Improving revenue performance with third-degree price discrimination in the cruise industry

The leisure cruise industry has enjoyed high levels of growth for nearly five decades due in part to traveler interest in the cruise experience, but also to relatively lower pricing. Although revenue management of cruise fares is now standard practice, there are untapped opportunities to improve yields through data-driven market segmentation and third-degree price discrimination. This paper uses a finite mixture modeling approach to develop, empirically validate, and compare pricing models. By unveiling segments of travelers based on individual attributes, third-degree price discrimination can improve target marketing, the timing and appeal of price discounts, and the matching of variable demand with fixed, though differentiated, room supply. Empirical results from running thousands of simulations with pricing data from one of the world’s largest cruise lines show that the segmentation analysis using third-degree price discrimination can increase fare revenue more than four percent. The modeling approach used in this research extends the emerging literature on revenue management in the cruise industry and offers meaningful managerial implications for advanced pricing tactics and revenue management.     

The cruise industry in China: Efforts,progress and challenges

The cruise industry has evolved considerably and in recent years emerged to become one of the most rapidly developing segments of the global tourism industry, with millions of passengers cruising each year. On a global basis, the cruising sector is overwhelmed by North America. During recent years above average growth rates are reported in emerging cruise markets in the Asia Pacific region. As one of the core elements of the Asian cruise market, China is undergoing rapid growth in terms of both cruise ship visits and cruise tourists. However, limited research has been undertaken in regard to growth of cruising industry in China. The purpose of this article is to report current development of the cruise industry in mainland China. First, we briefly provide an overview of the worldwide cruise industry. Then, we summarize the history and the growth of the cruising sector in China; report characteristics of Chinese cruise passengers and compare them with others; highlight information on geographical distribution, berthing capacity and cruise business performance of each cruise port along China's coastlines; and introduce various cruise policy documents issued by Chinese governments. Finally, we discuss some issues, challenges and relevant managerial implications for developing this niche form of tourism in this country.     

Measuring financial performance through operating business efficiency in the global cruise industry: A fuzzy benchmarking study on the “big three”

Surprisingly, despite extensive research on the impacts of COVID-19 on the hospitality industry, no study develops financial performance benchmarks that reflect these effects. This research seeks to fill this gap by examining the financial performance of companies in the shipping sector, specifically the cruise sub-sector. The "three biggest players" in the sector are the focus of this analysis. Benchmarking is essential for both existing market participants and potential new entrants. Fuzzy methods are used in modeling situations that involve uncertainty. The findings indicate that the three companies' operations must be redesigned in order to produce income and pay off debts. Additionally, Carnival Corporation's resilience is evident in times of crisis, as it demonstrates the best growth prospects, remains dominant in terms of liquidity, presents the highest return on assets, and borrows less than the other two companies.     

The effects of tipping policies on customer satisfaction: A test from the cruise industry

Many in the media have called for the abolition of the practice of tipping and at least some resorts, private clubs, hotels, and restaurants have replaced tipping with automatic service charges or service inclusive pricing. Particularly notable in this regard is the cruise industry, where several of the largest brands have switched to an automatic service charge system. Given the popularity of tipping and its perceived role as an incentive/reward for service, such moves to replace tipping with service charges seem likely to have negative effects on customer satisfaction. We test this expectation by examining the effects of Carnival Cruise Line's tipping policy change in the early 2000s on its customers’ evaluations of their cruise experience. After controlling for the effect of ship and review date, we found that Carnival Cruise Line's guests rated their cruise more positively when they sailed under a voluntary-tipping policy than when automatic service charges were added to their onboard bills. However, this effect was small and need not deter firms from replacing voluntary tipping with service charges. Discussion of this finding focuses on ways services marketers might be able to mitigate this modest negative effect of service charges.     

邮轮收益管理的舱位分配：基于EMSR-a和EMSR-b的比较分析

邮轮业被称为“漂浮在黄金水道上的黄金产业”,近几年达到8％左右的增长速度,成为现代旅游业中发展最迅速的行业。与航空和酒店业一样,邮轮业具有收益管理的所有行业特征,可以看作是典型的收益管理行业。文章基于北美邮轮市场的实际数据,对邮轮收益管理的需求分布特征和存量分配问题进行了研究。首先,以邮轮公司特定航线的需求数据为基础,将实际数据与多种概论分布进行比较,来挖掘邮轮舱位水平上总需求的分布规律。研究表明,正态分布和伽玛分布能较好地拟合邮轮舱位总需求的分布特征。其次,以正态分布为例,基于EMSR—a和EMSR—b两种舱位分配算法,以某次航行的实际数据为基准需求,对高总需求和低总需求下分别考虑（1）高价格舱位高需求和（2）低价格舱位高需求的4种需求状况进行了模拟,并对两种存量分配方法的分配效果进行了比较。结果表明,两种方法分配效果的优劣取决于实际的需求状况。     

Corporate social responsibility reporting in the cruise tourism industry: a performance evaluation using a new institutional theory based model

This paper creates a conceptual model that helps explain the corporate social responsibility (CSR) reporting behaviour of cruise lines in the context of institutional theory. It presents findings from an analysis of 50 cruise lines' websites and sustainability reports and discusses the findings within this conceptual context. The study investigated cruise line reporting on commitments to specific CSR goals, the extent of reporting on initiatives contributing to those commitments and the extent of reporting on progress towards those goals. The analysis indicates limited use of formal international reporting guidelines, an almost complete absence of third-party assurance of reported information, and unclear presentation of information on websites, failing to specify time frames and the scope/source of information. Although most cruise lines reported on commitments, fewer reported on specific initiatives, and still fewer provided meaningful assessments of their impacts or performance. Environmental issues and social and community well-being issues received most attention, while issues of economic prosperity, employment quality, and diversity and accessibility were reported to a much lesser extent. Access to information, its credibility, ease of interpretation, and comparability between companies were found to be poor. Since 2009, industry reporting declined, but recently shows signs of resurgence.     

Selecting a cruise port of call location using the fuzzy-AHP method: A case study in East Asia

Increasing income levels and greater leisure time give people the opportunity to pursue new types of tourism ventures. As one of the fastest growing areas in the leisure travel industry, the cruise industry is increasing rapidly. Due to the benefits that cruise tourism brings to each port of call and the hinterland, it is necessary to be able to analyze the factors that affect cruise lines' port selections. The main objective of this paper is to identify the main factors motivating cruise lines to select specific ports of call and to provide information to port operators that will enable them both to improve their management strategies and to attract more cruise ships, thereby contributing to the revenues of the port and regional economy.     

New performance indicators for restaurant revenue management: ProPASH and ProPASM

Measuring business performance is the first step of the improvement process but without knowledge there can be no purposeful action. Revenue per Available Seat Hour (RevPASH) is an effective and reliable indicator of a restaurant's performance, however, it may not provide the whole picture of a restaurant's business performance. In restaurants, the contribution margin of each menu item is different and it should be taken into consideration when evaluating restaurants’ performance, because the goal of restaurant revenue management is to maximize profit, not just revenue. Although several researchers have explored various issues regarding restaurants’ revenue management (RM) strategy, there has been little discussion on how to measure the performance of RM strategies as they apply to restaurants, except RevPASH. Therefore, this study proposes new metrics, ProPASH (Profit per Available Seat Hour) and ProPASM (Profit per Available Square Meter) and discusses how they can be applied to measure the effectiveness of restaurants’ RM strategies.     

Sustainable service design and revenue management for electric tour bus systems: seoul city tour bus service and the eco-mileage program

Sustainable tourism has true sustainability when it is designed economically and in an environmentally friendly fashion. A variety of methods has been explored to achieve sustainable tourism, and the use of new technologies is a significant trend for sustainable tourism. In the City Tour Bus service, an environmentally friendly tour service can be achieved by using electric buses. Moreover, the social energy saving program helps to reduce the economic burden of building eco-friendly services by providing economic incentives as rewards for environmental contributions. Two mathematical models are newly developed to quantitatively design and operate a sustainable City Tour Bus service. Mathematical model I is developed with two objective functions of minimizing total investment cost and CO₂ emissions. It derives from Pareto solutions with different number of electric buses and battery capacities. Based on the solutions of mathematical model I and the economic incentive from the social energy saving program, mathematical model II investigates the optimal unit service price. Proposed quantitative approaches are applied to the Seoul City Tour Bus service with Seoul Eco-Mileage Program. These new approaches are expected to build and manage sustainable tourism system in scientific way. Moreover, they will provide quantitative bridge between sustainable transportation system and social programs beyond tourism industry.     

Calculating ROI for training in the lodging industry: Where is the bottom line?

The challenge of measuring the effectiveness and efficiency of training has long been a hurdle for human resource and training professionals in the lodging industry. The reporting of a department's financial performance is a basic expectation of leaders responsible for their share of operational goals of a property. The management of revenue, yield, assets, and total quality are all part of the mix; however, for many leaders in human resource and training experts in the lodging industry, justification for expenditures and financial performance expectations are rarely requested.     

Quantitative approaches for economic use of emerging technology in the tourism industry: unmanned aerial vehicle systems

As technological innovations develop, new categories of services are emerging. In the tourism industry, one of the limelight technologies is an unmanned aerial vehicle (UAV) for virtual tourism systems, monitoring, and patrol activities for safety and security. However, for the successful application of a UAVs system, it is important to construct the system in an economic and efficient manner. In this study, quantitative approaches for a UAV system are introduced to support the economic establishment and its efficient operation. Two mathematical models are developed to construct and operate UAVs systems for recreation and safety purposes in the tourism industry. The validity of the proposed models is demonstrated via numerical experiments for both cases. To our knowledge, this is the first approach to address the issues of a UAV system design for tourism purposes. This study is expected to be the theoretical basis for future use of UAVs in the tourism industry.     

Word-of-mouth,buying, and sacrifice intentions for eco-cruises: Exploring the function of norm activation and value-attitude-behavior

Our theoretical framework was designed to explain passengers' decision-making process for environmentally responsible cruise products. Specifically, the goals of this study were to investigate passengers' decision formation by employing the Norm Activation Model (NAM), to extend it by integrating the value-attitude-behavior cognitive hierarchy, emotional process, and normative procedure, and to test the moderating impact of non-green alternatives' attractiveness in a cruise context. The measurement quality was found to be adequate. The prediction power of the proposed framework was superior to the original NAM. Findings from the structural model revealed that the hypothesized associations relating study variables within our proposed theoretical framework were generally supported; personal norm acted as significant mediators; and the role of personal norm and social norm in building intentions was salient. Additionally, the hypothesized moderating impact of alternatives' attractiveness in determining intentions was supported.     

Mergers and acquisitions in the hotel industry: A comprehensive review

This study aims to evaluate the current status of merger and acquisition (M&A) studies in the hotel industry and propose directions for future research. Forty-six articles were identified from ScienceDirect, Scopus, and EBSCOhost including 31 empirical and 15 conceptual articles. We review these articles from five perspectives, namely, journal/year distribution, methodology, research context, theoretical foundation and major topics. Findings reveal most studies on M&As in the hotel industry (hotel M&As) focus on performance, motivation and objectives. Developed economies (DEs) are the major research contexts and quantitative approach is the dominant research method. To this end, we propose seven research directions that cover outstanding themes as follows: 1) exploring M&A process, 2) M&A performance assessment, 3) identifying M&A impacts on stakeholders, 4) examining cross-border M&As, 5) examining emerging economies (EE)-based M&As, 6) investigating macro environment impacts, and 7) premium determinants and their impacts on hotel M&As.     

Crisis and Africa's tourism industry: A comprehensive review and agenda for future research

Although several studies have investigated crisis and crisis management in tourism, knowledge, and scholarship are limited in this field, especially in third-world nations like those in Africa. This paper presents a comprehensive review and synthesis of crisis management literature in Africa to address the gap in current understanding. The content-based analysis of 77 published articles from 29 journals provides a deeper understanding of Africa's tourism crisis research and scholarship trends. A three-stage integrative framework classifying crisis management literature/approaches was developed: pre-crisis, during-crisis, and post-crisis. This paper examines Africa's current and emerging tourism crisis issues identified in the analysis. It also discusses the implications of existing studies on crisis management research and outlines new research directions and implications concerning the COVID-19 pandemic.     

A Proposed Research Agenda for the Refinement of the High Performance Work System Construct in the U.S. Restaurant Industry

Abstract

The current research proposes a framework for the investigation and conceptualization of high performance work systems in the U.S. restaurant industry. The projected U.S. restaurant industry sales for 2006 are $511.1 billion according to the National Restaurant Association (National Restaurant Association, 2005). Because of its size and impact on the foodservice industry and the hospitality industry in general, improving the performance of the restaurant industry could help increase overall revenues and guest satisfaction in the foodservice and hospitality industry. By identifying a list of high performance work practices in the industry, a more in-depth exploration of these practices and then organizational policies can be aligned together to help improve overall performance in the U.S. restaurant industry. The current study provides theoretical background and support for the high performance work systems theory.     

The intellectual structure of research in hospitality management: A literature review using bibliometric methods of the journal International Journal of Hospitality Management

The purpose of this study is to analyze the existing literature on hospitality management from all the research papers published in The International Journal of Hospitality Management (IJHM) between 2008 and 2014. The authors apply bibliometric methods – in particular, author citation and co-citation analyses (ACA) – to identify the main research lines within this scientific field; in other words, its ‘intellectual structure’. Social network analysis (SNA) is also used to perform a visualization of this structure. The results of the analysis allow us to define the different research lines or fronts which shape the intellectual structure of research on hospitality management.     

Analysing passenger behaviour towards the catering industry: Implications for airport management

This research note seeks to provide the most detailed analysis yet of passenger behaviour towards the airport catering industry. With the broadest sample to date among similar studies, namely 37,000 passengers surveyed at 8 different airports with 38 explanatory variables, a large number of conclusions have been drawn. The most important of these is that the factors that most influence a passenger's using a catering establishment during his/her stay at an airport are his/her physiological needs and social reasons. However, contrary to what was anticipated a priori, socioeconomic status only has a moderate influence, while having a wide range and variety of foodstuffs on offer does not result in passengers consuming more. It is also observed that low-cost airline passengers consume less than those of traditional airlines, probably due to the stress related to boarding with these types of airlines.     

Levels of quality and environmental management in the hotel industry: Their joint influence on firm performance

Many studies have examined quality management and environmental management separately. This paper analysed the commitment to quality and environmental management at the same time, and their separate and joint effects on hotel performance. The empirical data were collected from a sample of 301 3-to-5-star Spanish hotels. A cluster analysis was carried out to identify the levels of commitment to quality and the environment. Then, ANOVA and regression analysis tested the quality and environmental commitment levels-performance link. Three levels of quality and environmental commitment have been identified. The findings showed that the commitment to quality and environmental practices influences hotel performance.     

Bridging the gap: An examination of the relative alignment of hospitality research and industry priorities

Effective organisational decision making in a highly competitive and fragmented market demands current and relevant insights. Given the global perspective in which the hotel sector operates, the need for such insight is intensified. This study seeks to establish a dialogue focussed on responding to this need by examining the relative alignment of hospitality research and industry priorities for the purpose of informing industry practices. First, a literature review of academic and trade publications in the hotel sector provide a baseline understanding of current discussion in their respective communities. Second, a series of in-depth interviews with managers of hotel properties were used to assess the perception of industry priorities on contemporary issues. Findings suggest that industry priorities are not consistent with the emphasis in the literature. Most notable, generational change was identified as of particular importance with respect to managing employees, while brand differentiation, or lack thereof, was highlighted as a concern when operating in a highly competitive market. To date, both issues appear to have received limited attention in the literature, representing a significant opportunity for future academic research.