PHOTO: Arnold Donald, Frank Del Rio, Pierfrancesco Vago and Richard Fain from left to right at Seatrade Cruise Global 2017. (Photo by Jason Leppert)
Every year, the heads of four of the world’s largest cruise corporations come together to discuss the current state of the international cruise industry at Seatrade Cruise Global, and this year was no exception.
The format of the conference keynote panel differed somewhat from previous ones, but the players were familiar: Frank Del Rio, President and CEO of Norwegian Cruise Line Holdings Ltd.; Arnold Donald, CEO of Carnival Corporation; Richard Fain, Chairman and CEO of Royal Caribbean Cruises Ltd.; and Pierfrancesco Vago, Executive Chairman of MSC Cruises.
The panel opened with one big reminder that the current order book for new cruise ships currently totals a value of $50 billion. That means quite simply that there is potential to fill a lot more berths with a lot more people, loyalists as well as those new to cruising. Then after a welcome from Cindy D’Aoust, President and CEO of Cruise Lines International Association (CLIA), the four executives tackled four subjects individually before a much-abridged discussion moderated by Susan Li from CNBC, which we will focus on more in the future.
Donald opened with a presentation about technology and innovation saying that it’s, “all about the human spirit” among the Carnival Corp. brands as the company seeks to have guests feel part of a community. This is a crucial philosophy for the industry as a whole as he stated half of all passengers sail on one of the company’s lines. He cited the importance of high touch and high impact over high tech.
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To than end, he took the opportunity to share how the corporation innovates with its four original television shows as marketing and also with its upcoming Ocean Medallion technology for seamless guest interactivity once onboard. After all, he believes travel can be a chance for going back in time or an opportunity to move forward.
Second, Vago took to the stage to discuss shipbuilding, where he claimed excitement is in the hardware, while also reiterating, “we’re guest-centric.” He showed how the industry has evolved from ocean liners converted for cruising to the purpose-built marvels we know today. The example he gave is the upcoming MSC Seaside as yet another new way of evolving by looking back some.
The ship will actually return to a 50/50 weight distribution and layout closer to liners for not only better hydrodynamics but also halves of even equipment for more effective adherence to the safe return to port principle. He mentioned the importance of interaction between the shipyard and all individual suppliers before playfully concluding, “what beautiful toys we play with.”
Third to present was Del Rio, discussing destination planning and calling himself a self-appointed itinerary planner as he either personally prepares or reviews every route. Since he holds that profitability results from destinations, he exclaimed, “I love them because they make us lots of money.” The truth is simple: shore excursions are his company’s number one driver of onboard revenue.
Of course, the considerations to craft appealing itineraries are the first step to success, and the questions that are generally asked are where and how long are the ships in port. The second step is optimizing deployment to maximize yield and port spacing, all while considering seasonality. The answer there it would seem is fostering new source markets and new destinations according to Del Rio, and such solutions include private ones like the new Harvest Caye in Belize.
READ MORE: What Are Cruise Lines Doing To Go Green?
Last to speak was Fain on the topic of the environment, indicating it was a subject he could discuss, “not on behalf of one company but on behalf of the whole industry.” To call ships floating cities he claimed is not just a cliche but an accurate assessment of their status as communities that travelers expect to be clean, healthy and safe. So, the goal he admitted should be to set higher standards implemented in creative ways.
In the case of Royal Caribbean, he believes it’s a full-time job to do it right, and so every ship in its fleet has an environmental officer. He also admitted it’s not that easy either, relaying how a solution to discourage bacteria growth on crushed glass before it can be recycled is to store it in freezers. Thus, he can claim with tongue in cheek, “We have the coolest garbage in the world.” Of course, it is all taken very seriously in the end including water and emissions purification as well.