Leakage and Value Chain in Relation to Cruise Industry

Abstract: The Cruise Lines Association draws an optimistic scenario for cruise, and points out the fastest growing market is in Asia, where Chinese are the main force. Cruise travelling, as a new economic engine, is developing rapidly in China. However, among all the cruise terminals in China mainland, WSICT is the sole profitable port. Serious leakages of cruise industry are considered as the cause. What result in the leakage? In this thesis, a cruise value chain is proposed, covering main stages from planning to shore visiting. By tracking the cash flow in the value chain, potential sources of leakage are come up and then verified in the case study of Shanghai, where two typical companies, WSICT and Ctrip, are further analyzed. The investigation reveals some Chinese-Styled characters, such as “Retailer charter selling”, “packaged cruise products” and Chinese passengers’ preferences. All these factors impact on the value chain differently. The results implicate severe leakages in cruise planning, visiting and shopping. The preliminary success of WSICT could be attributed to its earliest participation into cruise, and geographical advantages. For travel agency like Ctrip, the typical retailer charter selling entitles them the right to design products, so they add extra services such as insurance and shore visiting to enhance profits. Totally, except for port companies and travel intermediaries, limited local communities participate in cruise industry. Hence, more positive policies are essential to motivate local communities.