By
Michele Witthaus |
Hosted this year for the first time in Fort Lauderdale instead of its traditional Miami venue, Seatrade Cruise Global (formerly Cruise Shipping Miami) ran from 14-17 March 2016 at the Fort Lauderdale Convention Center near the city's cruise port. The event will remain at this venue for the next two years.
The familiar State of the Global Cruise Industry session took place on Tuesday morning, kicking off with a panel discussion between Frank Del Rio, president and CEO of Norwegian Cruise Line Holdings Ltd (NLCH), Arnold Donald, president and CEO of Carnival Corporation, Richard Fain, chairman and CEO of Royal Caribbean Cruises Ltd, and Pierfrancesco Vago, executive chairman of MSC Cruises. Travel editor for CBS News Peter Greenberg moderated.
Introducing the discussion, newly confirmed CEO of CLIA Cindy D'Aoust said that the cruise industry was set to break last year's record of 23 million passengers with a figure of up to 24 million predicted for this year. “Demand has increased by 68% in the last 10 years and cruising now outpaces land-based travel options,” said D'Aoust, adding that the sector accounted for US$119.9 billion in economic impact.
Greenberg asked the panel what innovation meant to them, prompting Vago (whose company has two new prototypes under construction) to comment: “I envisage a ship where people driving by in the port say: 'What was that?'!” Fain said that at a time when the average ship size continues to increase, “innovation has nothing to do with size.” Del Rio said that he was not in favour of “white lab coat innovation” for his three “very distinct” brands. “You have to understand the customer. and you have to differentiate enough that they are willing to pay, otherwise there is no ROI.”
Addressing the impact of shipyard capacity constraints facing the industry and Carnival Corporation's commitment to build ships in China, Donald remarked: “The fastest you can grow is 6% because there are only so many shipyards. It's not enough. We can't take ships out of other parts of the world – we can only grow [by building] in China.”
Del Rio said there was an increasing focus on good maintenance of existing ships as newbuild yards filled their available slots years in advance. “Analysts make the mistake of believing only brand new ships can yield growth, but as shipyards are full, there is more emphasis on maintaining ships at the highest level.” He said NCLH would spend up to half a billion dollars in the next six years on fleet upgrades.
The pent-up demand for cruises to Cuba was discussed, with Carnival brand Fathom due to start cruising there in May, pending Cuban government approval. Donald said: “We do not have approval from the Cubans yet. We're anxiously awaiting it but we are optimistic.”
Regarding Cuba's potential impact on other Caribbean port traffic, Fain said: “In terms of size, it's not going to divert that much traffic from other places, but it is already creating a halo of interest in Caribbean ports.” He predicted that the addition of the island to itineraries would add 2-6% to the choice of places to go and 10-20% to demand for cruises. Vago, whose company already has a ship in Cuba and will bring another next year, said that berthing in Havana was “very complex” due to infrastructure constraints. Del Rio concluded: “My guess is that there will be a slow rolling start to cruising in Cuba.”
A second panel of cruise executives took to the stage following the traditional 'big four' panel discussion, with Charles Robertson, chairman and CEO of American Cruise Lines and Pearl Seas Cruises, Edie Rodriguez, president and CEO at Crystal Cruises, and Tara Russell, president of Fathom and global impact lead at Carnival Corporation answering Greenberg's questions about their brands.
Robertson said that his fleet of nine ships (with two more on order for 2017 and three the following year) was unusual in that “our ships are all built in our own yard” and that this would allow his brands to overcome the shipyard capacity constraints faced by other cruise lines.
Rodriguez said her brand's announcement earlier in the week of the world's largest mega yacht expedition vessel (due 2018) would boost Crystal's plan to become “the world's premier luxury brand portfolio”.
Greenberg questioned Rodriguez on Crystal's decision to buy the SS United States vessel for US$800 million. “The ship is part of the iconic fabric of Americana. How remiss it would be to see it scrapped,” said Rodriguez. “We are undergoing a technical feasibility study process. If it works, we will go ahead. We believe there is a market and we feel very bullish about making the money back.”
Russell explained the new single-ship brand's business model for travel to the Dominican Republic and Cuba on the ex-P&O Adonia. “We are addressing a broad audience looking for purpose-driven travel. It's for people who want to go deep into one place.” She stressed the importance of NGOs and charities with which Fathom works to provide guest activities: “We're working alongside our partners – it's not just us doing this.”
As part of the opening session of the conference, analyst Peter Yesawich, vice chairman of MMGY Global, presented statistics on US interest in cruising. He said that of those who planned to take a cruise in the next two years, 34% were of the Boomer generation (50-68 years of age) while 32% were Millennials (18-35 years of age). In addition, nearly a quarter of those wishing to cruise within two years were grandparents. He said cruise operators would benefit by targeting 'milestone' anniversaries and birthdays for families travelling together. Other findings were that travel agent use was growing fastest among Millennials, and that six out of ten travellers trusted reviews by fellow travellers more than official sources. Yesawich said the 'new frugal' was impacting travel choices: “It's not that people want to buy the cheapest; they don't want to overpay for what they buy.”
Other sessions during the Seatrade Cruise Global conference covered cruise trends in the Americas, Europe and the Caribbean, as well as a range of other topics including global ports and terminals, upscale cruising, revenues, cybercrime at sea, regulations, LNG and culinary experiences onboard. More than 11,000 people were registered to attend the event and its accompanying exhibition attracted over 800 companies from 93 countries.