This research paper investigates the factors affecting pricing strategies and models
within the cruise line industry. The kind of pricing models that can contribute to the
development of pricing strategies and processes within the industry is also being
investigated. The first and the latter are both this research’ purposes and are important
topic for both academic and managerial perspective.
The paper uses Carnival Corporation’s two distinct brands, the premium Holland
America Line and the ultra-luxury The Yachts of Seabourn as a case study to find out
the existing pricing strategies and models in the industry today. Pricing factors and
processes are also taken up. Semi-structured interviews with key personnel within
sales and revenue were done and used as a source for empirical data. Studying the
case’s website also supports the gathered information from the interviews. Scientific
articles and business textbooks were studied for theoretical perspective. Journals
about pricing, pricing in the cruise line and revenue management written in random
by, for example, Phillips (2005), Lieberman (2012) and Oxenfeldt (1973) to name a
few were primarily used. The academic textbooks written by Olve et al. (2013) about
pricing and the method book by Bryman & Bell (2011) are a few of the examples
used amongst others. By analyzing and comparing theoretical information and
empirical data, the author of this research comes up with viable results that aim to
give a better understanding of the subject in both academic and professional fields.
The findings show that the cruise industry still focuses primarily on profit that makes
pricing a critical part of the process. There are several factors affecting price decisionmaking
and strategies that include sales, seasonality, and customer’s feedback. The
primary objectives for these decisions are long-term profit, growth, loyalty of resellers
and brand’s reputation. It was also founded out that the existing price models could be
adjusted in order to conform to the other types of hospitality businesses. One or more
characteristics of the five components in the price model equalizer by Olve et al. can
be used and combined if necessary. These findings have theoretical and practical
implications suggesting that the cruise line industry’s price setting continues to evolve
and adapt when deemed necessary.
2014. , 48 p.