Economies of scale in the cruise industry

Iva Prekrat; Dario Maradin; Stella Suljić Nikolaj

doi:10.71159/icemit2532P

Authors

Iva Prekrat University of Rijeka, Faculty of Economics and Business, Croatia
Dario Maradin University of Rijeka, Faculty of Economics and Business, Croatia
Stella Suljić Nikolaj University of Rijeka, Faculty of Economics and Business, Croatia

DOI:

https://doi.org/10.71159/icemit2532P

Keywords:

cruise companies, internal and external economies of scale, efficiency

Abstract

The manuscript examines the role of economies of scale as a tool that positively impacts financial stability, cost efficiency, environmental compliance and competitive advantage in the cruise industry. The research analyses both internal (operational, managerial, financial) and external (infrastructure, regulations, industry growth) economies of scale and factors that influence how cruise companies optimise their operations and increase overall efficiency. It is shown that larger cruise ships are generally more efficient in reducing average costs by allocating them to more passengers. At the same time, negative factors affecting cost efficiency are also identified, such as limited port accessibility, increasing complexity and the high cost of regulatory compliance. It also examines how innovation; the use of green fuels and smart systems support long-term operational savings and environmental protection goals. External factors, including infrastructure and the regulatory framework, are also discussed as important elements contributing to or limiting the growth of the cruise industry.

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