Last updated: 02:42 PM ET, Thu March 31 2016

State of The Cruise Industry: Top Executives Share Their Thoughts

Cruise Line & Cruise Ship | Carnival Cruise Line | Jason Leppert | March 23, 2016

State of The Cruise Industry: Top Executives Share Their Thoughts

Photo courtesy of Costa Cruises

Annually at Seatrade Cruise Global, executives from the mainstream companies take to the stage for a moderated discussion about the global industry, and usually the broad topics are repeats from years past. However, some new tidbits also make their way in here and there for 2016, and this time, niche cruise line executives were included in a welcome change of pace.

The so-called State of the Global Cruise Industry panel was cleverly broken down into a 4-1-3 format with Peter Greenberg first moderating the following four participants: Frank Del Rio, president & CEO, Norwegian Cruise Line Holdings Ltd.; Arnold Donald, president & CEO, Carnival Corporation; Richard Fain, chairman & CEO, Royal Caribbean Cruises Ltd. and Pierfrancesco Vago, executive chairman, MSC Cruises. Discussions included big ticket destinations like Cuba and China, overcoming travel fears and cruise misconceptions, and the benefits of having travel agents to convey the industry message.

Cuba and China

In regards to Cuba, Carnival Corp. just got final approval from the Cuban government to cruise to the Caribbean country with its new Fathom brand, and MSC Cruises’ Vago believes the region has potential. His company already goes there with international clientele, and he says Cuba has the infrastructure to handle it.

However, Norwegian’s Del Rio predicts a maximum ship capacity of 2,000 guests being most likely. By comparison, Fathom will be deploying the Adonia, which is only a 700-passenger ship. Carnival’s Donald also reflects on how Costa Cruises managed the Havana terminal prior to the line’s acquisition, so he explains the corporate experience is in place to sail there. His thinking is that Cuba will also be a means of generating renewed interest in the Caribbean with former guests wanting to return more now.

Additionally, the cruise lines continue to dedicate resources to the Chinese cruise market, as Donald revealed that China is the largest outbound tourism nation in the world, and Princess Cruises, for instance, is preparing the Majestic Princess specifically for their tastes including custom game parlors in the casino. However, Royal Caribbean’s Fain believes that gambling is secondary to the overall cruise experience.

Fears and Misconceptions

The world remains a volatile place as terrorist attacks continue. But Vago says the industry is resilient among fear, and Donald adds that the industry is fine as long as people don’t panic. Fain gives specific credit to Cruise Lines International Association (CLIA) for the industry growth among such fears, and to travel agents for their ability to reassure guests of cruising safety.

Fain adds that incidents within the industry are very rare, but understands that if something negative happens on a cruise ship, it gets publicity. His solution is to stop saying it’s not fair. The reality, according to Donald, is that the media selects what is real news and what is not, and Carnival works with them accordingly.

Del Rio proposes the need for an honest corporate culture in dealing with issues as they arise, but Fain admits that someone onboard with a cell phone can share information publicly before the cruise line even knows the full details. So, Royal Caribbean is still learning how to best handle the flow of information between guests and the company.

As for misconceptions, Fain says, “people still have such a wrong impression of what cruising is all about.” He goes on to reveal that innovations are designed to overcome them, and even if most guests don’t partake in the rock climbing wall or surf simulator, those are the onboard features that provide choice and attract new customers. Del Rio concludes that, “innovation is first understanding your customer,” and Vago, with two prototype ship classes currently under construction, says, “innovation is my second name.”

Travel Agents and Statistics

The heroes of the industry remain travel agents as Fain praises them as the experts at overcoming aforementioned issues and fears, and Donald believes they are the best at getting the right people on the right brands – and for that matter, the right ships. Del Rio recognizes the importance of keeping up the quality of all the company’s ships, and existing fleet upgrades are underway accordingly, as he knows new and old ships can generate fresh yields.

As a bit of an intermission, singular speaker, Peter Yesawich, vice chairman, MMGY Global, shared some interesting cruise statistics including more high marks for travel agents, particularly that 70 percent of those surveyed said an agent was influential in their cruise line selection. Interestingly, the perception of where to find the best price falls only 18 percent to traditional agencies versus 51 percent to service provider websites, and 43 percent would book from Amazon as a non-traditional source if they could.

The Final Say

Lastly for three, Charles A. Robertson, chairman & CEO, American Cruise Lines and Pearl Seas Cruises; Edie Rodriguez, president & CEO, Crystal Cruises and Tara Russell, president, Fathom & Global Impact Lead, Carnival Corporation were moderated by Peter Greenberg for additional perspectives on the broader industry including small ships, luxury and “voluntourism” respectively.

In fact, Robertson reveals that Cuba is also one of Pearl Seas Cruises’ planned international destinations, and his claim to fame is spending 12-18 hours in each port. He believes one of the biggest struggles in the industry currently is a shortage of shipyards to meet the demand for more new ships, but impressively, Chesapeake Shipbuilding is the company’s own yard for constructing their own vessels.

Rodriguez is proud of how Crystal Cruises is expanding from a singular line to an extensive portfolio of luxury travel products including new ships, riverboats, yachts, airplanes and even a classic ocean liner. She believes the SS United States acquisition is a worthy proposition, as the ship is an American icon, and should it pass its feasibility study, it will head back out to sea. Meanwhile, the company is dedicated to hiring quality people to scale its workforce while letting existing crew also grow into the new products and train new recruits in the Crystal ways.

Rounding out the discussion, Russell described Fathom as a purpose-driven travel product on a cruise ship with a social impact and cultural immersion itinerary heading to the Dominican Republic and a cultural immersion-only itinerary now officially setting sail for Cuba. Demographically, the line’s average age is 34. Half have kids, while half do not, and half are faith-based, while half are not.


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