Costa Cruises is investing to keep up with demand. President Neil Palomba talks to Sam Ballard
This article was first published in the Spring/Summer 2017 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.
A few years ago the future of Costa looked precarious. The scuppering of Costa Concordia in 2012 made headlines right around the world for years, while the saga with the buffoonish Captain Schettino continued to rumble on for a good deal longer.
By any measure, it was a PR nightmare. The company shrank from selling in the UK (admittedly never a big focus) and instead looked to build up its business in Asia. It opened offices across the continent and now appears to be making big strides in a region that many flag as the future of the cruise industry.
Fast forward to today and the company has four ships on order. Two massive 5,200-guest behemoths and two slightly smaller vessels will all head to the Far East.
“We opened the Asia Pacific and China offices back in 2006,” explains Neil Palomba, president of Costa Cruises. “Today we have four ships in the market and the Costa neoRomantica will be the fifth, arriving this year. Asia has been growing very fast as both a destination and as a source market, primarily China. During the winter, when we run ships from Hong Kong to Singapore, we source passengers from other regions in Asia. There is a huge opportunity – you just have to look at the populations within those markets.”
He’s not wrong. According to the Cruise Lines International Association’s Asia Cruise Trends report, cruise tourism continues to grow at a double-digit rate across the continent. The number of ships deployed to the region grew by 12% from 2013-2016 and passenger capacity grew by 29.3%.
As a source market, the number of Asian cruise travellers tripled between 2012 and 2015. China alone has been growing at about 39% annually. With an estimated 986,000 Chinese nationals cruising in 2015, it’s good but just a drop in the ocean considering the country’s 1.3 billion population.
Even in India, one of the hardest markets to crack, Costa has started to see gains. Palomba admits that while the number of Indians travelling to date has been small compared to the opportunity, it is only a matter of time before the Indian people see cruise as a destination. “Regardless of where they are travelling, I see an opportunity for them taking our cruises in Dubai or Europe – not just cruises from Singapore or Hong Kong.”
However, while more and more lines are deploying vessels to Asia, the trend of sending older hardware to the Far East is seemingly coming to an end. As Palomba explains, in 2019 and 2020 Costa will launch ships specially built for the Asian market. But that’s only half of the story – the two other vessels Costa has on order will be powered by LNG, the most environmentally friendly fossil fuel available. Costa, with the financial might of Carnival Corporation, has become one of the most forward-thinking cruise lines in the world.
“As an industry we have evolved and we know that from an environmental point of view we need to become more sustainable,” Palomba says. “The regulations are becoming more stringent and we need a more sustainable solution from a propulsion point of view. LNG is already available for other vessels – it’s being used by ferries and even cargo ships – so the technology is reliable. We have signed a deal with Shell, which will see the company become our LNG partner. It’s something that we believe in. It’s fundamental. The ships are being built with this technology so we can’t go back – we are investing in it and believe in it.”
“We have always been ahead of regulations and our commitment is to try to implement new and innovative solutions and practices that allow our ships to be among the most sustainable vessels in the world,” Palomba adds. “We have introduced the scrubbers onboard our ships to reduce the emissions of sulphur and through the two new LNG ships we will be more and more effective on our environmental policy. The new rules will be introduced in less than three years, but we believe that this challenge will involve all the stakeholders of the industry including the energy providers that will work closely with the industry to meet the regulations.”
The two larger newbuilds represent a major coup for Costa. Carnival Corporation has 10 brands, virtually all of whom would love the opportunity to launch that much capacity – especially with the added narrative that the ships are more environmentally friendly.
The acquisition has meant that Costa has bought a major stake in the Naval de Marseille shipyard to handle future repairs of ships bigger than any others seen in the fleet. It’s another example of the company’s savvy future-proofing.
For Costa, the ships are going to represent another new direction for them in that the pair will have their designs overseen by Adam D. Tihany, who had a hand in the launches of Holland America Line’s Koningsdam and Seabourn Cruise Line’s Seabourn Encore. The vessels, which have been given a brief of being “Italy’s finest” mark a change from the brash flamboyance of Joe Farcus, who designed most of the recent Costa fleet.
It also fits in with another development for Costa, the opening of its academy for advanced training in onboard hospitality, a partnership between itself, government and professional bodies.
“We are the only Italian cruise line that proudly sails under the Italian flag,” Palomba explains. “Italy is known for a variety of beautiful destinations, but it is also known for its gastronomical experiences and, most importantly, the service. We identified this as the strength of the brand – the service that we offer onboard – which means that we must ensure that our people deliver an Italian service. One that our customers deserve.”
“The academy allows us to train new crew and also constantly train existing crew – including middle and top management onboard,” continues Palomba. “They all have the opportunity to be involved in workshops to create new products and concepts. It’s a way of making sure we always stay on top.
“We, as a company, have defined what our values are: quality, style, hospitality and passion. They also represent the values of being an Italian, especially the passion. From the moment a guest walks onboard they are welcomed into our family.”