This chapter aims at contributing to the literature by analysing the cruise sector from an industrial organisation perspective. Section two deals with the nature of cruise economics, focusing on issues of scale and scope. It provides a rationale for pursuing large company size in the industry. Section three explores the dimensions of competition in the cruise sector in terms of prices, service/product characteristics and capacity. These dimensions are structurally interrelated with the cruise liners’ size and scale. Section four focuses then on barriers to market entry; in conjunction with the previous sections, it can explain the observed concentration in the industry. The chapter subsequently discusses issues of major importance in competition analysis, assessing the impact of market dominance, mergers and acquisitions; in this context, it deals with definitions and boundaries of product and geographical cruise markets. This framework offers the necessary background for the brief case study on the recent merger between Carnival and POPC. Finally, section six concludes and provides directions for further research.


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