LEARNING OUTCOMES

The course focuses on the main current issues in passenger shipping, namely in the three sectors in which it is presently significant: cruises, ferries, and yachting/boating. For each sector the fundamentals of demand and supply functions, along with market structure and competition are analysed. Furthermore, some macroeconomic issues such as contribution to GDP and to exports, employment, induced effects, and policy guidelines such as tax policies and incentives. The course is intended to provide in-depth information and analysis on the economics of the three relevant sectors of passenger shipping, related to tourism, leisure and sports (cruise, yachting/boating), and to transport (ferries). It also aims at providing the background to: business intelligence and management; research and forecasts; guidelines for policies and laws.

AIMS AND LEARNING OUTCOMES

The course focuses on the main current issues in passenger maritime transport, namely in the three areas in which it is presently significant: cruises, boat/yacht industry and ferries. For each of these areas, the fundamentals of demand function, production costs, market structure and competition are analysed, as well as some macroeconomic issues such as contribution to GDP and to export, employment, induced/multiplier effects, local impact, environmental impact and related issues. Policy issues such as tax policies, incentives, and market regulations are also investigated. 

The course also aims at providing an economic background to topics such as: business intelligence and management; research and forecasts; guidelines for policies and laws.

PREREQUISITES

Basic knowledge in microeconomics, macroeconomics, transport economics.

TEACHING METHODS

Oral lectures, guest lectures and seminars delivered by top representatives of the three industries, plus a workshop involving students' teamwork and a final essay or multimedial presentation.

SYLLABUS/CONTENT

Part I: Introduction and methodology - An overview on maritime passenger transport: historical background and present organisation. Ferries, boating/yachting, cruises: their role in the transport industry and their links with tourism and other industries. Guidelines for sector analysis: (a) Microeconomics: the demand analysis, production function and costs, structure of the market and strategies of the players; (b) Macroeconomics: expenditure, added value, employment, contribution to GDP and to export; input-output links, direct and induced impact, multiplier effects; (c) Economic policy: market regulation, fiscal policies (taxes and incentives), public investment and expenditure, land use and infrastructure planning, environmental protection.

Part II: The economics of cruises - The demand: motivations to cruising, elements influencing the demand (price, income, social effects), competitors, direct and cross elasticity. The growth of the demand over time. The supply: the production function, fixed and variable costs, investment and competition strategies. The market: an oligopolistic market: the big world players and the different forms of competition. The growing macroeconomic importance of cruises in national economies and in related sectors (tourism, shipyards): geographical and economic links. Policies: why, when and how to promote the cruise industry. Fiscal and labour policies. Cruises and the environment, the Concordia case and the “Venice dilemma”.

Part III: The ferry-boat industry - Types of ferries, passenger and mixed transport, geographical distribution. The demand:  function, factors influencing, direct price and income elasticity. Substitutes, inter-mode competition and cross elasticity. Production and supply. The structure of costs: fixed and variable, long and short run. Investment and market/growth/competition strategies. Macroeconomic issues: contribution to GDP and employment, external and environmental effects of modal switch to ferries. Policies: external vs. direct benefits/costs in the inter-mode competition. When and why public subsidies to ferries are useful. Promoting competition vs. the abuses of fiscal policies and vs. private oligopolies/monopolies. Investment and public expenditure in the industry and in infrastructure (ferry/port terminals and land infrastructure). 

Part IV: The economics of boating and yachting - The final demand and the “self-production”. The demand for inputs: vessels, accessories, motors, rent services, leasing and financial services, insurance, bunker, crew, mooring and storage. The supply side: the economics of shipyards, building, maintenance and repair, refitting: production costs, competition strategies. The related sectors of marinas and boat/yacht renting. Markets, market trends, players. The “big crisis” of 2008-2014. Moving towards the recovery. Macroeconomic issues: contribution to GDP and export. An Italian excellence. Direct and induced employment. Impact of the related industries and links with the nautical tourism. Policy issues: how regulations can affect the success of the sector. The consequences of fiscal policies (property tax). Leasing and other regulations. Guidelines for future policies. 

RECOMMENDED READING/BIBLIOGRAPHY

Teaching material will be available at the beginning of the course, on Aulaweb.