Even with Progress Already Made, There’s Still Room for Cruise Industry to Grow

by Daniel McCarthy
Even with Progress Already Made, There’s Still Room for Cruise Industry to Grow

MSC's Pierfrancesco Vago, Royal's Richard Fain, Carnival's Arnold Donald, and Norwegian's Frank Del Rio on stage at Seatrade. Photo: STC Global.

Despite an unprecedented rate of growth over the past decade, the cruise industry still has room to grow and, with it, challenges to meet, according to a panel of cruise executives that took the stage during Seatrade Cruise Global in Miami last week. 

“I think what people misunderstand about the cruise industry is that we’re tiny,” Carnival Corp. CEO Arnold Donald told the audience. “There’s 1.4 billon people traveling and 28 million in cruise. There are cities with more tourism that the entire cruise industry.”

“I actually think that cruising is becoming an alternative to holiday-making,” MSC Cruises Executive Chairman Pierfrancesco Vago said. “The potential is incredible in Europe alone. In 2017, we had 6 million passengers — one percent penetration of the population. Nine out of ten who go cruising go back home and rave about it.”

New players coming into the industry, like Virgin Voyages and Ritz Carlton-Yacht Collection, are raising the bar, forcing legacy players to adapt and change, lifting the industry higher.

“To have a vibrant industry, you need new entrants. It keeps us on our toes — competition is a wonderful thing for everyone,” Frank Del Rio, NCL Corp.’s president and CEO, told attendees. “To some degree, the industry has gotten too concentrated, so I welcome the new competition … they are introducing new wrinkles into the product.”

Those new entrants are also diversifying an industry that is expected to appeal to more diverse generations than ever.

“The fact that they’re entering gives a credibility to the industry,” Royal Caribbean Ltd.’s Richard Fain said. “This is not one size fits all, some people want different things. One of the nice things about our industry is that we aren’t homogenized ourselves … The trend is to continue to improve.”

New Cruise Ships
New entrants into the cruise space are pushing the industry farther.

Challenges to address
For cruising to push into that space, the industry has challenges to address, including environmental and overcrowding challenges that inevitably come with an industry that grew from around 15 million passengers in 2017 to almost 30 million in 2018, and with more unprecedented growth expected over the next decade.

“We’re constantly looking forward,” Fain said.

Another part of pushing into the space is to change perceptions of cruising among the majority of the population who are still yet to cruise. One of those misperceptions is how big of an impact cruising has contributing to overcrowding in some major cities. In Barcelona, for example, Vago said, there are 50 million visitors that come through the airport every year, around 140,000 a day. Compare that with the 5,400 cruise passengers a day that come through the port of Barcelona during peak season.

“Ignorance is amazingly difficult to overcome,” Fain said. “Part of the reason we’re doing so well with it is because they don’t start with a lot of preconceptions. They start and look at the facts. All of us publish extensive environmental reports and sustainability reports.”

“We need to engage, invest — we’ve been investing together — and ensure that we can guarantee the proper flow, the proper comfort,” Vago said. “Very important piece of the equation.”

Kelly Craighead CLIA  
CLUA's Kelly Craighead speaking for the first time at Seatrade. Photo: STC Global.

CLIA’s Craighead takes the stage
For the first time since being appointed the new president and CEO of Cruise Lines International Association (CLIA) last year, Kelly Craighead addressed attendees at Seatrade in Miami.

“I came to Seatrade for the first time last year and I was totally amazed by the sheer size of the event,” she said. “[It’s a] sign of how healthy this industry is that so many of you travel so far.”

According to data from CLIA, the cruise industry is providing more than 1.1 million jobs to people all across the globe. Part of that is due to the private and public sectors partnering together to advance travel and tourism, Craighead said.

“Together we open boarders, build bridges, and literally introduce the world to the rest of the world,” she added.

And numbers suggest that the industry is growing. In 2018, the industry took 38.5 million people on cruises worldwide, up almost 7% compared to 2017. CLIA cruise line members will launch 18 new ships in 2019.

With that growth comes some environmental concerns. CLIA is pushing its member cruise lines and the industry as a whole to meet the IMO’s goal of reducing carbon emissions by 40% by 2030, something that “will define our industry for the future,” Craighead said.

At the conference, CLIA and Seatrade announced a new initiative to highlight just how big of an effect the cruise industry has in the lives of people around the globe. Called #WeAreCruise, it's telling the stories of people employed by or impacted by the industry.

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