How Cruises Make More Profits Than Airlines

In the world of travel, the destination matters far more than the journey. The travel industry has adjusted to this as resorts, tour guides, agencies, hotels, and airlines now compete on how fast they can get you to where you want to go. Yet there remains one business who insists that the journey is just as important as the destination. That is the cruise ship. By the numbers, cruises are very much an American phenomenon.

Cruises boast restaurants, bars, bowling alleys, water parks, Broadway musicals, basketball courts, golf, comedy, waterfalls, pools, rock climbing, ice skating, casinos, theaters, go-karts, spas, nightclubs, and arcades. Throw in unlimited alcohol, bottomless French fries, and endless pizza, it makes sense why cruises lean on spectacle and excess for appeal. Industry insiders push every year that cruises are a fast-developing, under-penetrated market with significant growth potential. Cruises are an oligopoly run by three players - Royal Caribbean, Carnival, and Norwegian Cruise Line. In this episode, we’ll cover the business of cruises and dive into these 3 companies who each have their own strategy and go after travelers at very different price points.

0:00 The Sea is Calling
6:01 The Fun Ships
15:07 Feel Free
22:25 Where Extraordinary Happens

[ModernMBA]

🤔In a three-headed race between value / simple fun (Carnival), premium elegance (Norweigan), and flashy entertainment (Royal Caribbean), which strategy do you think will win out over the long term?

[NobodyInTraining]

Making the ship's destination an island THAT THEY ALSO OWN was a genius move by Royal Caribbean.

[foobarFR]

The way you're able to dissect and explain entire buisnesses in less than 30 minutes is amazing.

[asdfghjkl]

Been to about 10 cruises since I was 13. All carnival. I can 100% agree that Carnival is the party boat, you can just tell when everyone docs off. With that said, the whole experience leaves you with a time where you’re very far away from reality, and letting go of daily stress is so much easier. Also there’s so much to do and new friends to make. Very worth.

[EmmaCruises]

Oh hey, that’s me at 15:10! It was pretty bonkers to race go karts on the top 3 decks of a cruise ship. 🤣🏎️

[mrjakeisnumber]

I appreciate that this episode had a clear boundary between the video and sponsored segment, rather than trying to sneak it in

[omeysalvi]

I realize that the line towards the end "people who are so hooked on consumption that they are not satisfied with doing things on land and want to do it on a large boat at sea in the middle of nowhere" is a dig at cruise passengers but helped me realize that it is EXACTLY why I want to go on one. 😂

[Berttheturt]

Crazy when this came out, I just got back from a cruise last week and was curious about how they even made money with how much "free" food I ate. My ticket was almost the price of just a hotel and I got transportation, food, and entertainment included.
Wish you talked a bit more about margins and how cruises have handled post covid times.

[thechickenmaster]

The titanic wasn't a cruise ship. It was an oceanliner who's main purpose was moving people between countries. Not just for vacation trips

[ianbattles]

As a retail worker, it's so nice to spend a week being the lazy & careless customer for once.

[Toweleee]

as former Carnival employee, i can tell you that you are missing one major point atm. After covid, Carni bought their own Casino. Before that, it was concessionaire, which was making major profits. Now Carnival ownes it, which made em biggest gambling industry in the US. They refurbished their ships to enlarge casinos, casino guests get a loth of benefits, from free steakhouse meals, free drinks in casino and even on entire ship, to free cruises, but this people are spending 10.000$++ in casino per cruise. Almost every cruise is Premium or Ultra which means at least 1000 casino guests, so go figure. On the other hand, service is suffering cause of that, but who cares. 😁

[Blake-llmt]

1:43 “Basketball courts” proceeds to show pickleball court lol 😂😂

[phasorthunder]

Titanic was not a cruise, it was an oceanliner, which like an airliner, main purpose is to take people from point A to point B.

[sasham.]

I don’t like cruises but they have been one way for my elderly mom (who hates the hassle of travel) and myself to see a little bit of the world together without a lot of the stress of separate hotels, cars, and meals. Last year she got to see some of Europe for the first time. We spent most of our time offship on shore excursions and the detailed pre-planned itineraries and inclusive transportation was perfect for her. So many great memories!

[rebm]

I'm amazed at the amount of stock pictures and videos that were into this single video. Not to mention the whole amount of information, thank you so much!

[methos]

I've never been on a cruise. At first looking at the activities on the ship I was thinking "yeah that does look like fun". Then comes the description of how the cruise makes money and I remembered "And that's why I don't want to go on a cruise!".

[ElaishaJade]

Newer cruise line Virgin Voyages created a USP of adult only and all inclusive eating and drinks paid for one at a time instead of a package. This removes the three things many potential and current cruisers hate about the industry right now.

[nikkiwikki]

2:58 oh no, hugeeee misconception.

The Titanic/ocean liners *weren’t* cruise ships, they were ocean liners.

Think giant ferry’s or ocean trains. They were simply to transport people from one destination to the other.

99% of the time people weren’t on ocean liners for leisure, but for relocating themselves or their families for new job opportunities or to be closer to family/friends.

They actually *hated* being on ships. The ship designers knew that and designed for it as well (trying to make you forget you’re on a ship, because you’re terrified of sailing on one- and for good reason too).

Cruise ships/cruising is a relatively new phenomena and shares little to no similarities with Titanic/ocean liners, besides both being big boats that carried passengers and crew.

Gotta remember the past is a different world and we can’t apply our logic/things to them ie just because it was a big boat on the ocean, doesn’t mean it was for funsies.

[rkmath]

I’ve only been on one cruise in my life, and we had to save up for a long time to be able to afford it. I was 12-13 at the time and I remember having a good time for the most part, except that all the other kids on the ship were either rich kids or kids desperately pretending to be rich kids lolll.

[michaelpeeler]

Carnival does an incredible job capturing not just the wallets but also the imaginations of young people. My family went on one when I was maybe 12, and I remember the absolute magic of the daily soda pass (root beer + free soft serve meant never ending floats), unlimited food, kids activities… even a lobster dinner in the fancy restaurant included in the food package. It felt so incredibly cool.