By
Michele Witthaus |
Frustration with European Union regulators and lack of understanding from government decision makers were among the issues that surfaced at Seatrade Europe 2015.
The traditional State of the Industry panel discussion that kicked off the biennial conference for the region’s cruise industry took place on Wednesday 9 September, with cruise presidents and CEOs taking questions from US broadcaster Todd Benjamin.
Delivering the keynote address, Pierfrancesco Vago, chairman of CLIA Europe and executive chairman of MSC Cruises, said that the regional statistics for cruise were impressive despite some negative influences. He attributed lower European embarkations last year to a drop in capacity in the Mediterranean and ships being redeployed, as well as to geopolitical concerns and challenging exchange rates with a weak Euro and a strong dollar.
“However, in the long term the outlook remains positive,” said Vago. “Growth in the Eurozone has never actually stopped.” He cited an 18% rise in economic output, with source markets up 14%, and direct expenditure and cruise employment up 18%.
The main concerns for Europe, said Vago, were port infrastructure and reception facilities, inconsistent application of the EU Sulphur Directive, restrictive visa procedures, and localised opposition to the cruise industry in some marquee ports.
The challenges of meeting the EU Sulphur Directive were top of mind for several of the panel. David Dingle, chairman of Carnival UK and vice chairman, CLIA Europe, commented on a lack of communication between the parties involved in the regulation, with cruise operators often left out of planning until late in the day. “We need to be much more involved in the discussions from an early stage. We want more partnership between operators and regulators and we want to be welcomed to the table as partners, not people to be wary of,” said Dingle.
The effects of ongoing geopolitical upheaval were considered by the participants.
Royal Caribbean Cruises Ltd.’s Dominic Paul was upbeat on his brands’ (and the industry’s) ability to manage localised crises. “The reality is that it is very unusual for things to turn out as bad as people say,” he said.
The panel discussed how best to manage port development to accommodate growth, with divergent opinions on the priorities for the industry. Gianni Onorato, CEO of MSC Cruises, commented: “Many cruise lines have been obliged to enter into the terminal business, but our business is to manage ships.”
For Karl Pojer, CEO of luxury operator Hapag-Lloyd Cruises, the style of port growth was all-important and big cruise terminal schemes were a distinct turn-off. “We are looking for ports where big ships cannot go – natural ports that are thinking to grow authentically.”
The role of the European regulators drew strong criticism from participants. “Europe is very good at regulation, at stopping us doing things, but is not doing a good enough job at recognising opportunities,” said Dingle. “We need a holistic approach to promote sensible growth.”
The ongoing difficulties surrounding visa availability for cruise tourists was hotly debated, with the cruise executives agreeing that despite some movement towards easing the difficulties, much more remained to be done. RCCL’s Paul said: “We’re not saying there should be no borders but asking how we can make it less bureaucratic.” He cited research that showed one in five visa applicants dropped out during the process due to the perception of onerous requirements to obtain a document.
Turning to the need to attract more Europeans to cruise vacations, Benjamin asked why it was that only one per cent of Europeans currently cruised. Costa Group CEO, Michael Thamm, agreed that this was an issue. “This is a community of 500 million people and we have only six million passengers. That is a low penetration and we need to ask how we can grow.” He added, however: “We are not just looking for pure growth but for qualitative growth.”
Speaking for the German-speaking market that her company serves, TUI Cruises’ CEO Wybcke Meier remarked: “The biggest group we are aiming for is people who have not taken a cruise. We need to promote cruise as a classical, great customer experience.”
Moderator Benjamin attempted to gauge the level of interest for European cruisers in ‘the ship as destination’. As might have been expected, the smaller and luxury niche operators argued that the ports visited remained higher on the list of cruise attractions than time spent on the ship, especially as overcrowded ports were not a problem for them due to their ability to call at smaller and niche destinations.
Chairman of Silversea Cruises, Manfredi Lefebvre, said: “For us, port facilities are not important. Many times we are at anchor, tendering, or using Zodiacs.” However, he added that Silversea was concerned to improve the experience for its guests onshore, once they left the comfort of the ship.