanates from the recognition of scientific knowledge and research as a major contributor to productivity, competitiveness, economic development and growth. Therefore, performativity has also been defined as ‘the capacity to deliver outputs at the lowest cost, [which] replaces truth as the yardstick of knowledge’ (Crook et al., 1992, 31). As a result of businesses and governments taking greater interest in the knowledge produced by universities, academics have increasingly been encouraged to concentrate on economically valuable knowledge domains, and to engage in collaborative research with external stakeholders. Today, ‘less and less is it [research] curiosity driven and funded out of general budgets […]; more and more it is in the form of specific programs funded by external agencies for defined purposes. […] The emphasis has moved away from free enquiry to problem-solving.’ (Gibbons et al., 1994, 78) This development has given rise to a new paradigm of knowledge production called Mode 2, which has established itself alongside Mode 1. In Mode 2, knowledge is generated in a context of application, not of theory or experiment; it is transdisciplinary and not derived 230

from pre-existing disciplines; it does not only take place at traditional knowledge organisations such as universities, but at a diversity of sites; it is not an ‘objective’ or reductionist investigation, but a reflexive, dialogic process between research actors and research subjects; and its quality control is largely based on social relevance and utility, and less on discipline-internal ‘scientific’ criteria (Gibbons et al., 1994). Cruise research clearly falls into the Mode 2 category. We cruise researchers are not in search of some universal truth, but we tend to work on solutions to specific problems. Cruises are an ‘indiscipline’ (see Tribe, 1997) as there is no academic discipline called ‘cruisology’. Rather, cruises are a research field for different disciplines, each with its own perspectives and methodologies. Research into cruises is conducted by a variety of agents, including market research organisations, consulting firms, industry associations, cruise lines, destination management companies, port administrations, and also by us academics. The quality of cruise research is judged not only by academic peers, but by a much wider range of stakeholders, and their quality criteria are directly related to the usefulness of research outcomes, i.e. to their performativity. To conclude, the legitimation of academic research is now tied to a large extent to prospective demonstrable benefits to society, which precludes the possibility that the Cruise Research Society could be legitimated solely on the basis of the satisfaction of its members’ shared academic interest. Pure academic interest is no longer a legitimate motive for research; in fact, being only of academic interest has become synonymous with insignificant. The Cruise Research Society will therefore need to seek its legitimation outside. Given its focus on a field of practice and application, its research and knowledge production are expected to meet the societal demand for performativity.

14.3 Power relations in cruise research The performativity of academic cruise research may not be formally required from us by our universities, or explicitly requested by external stakeholders, in particular the cruise industry. Instead, the message is conveyed in more subtle but equally compelling ways by exploiting our professional and personal motivations. What motivations do we academics have when we engage in cruise research? Why do intellectually curious people, who are free to do research on practically anything they wish, find the study of this tiny, highly commercialised niche within the leisure industry worth their attention, effort, knowledge, brain power and time? For some of us, including myself, cruise research is a natural appendix of our teaching. There are now various higher education programmes available which involve courses in cruise management. As their teaching staff, demonstrating expertise by means of conference papers and publications is part of our professionalism. But this is only part of the story. The 231

decision to engage in cruise research surely also has a strategic dimension aimed at supporting our career development. After all, it is easier to stand out as one of a few experts within a small niche than it is as an expert in a highly competitive mainstream research area. For many of us, cruises are an attractive field for research because it is fairly new and not yet over-researched; it is transdisciplinary, and new knowledge tends to be produced at the edges of established disciplines rather than at their cores; it is small enough to serve as a basis for personal academic differentiation strategies; cruises receive much media and public attention, from which also we as researchers gladly take our fair share; and last but not least, cruise research may take us on a cruise every now and then, or to a cruise destination, which is a nice extra. These motivations give rise to two issues. The first issue I will only mention briefly. One might say that cruise research, ‘Conscious of its youthfulness and thus its potential lack of intellectual credibility, [...] has sought to define itself in ways which would give it academic weight’ (Tribe, 1997, 638). Hungry for recognition by peers, we have started an academic conference series, created an academic association, and consider launching an academic journal. With the best intentions to reverse the fragmentation of cruise-related research across many different conferences and publications by concentrating it in our own conferences and publications, we actually contribute to the further fragmentation of research and knowledge by adding even more specialised media. The second issue is probably more serious. Our motivations make us academic cruise researchers quite receptive to offers of co-operation on the cruise industry’s part. Only cruise lines and their associations can give us access to the data, insider information, passengers, crew, backstage areas etc., which we need for a lot of interesting research. If our work is likely to benefit a cruise line, the cruise line’s management is more likely to grant us the desired access. Similarly, as academics with a track record of performative cruise research, it is much easier for us to obtain research or consulting contracts from cruise industry actors, to be invited to cruise conventions as speakers or panellists, or to be accepted as guest authors by trade magazines. As academics with a reputation of conducting ‘relevant’ and ‘useful’ cruise research, we are in a better position to help our graduates find attractive jobs; to support our students in getting practical work placements or thesis projects with cruise lines; and to recruit cruise managers as visiting lecturers or guest speakers for our universities. Embedded in the relationships between academic cruise researchers and the cruise industry are thus various incentives to give priority to performative research, serving the needs and interests of a few large corporate players. What is more, whilst we academic cruise researchers depend on the cruise lines’ goodwill and willingness to co-operate with us, the opposite does not apply. Our dependence is unilateral. The absence of a vice versa puts us academics at the weaker end of rather asymmetric power relations. This situation is exacerbated by the strictly commercial nature of cruising and oligopolistic market structures. 232

I do not believe that academic cruise researchers are coerced by the cruise industry to pursue certain lines of inquiry and to avoid others. Coercion would require intentional acts on the part of the cruise industry, and a feeling of coercion on our side. Neither seems to be the case. What I do suggest, however, is that in an attempt to earn cruise industry recognition and not to spoil our business contacts on which we may depend, we academic cruise researchers have a tendency to limit ourselves to research that is uncritical. Uncritical cruise research takes the ends of cruise lines as given and makes no attempt to question or challenge them. It also does not scrutinise business practices with respect to unintended consequences external to the cruise industry. These omissions may but need not indicate that we cruise researchers have been turning a blind eye to potentially problematic aspects of cruising. The theoretical perspectives we adopt condition what our research can find and where it is blind. In other words, the interests we pursue in research limit the knowledge we can produce. The next section emphasises this point by introducing a theory which relates different cognitive interests to the types of knowledge to which they give rise.

14.4 Knowledge-constitutive interests and cruise research According to the sociologist and philosopher Habermas, prominent representative of the Frankfurt School of critical social research, all knowledge, including research-based knowledge, is produced in pursuit of certain cognitive human interests. There is no disinterested knowledge. In Knowledge and Human Interests, Habermas (1971) distinguishes three fundamental types of cognitive interest, each giving rise via a specific category of inquiry to a particular type of knowledge. The first type of cognitive interest is aimed at predicting and controlling the human environment. It has led to the emergence of the natural sciences and several other sciences which were inspired by the reductionist approach of the natural sciences, including engineering, computing, accounting, as well as large parts of economics and management. Habermas summarises them as the empirical-analytical sciences. Their theories ‘disclose reality subject to the constitutive interest in the possible securing and expansion, through information, of feedback-monitored action. This is the cognitive interest in technical control over objectified processes’ (Habermas, 1971, 309), which is referred to as technical interest. Technical interest gives rise to instrumental knowledge, i.e. knowledge of cause-effect or means-ends relations. Cruise research guided by technical interest clearly dominates the cruise research literature. Examples include Petricks’s empirical studies on the economics of loyal passengers (2004a), on first timers’ and repeaters’ perceived value of cruises (2004b), on cruise passenger segmentation (2005), and on drivers of passengers’ value perception (Petrick and Xiang, 2006). Non-empirical cruise research may also be motivated by technical interests, e.g. Wie’s 233

(2005) game-theoretic model of cruise capacity investment or my own formal analysis of cruise line brand strategies (Vogel, 2009). The second type of cognitive interest Habermas identifies is based on the human need to understand other people and act in the context of social traditions. The intersubjective understanding of meaning is the concern of the social sciences or historical-hermeneutic sciences, as Habermas calls them. Hermeneutic or interpretive inquiry ‘discloses reality subject to a constitutive interest in the preservation and expansion of the intersubjectivity of possible action-orienting mutual understanding. The understanding of meaning is directed […] toward the attainment of possible consensus among actors in the framework of a self-understanding derived from tradition. This we shall call practical cognitive interest, in contrast to the technical.’ (Habermas, 1971, 310) Mutual understanding is of practical interest because interpretive ways of knowing are the precondition for the coordination of everyday and social human activities and give meaning to these activities. Research in pursuit of a practical interest may be performative, namely if the practical knowledge gained through such research is not an end in itself but a means for improving performance. Interpretive cruise research, such as Huang and Hsu’s (2009) study on the interaction among cruise passengers, Yarnal’s (2004) work on passengers’ participation in mass cruise tourism and Weaver’s (2005) paper on interactive service work and performative metaphors, exemplifies how practical interest gives rise to practical knowledge, i.e. knowledge about how to understand others and their ways of constructing meaning. The third type of cognitive interest, according to Habermas, is the emancipation from ‘ideologically frozen relations of dependence that can in principle be transformed’ (Habermas, 1971, 310; my emphasis). Ideology in this sense refers to ‘the broadly accepted set of values, beliefs, myths, explanations, and justifications that appears self-evidently true, empirically accurate, personally relevant, and morally desirable to a majority of the populace. [...] Ideologies are hard to detect since they are embedded in language, social habits, and cultural forms that combine to shape the way we think about the world. They appear as common sense, as givens, rather than as beliefs that are deliberately skewed to support the interests of a powerful minority.’ (Brookfield, 2005, 41) Emancipatory interest is expressed by people’s desire for self-knowledge through selfreflection, for personal growth and development, for autonomy and freedom from selfimposed constraints, reified social forces and institutions (Roderick, 1986, 56). From Habermas’s perspective, any knowledge inhibiting a person's achievement of freedom and autonomy is ideological and must be subjected to ideology critique in order to expose the 234

(possibly historical) forms of domination, repression, and ideological constraints on thought and action. In his 1937 landmark essay, Traditional and Critical Theory, Horkheimer (1982) contrasted traditional theory that merely reflects the status quo with critical theory which seeks to change the status quo. The term critical theory has since then been used to refer to the critical social research paradigm rather than to a particular theory. ‘Whereas empirical and interpretive social sciences describe the world as it is, critical theory tries to understand why the social world is the way it is and, through that process of critique, strives to know how it should be’ (Ewert, 1991, 356). Kincheloe and McLaren (1994, 139-140) suggest that researchers and theorists who use their work as a form of social or cultural criticism accept the following basic assumptions: all thought is fundamentally mediated by power relations that are social in nature and historically constituted; facts can never be isolated from values or removed from ideological inscription; language is central to the formation of subjectivity; certain groups in any society are privileged over others, constituting an oppression that is most forceful when subordinates accept their social status as natural, necessary or inevitable; and mainstream (= uncritical) research practices generally tend to favour the reproduction of the system of class, race and gender oppression. Critical research is as little disinterested and neutral as any other research, but it makes its partisan ambitions explicit. ‘Research in the critical tradition takes the form of self-conscious criticism – self-conscious in the sense that researchers try to become aware of the ideological imperatives and epistemological presuppositions that inform their research as well as their own subjective, intersubjective and normative reference claims. Thus, critical researchers enter into an investigation with their assumptions on the table, so no one is confused about the epistemological and political baggage they bring with them to the research site.’ (ibid., 305306) Cruise research with an emancipatory interest addresses practices of cruise lines or social and environmental impacts of cruising, which adversely affect people’s lives, but also ideologies surrounding and supporting the cruise industry itself, such as materialism and consumerism. Examples include Chin’s (2008b) work on labour flexibilisation at sea and her critical book (2008a) on the production and consumption of cruises; Wood’s (2000) article on the globalising cruise industry; as well as Ross Klein’s (2002, 2006a, 2006b, 2007, 2008) entire work on the ways in which cruise lines generate profits. The aim of critical cruise research may be to raise (self-) awareness, to launch public debates, to mobilise stakeholders, to trigger political processes leading to government intervention, but it can never be ‘purely academic’. 235

Roderick (1986) summarises Habermas's theory of knowledge-constitutive interests: ‘The human species has three cognitive interests: the technical, the practical and the emancipatory. These develop in three social media: labour, interaction and power (relations of domination and constraint). They are the conditions for the possibility of three sciences: the empirical-analytic, the hermeneutic and the critical. The role of these three sciences is to systematise and formalise the procedures required for basic human activities (controlling external conditions, communicating and reflecting) necessary for the functioning of the human species [...] a trichotomous division between the natural sciences, the cultural sciences and critical science.’ (53)

14.5 The nature of the cruise research presented at the ICC2 In section 14.2 I suggested that academic cruise research is strongly biased towards performativity and against the critical paradigm. The emphasis of performative research on optimising means-ends relations blinds it for the value of the ends and for unintended external consequences of its means. To illustrate this point and to show the extent to which we seem to have internalised the imperative of performativity, this section analyses the 34 abstracts accepted for the 2nd International Cruise Conference (ICC2) with regard to the performativity of the research described and the knowledge-constitutive interests expressed by them. Table 1 on the next page depicts the results. Horizontally, Table 14a categorises the abstracts by type of authorship and by research approach taken. With a share of 88%, the vast majority of abstracts come from academics. 59% of all abstracts are empirical, 21% are theoretical, and the remaining abstracts do not reveal sufficient information about the research approach adopted. Vertically, Table 14a is divided into two large central columns, separating abstracts which reflect an overriding concern for efficiency or effectiveness from those which do not. 88% of all abstracts fall into the first category, which confirms the hypothesised cruise research bias towards performativity.

236

Performative Authors

Approach Theoretical Empirical Academics Not clear Empirical Acad.+Prac. Theoretical Practitioners Empirical Not clear

Techn. 4 11 3 1

Total Share

22 65%

Non-performative

Pract. 1 5 1

Emanc.

7 21%

1 3%

Techn.

1

Pract.

Emanc. 2

Total 7 19 4 1 0 1 2

2 6%

34 100%

2

1 2 0 0%

2 6%

Share 21% 56% 12% 3% 0% 3% 6% 100%

Table 14a: Categories of accepted ICC2 abstracts Each of the two large central columns in Table 14a is comprised of three smaller columns, which divide the abstracts further into groups sharing the same knowledge-constitutive technical, practical and emancipatory interests. 65% of the abstracts form the first group. Not surprisingly, the abstracts of this technical-interest group all promise performative knowledge. Their respective disciplinary orientations are given in Table 14b. Cognitive interest

Marketing

Technical Practical Emancipatory Total Share

8 1 1 10 33%

HR & Strategy education & policy

Economics Other & statistics technical

4 4

4 2

4

2

8 27%

6 20%

4 13%

2 7%

Total

Share

22 7 1 30 100%

73% 23% 3% 100%

Table 14b: Disciplinary orientations of ICC2 abstracts promising performative knowledge Among the ICC2 abstracts with a technical interest, eight have adopted a marketing orientation. Human resources and education, strategy and policy, and economics and statistics are represented by four abstracts each. Nine ICC2 abstracts or 26% have been written in pursuit of a practical interest, i.e. in search of meaning or understanding. In seven of them, meaning and understanding are treated as a means of achieving performative ends, such as improving customer loyalty. Performativity in these abstracts is often only revealed by a single sentence, e.g. in an abstract on experiential learning: ‘The implications of these reflections will be useful for both educators and the cruise industry’; or in an abstract on passengers’ safety perceptions: ‘Our findings suggest that the philosophy and scope of cruise operators’ conventional security policies and practices require reconsideration’. Table 14b shows that four of the seven abstracts with 237

performative ambitions and a practical interest are located within a disciplinary context of HR and education, where issues of human understanding are particularly important. Only two abstracts express practical interest free from performativity. Dierckx and Van Broeck’s abstract outlines the exploration of activities of cruise line employees in Cozumel, Mexico, without making any reference whatsoever to performance enhancement. Papathanassis and Beckmann’s abstract challenges the validity of the ‘theoretical poverty of tourism research’ hypothesis with respect to cruise tourism by identifying and interpreting relevant patterns in the cruise research literature. Nothing in this abstract suggests that the proposed research has any other purpose than to gain a better understanding of the current status of published cruise research. Last but not least, three abstracts or 9% can be said to express an emancipatory interest. None of them has been authored by a practitioner. There is Miriam Schmenner’s abstract on customer deception in the cruise industry; Petra Milde’s abstract on the ILO-Maritime Labour Convention 2006; and my own abstract on knowledge production and knowledgeconstitutive interest of cruise research. According to Miriam Schmenner’s abstract, her work draws attention to the congestion of mass cruise destinations by passengers and in particular to the problematic practice of cruise operators not to inform their customers about crowded attractions and places beforehand. Cruise customers depend on information provided to them by cruise operators, and any dependence implies power. Cruise operators concealing decision-relevant information from their customers abuse their power. People who defend such corporate behaviour by pointing out its normality in all industries and countries actually only confirm the pervasiveness of an ideology which renders the misinformation of customers for profit acceptable, even commonsensical. Miriam Schmenner’s work is an attempt to emancipate cruise customers from ‘ideologically frozen relations of dependence that can in principle be transformed’ (Habermas, 1971, 310; see section 14.4). In fact, she even aims to transform those relations experimentally by testing ways of how cruise operators might inform their customers more accurately without scaring them off. Thus, despite its emancipatory interest, ultimately her work is concerned with cruise line performance. The emancipatory interest reflected by Petra Milde’s abstract about the fairness and social responsibility of the rules specified by and achievable through the 2006 ILO Maritime Labour Convention is of a different kind. For lack of alternatives, many seafarers from poor countries agree to work under questionable conditions dictated to them by crewing agencies or shipping companies. Their economic vulnerability makes them dependent on this kind of employment, and the ideology of the market justifies or ‘freezes’ those relations of dependence. By problematising the term ‘social responsibility’ as used in the Maritime Labour Convention, Petra Milde challenges the Convention itself. She argues that the Convention may achieve little for the seafaring personnel, whilst legitimising the status quo 238

by labelling it as more socially responsible. In contrast to Miriam Schmenner’s abstract, performativity plays no role in Petra Milde’s discussion of the ILO Maritime Labour Convention.

14.6 Critical cruise research in the age of performativity? In this section I finally come to the emancipatory interest of my own paper, which is to challenge the imperative of performativity in cruise research; to critically discuss our ‘ideologically frozen relations of dependence’ with the cruise industry, ‘which can in principle be transformed” (Habermas, 1971, 310; see section 14.4); and to propose ways in which cruise research may become more critical without losing its legitimacy. There seems to be little disagreement with Lyotard’s (1984) view that performativity has become the dominant legitimation criterion for knowledge and therefore also for the production of knowledge through research. Knowledge that helps lowering input/output ratios in a world of scarce resources is legitimated on the basis of its contribution to economic performance and well-being. We cruise researchers seem to take this rationale to be self-evident, and the incentive structures embedded in our relationships with the cruise industry (see section 3) make sure that our research is strongly biased towards the enhancement of its performance, as my analysis of the ICC2 abstracts has illustrated. But self-evidence can be deceiving. There is an aspect that is easily overlooked when the focus is so much on means-ends relations and performance: legitimation on the basis of performativity is ideological. Performativity is only one of many alternative legitimation criteria, such as God’s will, a ruler’s will, the party’s will, the people’s will, a divine order, a natural order, truth, freedom, equality or solidarity. Critical theory holds that ideologies have the function to support the interests of a powerful minority, swaying people into accepting as normal and justifiable a permanent state of inequity. In the context of academic cruise research, for example, performativity operates in favour of the most powerful cruise companies. They determine what knowledge counts as performative – namely knowledge that suits their purposes – and hence what research is legitimate. We cruise researchers have largely internalised this logic and learnt to regard it as common sense. What does critical theory tell us to do in this situation? To understand and expose the workings of ideology in order to free people from their ‘false beliefs’, critical theory suggests subjecting ideology to critique. ‘Critical theory singles out for criticism and critique knowledge [...] that presents itself as certain, final, and beyond human interests or motivations. Critical theory sees its own central purpose as the destabilization of such knowledge’ (Friesen, 2008). Hence I propose that the Cruise Research Society should actively encourage reflexive critical cruise research, i.e. research which subjects our own cruise research to critical scrutiny in 239

order to reveal and make us aware of the effects of the performativity imperative, to which we will otherwise remain blind. Parts of the present paper can serve as an example of this kind of critical cruise research. The detection of asymmetric power relations between academic cruise researchers and the cruise industry or of our self-limitation to uncritical research requires critical self-reflection. Only our own emancipatory interest can produce such (self-)critical knowledge. The growing incredulity of the metanarratives (see section 2), however, has put ideology critique in crisis. Simons and Billig (1994) note that ‘In its origins, ideology critique claimed to reveal a hidden truth about the nature of ideas’ (2), but today, the growing lack of faith in the human capacity to find truth ‘seems to undermine the possibility of confident criticism. Every claim to truth is immediately placed under suspicion’ (1). Moreover, critique itself is being criticised: ‘We now stand with a mammoth arsenal of critical weaponry at our disposal. [...] There is virtually no hypothesis, body of evidence, ideological stance, literary canon, value commitment or logical edifice that cannot be dismantled, demolished or derided with the implements at hand’ (Gergen, 1994, 59). Without a higher legitimacy or a superior epistemological status, critical cruise research should accept the performance orientation of the cruise industry and seek the dialogue with it, rather than confrontation. Dialogue and the search for agreement can avoid ‘those omnipresent tendencies in contemporary criticism (including ideology critique) which conceive issues and alternatives in binary terms. Binarism narrows the range of relevant discussants and discussables, and treats assertion and critique as verbal warfare. The result [...] is alienation, rivalry, and hostility, especially in academic debate’ (Simons and Billig, 1994, 7). From critical dialogue, I see two further kinds of critical cruise research emerge. Firstly, as the example of Miriam Schmenner’s abstract shows, the critical research paradigm is not per se incompatible with performativity. The emancipation of its customers, employees and other stakeholders may actually be in a cruise line’s own best interest, but due to management’s short-term thinking, professional blinkers or for ideological reasons, this connection might not have been seen before. Thus, I propose that the Cruise Research Society should promote performative critical cruise research with the double aim of emancipation and performance enhancement Secondly, whether research is considered performative may depend on the definition of the system whose performance is to be enhanced. Performance enhancement can be a particularly contestable claim when used to justify interventions in a social system. Not only may enhancements for some be adverse for others within the social system. The real problem arises from the choice of systemic boundaries which discriminate between insiders and outsiders. While insiders’ interests are taken into account when the ‘enhancement’ 240

claim of an intervention is evaluated, outsiders are excluded as legitimate stakeholders. Surfacing the selectivity of systemic ‘enhancements’ through the critique of the underlying boundary judgements is thus a core principle of critical systems thinking (Ulrich, 2003, Midgley, 2000). In the case of cruises, critical research could start from a critique of the narrow systemic boundaries implicit in cruise lines’ and the cruise industry’s self-concepts. If these boundaries, understood as ‘constructs that define the limits of the knowledge that is to be taken as pertinent in an analysis’ (Midgley et al., 1998, 468), can be pushed out in dialogue with the cruise industry (though not necessarily with its consent), new knowledge, new stakeholders and possibly new decision makers will become part of the system. Cruise research aimed at enhancing the performance of the system within its extended boundaries, which might now include local inhabitants of cruise destinations or the families of crew members, will produce different knowledge than current, more narrowly focused cruise research. With a larger ‘whole relevant system’ (Churchman, 1970, B43), the kinds of knowledge considered performative for that system will change and probably become more varied. Moreover, unintended, previously system-external consequences of cruise industry practices can be brought into the relevant system by pushing out the systemic boundaries and extending the domain of cruise research. So as a means of widening the scope of what counts as performative cruise research, I recommend the Cruise Research Society also to encourage and foster the use of critical cruise systems thinking.

14.7 Conclusion In this paper I have argued that the Cruise Research Society cannot justify its existence solely on the basis of the satisfaction of its members’ shared academic interest. The Society, as well as academic cruise research in general, needs to seek its legitimation outside by meeting the societal demand for performativity. That performative research is indeed given priority over other kinds of research is ensured by various incentives embedded in the relationships between academic cruise researchers and the cruise industry. In fact, due to these incentives, we academic cruise researchers have a tendency not only to favour performative research, but also to limit ourselves to research that is uncritical. The performative and uncritical nature of cruise research was strongly supported by the analysis of ICC2 abstracts. However, even though performativity has replaced truth as the dominant legitimation criterion for knowledge and research, I have suggested that there is still a need and room for critical cruise research. Its role is to make us aware of the causes and consequences of our largely uncritical performative cruise research. In the age of performativity, traditional critical theory may be increasingly difficult to justify, yet in epistemologically more modest forms, the critical paradigm remains intact. 241

There are at least three kinds of critical cruise research which the Cruise Research Society should actively promote to complement its more mainstream technical-performative research. Reflexive critical cruise research is research subjecting cruise research to critical scrutiny in order to reveal influences of the performativity imperative and to raise selfawareness. Performative critical cruise research applies critical theory methods to aspects of the cruise industry with the double aim of emancipation and performance enhancement. And critical cruise systems thinking subjects the narrowly defined systemic boundaries of cruise lines’ and the cruise industry’s self-concepts to boundary critique before trying to push out these boundaries to widen the scope of what may count as performative cruise research. In order to promote the emancipatory interest and the critical perspective in cruise research, the Cruise Research Society should first of all adopt a mission statement which defines the Society’s goals and priorities. This would give the Society a clear profile and position it in the wider arena of leisure, tourism and hospitality research. Then, based on the mission statement, a research programme could be put together, mentioning the development of methods for reflexive critical cruise research, performative critical cruise research and critical cruise systems thinking as an objective for the next few years. The research programme would form the basis of future calls for papers and conference themes. With the programmatic elements proposed in this paper, I believe the Cruise Research Society will be able respond appropriately to the ‘significant research gap [... in tourism] between the lack of critical research and the many significant issues requiring its insights and guidance’ (Tribe, 2008, 253) whilst ensuring the legitimacy of its activities in the age of performativity.

14.8 References x x x x x x x

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15.0 Plotting a course in cruise management education Ate de Groot Stenden University of Applied Science Leeuwarden, Netherlands

Abstract The current study was conducted to investigate the focus, content and educational approach of cruise management courses offered by three universities (of applied science) in Europe. Data was collected and a content analysis performed on the cruise management courses offered by three universities in Europe. Results indicate the courses currently differ very much from each other. Cruise Management programs in higher education do not have a shared image towards the industry. Educational approaches also vary. Since the programs accept a limited number of students cruise education programs offer a unique opportunity to use new educational approaches. In one of the programs PBL/CBL is the main educational method. In future one could also think about the implementation of open courseware and the use of electronic devices such as E readers. Since it has been proved being one of the most effective approaches to higher vocational education, building on a firm link between the profession and education, we recommend using problem-based learning as the most promising approach to cruise management education. Keywords: Cruise Management Education, Course Development, Case Study.

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P. Gibson et al. (Eds.), Cruise Sector Challenges, DOI 10.1007/978-3-8349-6871-5_15, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011

15.1 Introduction The cruise business is a relatively new industry growing with an average rate of 7% each year (CLIA 2009). For such a growing industry you need more and more qualified staff and they should be educated to perform well. To operate a cruise ship you basically need people to sail the ship from A to B and you need staff to manage the hotel operations on the ship. Apart from that a sufficient number of staff is required on shore as well. To provide the industry with qualified staff to run and manage the operations, some universities have started to develop courses in cruise management, either for positions at sea or positions on shore. These courses generally aim at making a contribution to the theory and practice of cruise management. The courses have usually been developed with the help of experts and with the input of the industry. This paper focuses on the education for the non nautical and technical management staff for this industry in Europe. There are a number of programs at different universities who offer programs. In this paper some of these programs will be compared with each other. Furthermore, this paper will address the issue “what would be the ideal program for students who would like to work in this industry”. An ideal program, both with regard to content (what?) and with regard to educational approach (how?). Although a final answer to these questions is probably elusive we hope this paper will contribute to the ongoing discussion between the cruise industry and educators The main objective for the current explorative study was to make a comparative analysis of the focus, content and educational approach of cruise management courses offered by three European universities. 15.1.1 Concepts of education For thousands of years people have been educated and trained to do their jobs. When there was no literacy knowledge and skills were transferred orally. With the introduction of printing techniques education changed drastically and one could read things in a book and was not always depending on a teacher. In the classical educational approach, books play an important role in combination with teachers. In this model the teacher knows the content of the book and presumably a bit more about the specific topic. Today’s education has changed a lot. With new approaches like constructivism the student gets more responsibility for his/ her learning process and the teacher is becoming becomes more a facilitator. With the introduction of the internet one should also start a fundamental discussion about how to educate young people. There is not much necessity to go to a library for information since a lot is available on the internet. In the early days of the internet, universities were reluctant to promote the internet as a source for information, but since the level of the information has been improved this is not such a big issue any more. The other advantage of the internet is the fact that it always has the most up to date information.

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15.2 Cruise management education If we take a look at staff needed to operate a cruise ship it is not very difficult to identify the need for a school for the Nautical and Technical operations. These Maritime institutes are well established institutes and some of them exist more than over a hundred years. They can be found all over the world. In the Netherlands these schools are located in Amsterdam, Vlissingen and Terschelling. The connection between cruise industry and Maritime institutes is strong. Cruise lines, like other shipping companies need qualified staff to sail the ship. The connection between universities and the cruise line industry in relation to the education of hotel staff is not very strong. Most cruise lines try to attract new staff from the shore side hotel industry and then they require a number of years of experience. At this moment, there are only a few universities for non-nautical and non-technical management staff for the cruise industry. If you look at the hotel operations on a cruise ship the staff can be divided into crew and officers. The crew usually receives a short training program shore-side or get their training on board of the cruise-ship. Officers are usually recruited from the shore-side hotel industry. Some universities (of applied science) have started programs focused on management-(shore side) and or officer positions sea side. Usually these programs have been constructed in the educational setting of this university. One could also see if new educational methods would be favourable for cruise education.

15.3 Methodology For this research three cruise programs were selected: x x x

Hochschule Bremerhaven (Bremerhaven, Germany), Plymouth University (Plymouth, UK), Stenden Hogeschool (Leeuwarden, Netherlands).

If one checks the internet for cruise management education programs, they will find there are not that many. Data was collected through a questionnaire and a content analysis was performed. The most important outcomes are presented and finally a conclusion / recommendation has been drawn. The programs in Bremerhaven and Plymouth are multiple year programs. The program in Leeuwarden is a minor, a specialization at a hotel school.

15.4 A comparison of three cruise management programs In appendix 1 the complete list of questions can be found. Next the most important outcomes will be discussed.

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Name of institute

University of Plymouth

Why a cruise program?

After consultation with industry

Bremerhaven University of Applied Sciences University has a maritime tradition / character / focus and tourism is a demanded area of studies in Germany.

Stenden University of Applied Sciences Leeuwarden Growing industry, Cruise ships are floating hotels

The programs are initiated because an opportunity was identified. Programs are derived from existing Tourism/Hotel/ Nautical programs Institute Name of program:

Plymouth BSc(Hons) Cruise management

Major/minor: Degree: Duration of the program:

Major BSc 3 years plus 1 optional work placement

Maximum number of participants Number of applicants

Not stated until next year 60

250

Total number of students Nationalities

230

120

95% UK 5% German& Polish

German (80%), Russian, South African, Greek, Turkish, Polish Male 20% Female 80%

Division of gender

Male 25% Female 75%

Bremerhaven Cruise Industry Management (CIM) / Intl. Major BA CIM: 3 years / ICIM: 4 years 40 per year

Leeuwarden Cruise Management I&II

Minor(s) BA 2 (elective) modules

CMI: 48 CMII:12 CMI: 90 on a yearly basis CMII: 20 on a yearly basis CMI: 90 CMII: 20 60% Dutch 20% German 20% Other non EU Male 40% Female 60%

Plymouth and Bremerhaven offer multiple year programs, Leeuwarden offers minors. Therefore, the acquisition of students differs across the three institutions. Plymouth and Bremerhaven students are selected from mainly secondary schools. The students in Leeuwarden are hotel school students who wish to specialise in Cruise Management. The number of applicants seems to exceed the number of places available. In Bremerhaven there are a lot of applicants for a limited number of places. Based on their student numbers, the programs can be characterised as small (niche) programs. The programs have a big appeal to female students. The biggest source market is usually the national market. Leeuwarden has the most non Dutch students.

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Institute Selection procedure/ assessment

Plymouth Yes

Other promotion apart from website

Some PR, word of mouth, reputation spreads

Bremerhaven Selection on the basis of German university entry level exams Brochures, student presentations at schools

Leeuwarden No

Minor market (internal) focused on Hospitality, tourism, Leisure and Media and entertainment students

As already mentioned, the number of applicants exceeds the number of available places. Cruise Management programs can apply a selection procedure. Plymouth and Bremerhaven do so in order to select the best students. Marketing approaches differ from each other. Institute Starting year program Involvement from industry

Plymouth 2003 Guest lecturers, visit to ships, work placements,

Cooperation with cruise industry

Develop research contracts, cruise conference, work with MNTB to develop industry qualifications. Staff given support to update and learn about context

Bremerhaven 2003 We have a so-called Steering committee

Leeuwarden 2006 Guest lecturers, visits to ships, visit to ship yard, visit to Maritime institute Terschelling HAL school co-ordinator is involved in the program

All the programs are relatively new. All programs have a (strong) connection with the industry. Usually with cruise lines who have a source market in the specific country. Institute Qualification of faculty

Plymouth Industry experienced PhD MSc

Bremerhaven Professors have a PhD and a relevant research record. Lecturers are usually expected to have a PhD. For practitioner lecturers we require at least a masters degree

Leeuwarden MA MSC MBA

Plymouth and Bremerhaven have staff members at PhD level, Leeuwarden does not. Institute Land or sea focused

Plymouth Sea

Bremerhaven Land and Sea

Leeuwarden Sea

Bremerhaven focuses on land and sea (internship) positions. Plymouth and Leeuwarden are mainly focused on sea positions. Probably this is the result of the already existing (other) programs at the Universities. Institute

Plymouth

Bremerhaven

Leeuwarden 249

Educational methods

Lectures 40% Workshops 30% PBL/CBL 10% Excursions/cruise 10% Consultancy 10%

Lectures 60% Workshops 5% PBL/CBL 5% Excursions/cruise 5% Consultancy 25%

Field trips

One day orientation

The ship visit usually involves a guiding through the ships & student conference

Lectures: 10% CMI - 10% CMII Workshops: 10% CMI - 10% CMII PBL/CBL: 50 % CMI - 20% CMII Excursion/cruise: 10% CMI - 40% CMII Consultancy: CMI 10% - 20% CMII CMI: ship & ship yard CMII: One week cruise with HAL & Maritime institute

The main educational method in Leeuwarden is PBL/CBL. Plymouth and Bremerhaven use more traditional educational methods. Leeuwarden organizes a cruise (CMII) with students, in order to get students acquainted with on board live Institute Assessment methods

Plymouth Few exams

Bremerhaven Exams, coursework, essays, projects, presentations, theses

Leeuwarden CMI: weekly tests & grading assignments CMII: grading research

Institute Research program connected to CM program?

Plymouth 20 credit research module and undertake a 40 credit honours project

Bremerhaven No, we do not offer masters or PhD programmes in this area. We do not estimate adequate demand yet.

Leeuwarden No

Universities are not related to research activities within the programs. Institute Internship positions

Plymouth Land based: no Sea based: yes

How many students get a job in the cruise industry

Land based: 0% Sea based: 100% Not in industry: 0%

Bremerhaven Land based: marketing, finance, itinerary planning Sea based: Mainly scouts, and reception Land based: 30 Sea based: 40% Not in industry: 30%

Leeuwarden Land based: no Sea based: Ass. Dining room manager, PPO, HRO, ass. Purser, Land based: 0% Sea based: 50% of CMII Not in industry: 50% of CMII

Plymouth achieves a 100% score for getting students a job on board the cruise ships. In Bremerhaven and Leeuwarden you also see a number of student not getting (or wanting) a job in the Cruise industry 250

15.5 A case-study of developing a cruise management course Looking at the growth of this industry, Stenden University started to develop a minor Cruise Management in 2005 together with a cruise line representative (HAL). We decided the module would be accessible for Hotel-/ Tourism-/ Leisure- and Media & Entertainment students. We used our exiting module format which we used for the hotel modules for the development of a Cruise Minor. A module consists of 10 weeks; 8 educational weeks, one test week and one study/ holiday week. For the module eight themes were developed; Industry, Operations, Hotel related departments, Sales and marketing, Shipbuilding, HR, Concession and the Law at Sea. Apart from that, the student received an assignment for eight weeks to develop their own cruise line. Moreover, guest speakers from the industry were asked to give lecturer and field trips were organised: a ship visit and a visit to The Meyer Werft in Papenburg. The program started in September 2006 and is executed twice a year with an average of 40 students per module. In 2007 we developed a second cruise module. Whereas the focus in the first module was on gaining knowledge about the cruise industry, the focus of the second module is on a cruise with students and research. In September 2008, we started the program with 10 students. The program is executed twice a year. The cruise trip is organized in cooperation with the HAL. Please refer to appendix 2 for the daily program. When reflecting on the experiences from the cruise minors, one major conclusion can be drawn: young people hardly know anything about this industry. This is caused by the fact that this industry is not `within reach`. One can easily visit a tourist company or a hotel, but for a cruise ship there are accessibility obstacles to be considered (thresholds to take.) Lots of students know about the tourism and hotel industry from experiences as a guest or an employee. Students hardly know anything about the cruise industry apart from some that have taken a cruise with parents. Looking at the first group of ten students sailing with us in 2008, two students already decided before the cruise they did not want to work on a cruise ship because of personal reasons. Two students decided, based on the experience of sailing on the ship that they did not want to work on a cruise ship. One student decided not to pursue a position for medical reasons and five students got even more enthusiastic about the idea of working on a cruise ship. They applied for an internship position at HAL and they all got accepted. The next two cruises also produced similar results. In fact, this reflects hidden value of those field trips. It helps students in spite of their preconceptions and expectations) to discover whether this is their “cup of tea” or not. From our evaluations, we may conclude that all the students who participated in these cruise trip thought it was an experience they never would have missed. So even when students are not going to work on a cruise ship it is still good promotion for the industry.

15.6 Conclusion / recommendations This quick scan outlines different approaches to cruise management education. The programs are relatively new just like the industry. If we look at the response from the universities involved in this research there was a good response from colleagues. It seems 251

that they are driven by ambitious people with passion. Since the approaches differ from one another, universities could cooperate more and share educational materials. Towards the entire cruise industry the universities could present themselves more as a group of Cruise Management schools who more or less deliver a product at the same level. The small amount of student numbers in these niche programs could also be a good platform to experiment with new educational methods. This research could be referred to as a quick scan and additional in depth research is recommended.

15.7 Appendix 1 Questionnaire cruise management programs A comparison of international cruise management programs 1. Name of institute: Rationale for cruise management education 2. Why did you decide to offer a specific cruise management program? 3. What should be the most important aspect(s) of a cruise management education program?

Place in the curriculum Name of cruise industry program(s): Major or Minor: Degree: Duration of program(s): Number of credits awarded: Participants 9. Maximum number of participants: Number of applicants: 10. Total number of students: 11. Nationalities: 12. Division of gender: male……….% female…………%

4. 5. 6. 7. 8.

Recruitment & selection

13. Is there a selection procedure/ assessment for the program? 14. What the ideal student profile for a cruise education program? 15. What should be the main reason for candidate students to register for a cruise education program? 16. How do you promote your program apart from your website? Program characteristics 17. Program(s) offered since …....? 18. Offered how many times per year? 19. Entry level of the program: 20. Language of the program: 21. Involvement from the industry: 22. How do you cooperate with the cruise industry? Faculty 23. How many staff (fte’s) is involved in the program? 24. What are the qualifications of the faculty involved? Program content 252

25. Main focus on land side positions/ sea side positions or both: 26. What are the textbooks used in the program? 27. What other (main)sources do you use in your programs: Educational approach 28. Educational methods as a percentage of the total: 28.1. Lectures …………% 28.2. Workshops …………% 28.3. PBL/CBL ………….% 28.4. Field trips: excursions/ cruise ………..% 28.5. Consultancy ………….% 28.6. Other ………….% such as: 29. Assignments? 30. If you offer field trips or a cruise, what are these and what are the specific features? 31. Is there an option for students to take part in an exchange program? Assessment 32. Assessment methods 33. Point structure: 34. pass norm: 35. Results at the end of the program: Research & consultancy 36. Is there a research program connected to the CM program? 37. What consultancy activities take place with respect to CM? 38. Do you train CM staff as well? Careers in cruise management 39. Internship positions (which positions are offered to students?): 39.1. Land based: 39.2. Sea based: 40. How many students get a job after graduation in the cruise industry 40.1. Land based: ……..% 40.2. Sea based: ………% 40.3. Not in the cruise industry: ………% For any further comments, please use the space below: …..

Thank you very much.

Ate de Groot 253

15.8 Appendix 2 Daily program cruise Stenden students with HAL Daily Program Hotelschool @ Sea Visit Hotelschool Students Voyage 278 Ms Oosterdam Mexican Riviera 7-days cruise Time 9,00 9,30 11,30 12,30 13,00 16,15 17,00 20,00 21,30

Activity Embarkation Safety instruction Lunch Culinary Open House Photo scavenger hunt Guest boat drill Bon Voyage Dinner Welcome Aboard Showtime

Location Guest gangway Crew Meeting Room Lido Restaurant Queen's Lounge TBA Deck 3 Deck 9 Lido Midships Vista Dining Room Vista Show Lounge

Day 2 / First Sea Day

9,00 10,00 10,30 11,00 12,00 13,00 13,30 15,00 18,45 20,00

Breakfast CAC Kitchen Tour Ship Tour Lunch Ship tour (continue) Drinks and BM Q/A Session Royal Dutch High Tea Captains Toast Dinner

Lido Restaurant Queens Lounge Pinnacle Grill Guests + Crew areas Main Dining Room Guests + Crew areas Crowsnest Vista Dining Room, 3 Vista Show Lounge Vista Dining Room, 3

Day 3 / Cabo San Lucas

8,00 9,00 10,30 11,00 12,00 16,00 18,00 21,00

Breakfast Housekeeping presentation Visit Purser / PPO / HRO Filipino Cuisine Lunch Hotel Department presentation Dinner Showtime

Lido Restaurant Oak Room Oak Room CAC Lido Restaurant Oak Room Pinnacle Grill Vista Show Lounge

Day 4 / Mazatlan

8,00 9,00 10,00 12,00

Day 1 / San Diego

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Breakfast Environmental Presentation Nautical and Technical Pres. Lunch Shoretime 19,15 VIP Party 20,00 Dinner 21,00 Lido Pool Party

Vista Dining Room, 2 Oak Room Oak Room Lido Restaurant Crow's Nest Vista Dining Room, 3 Lido midships

23,00 Late Night Comedy

Vista Show Lounge

8,00 Breakfast 9,00 Guest Relations / Front Office 12,00 Lunch Shoretime 20,00 Dinner 23,00 Crew Show

Lido Restaurant Oak Room Lido Restaurant

Day 6 / Second Sea Day

8,00 11,00 11,15 12,00 13,00 20,00

In Room Dining Vista Dining Room, 2 Explorer's Lounge Lido Restaurant TBA Vista Dining Room, 3

Day 7 / Last Sea Day

9,00 Breakfast Disembarkation Talk & Crew 10,00 Farewell 11,30 Check setup for Suite Lunch Evaluation / General Q & A with 14,00 HM 15,00 Indonesian Tea Ceremony 15,15 Superstar Finale 17,30 Best Hotel @ Sea List Ceremony 20,00 Dinner

Day 5 / Puerto Vallarta

Day 8 / San Diego

Breakfast Mariners Brunch Mariners Ceremony Lunch Observation Department Dinner

7,00 Disembarkation

Vista Dining Room, 3 Vista Show Lounge

Lido Restaurant Vista Show Lounge Crow's Nest TBA Vista Dining Room, 3 Vista Show Lounge TBA Vista Dining Room, 3 San Diego Port

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