Price variation across channels: A case of ex-Southampton port cruises

While electronic distribution systems have gained widespread acceptance and adoption in almost all other tourism and hospitality sectors (Richer & Carter, 1999; Kim & Kim, 2004), the same cannot be said about the cruise sector. Investigations and commentaries of the cruise sector’s distribution strategies appear to be few and far between. To address this imminent gap, the conceptual underpinnings of the study will include pricing, distribution channels and their adoption, and to a lesser extent marketing, which are framed by Stern and Reve’s (1980) theory of channel emergence. Although many studies have been conducted on the issue of pricing in the hospitality and tourism industry (O’Connor, 2003), very little has been examined about pricing variations across distribution channels and in particular, no such study was found in the context of the cruise industry. As a result, this could be the first fully comprehensive study of the pricing structure and the marketing strategies that are adopted by the cruise industry today. The study shows that online US intermediaries are more likely to have the lowest cruise prices for cruises on NCL and cruises with durations of 6 nights or less, while online US intermediaries are overall least likely to offer the lowest cruise prices. Cruise companies are also by and large not showing any signs of selling directly to cruise passengers and most are allowing intermediaries to undercut prices. A comprehensive literature review generated three hypotheses covering three variables: direct and indirect methods of distribution, and pricing. Comparisons, differences and relationships is analysed to provide focus and meaning to the quantitative survey. As the cruise sector continues to develop and further establish itself as a promising vacation choice, the study ascertains that there is no pricing consistency across various distribution channels.