The majority of people on a Royal Caribbean Cruise Line sailing may not be able to climb to the top of the ship’s rock wall, but having it available is meaningful to everyone on board.
“The truth is most of our guests can’t climb to the top. But they want the option,” said Royal Caribbean International chairman and CEO Richard Fain. “It says something about the industry. It really helps redefine us.”
Indeed, redefining cruising through innovation was the theme of the State of the Cruise Industry panel at the 32nd annual of Seatrade Cruise Global in Fort Lauderdale this week.
Royal Caribbean’s Fain was joined by Norwegian Cruise Line president and CEO Frank Del Rio, Carnival Corporation president and CEO Arnold Donald, and MSC Cruises executive chairman Pierfrancesco Vago on the panel.
According to Del Rio, the cruise industry is steadily growing at 6% per year, due in large part not to the newer vessels entering the market, but to new options being offered on older ones.
“NCL will spend an excess of half a billion dollars to upgrade our vessels,” he said. “You’re going to see a more balanced approach of new builds and maintaining the existing fleets.”
For Carnival, Donald said the route to innovation comes from listening to passengers. “You have to think differently. We listen very carefully to the guest,” he said. “Innovation for us is actually how you convert that difference of thinking to, what is in the end, an experience.”
While cruise lines try to cater to the growing market of solo travelers, NCL’s Del Rio said that designating a significant number of cabins on a ship to solo travelers just doesn’t make financial sense. “It’s not the best return, it’s an adequate return, [for us] and we’ll include single cabins on all our new builds,” Del Rio said. “But I doubt we will increase the percentage.”
“It’s an innovation,” Del Rio said, but “it’s not our top-of-the-list innovation.”
Not everyone agreed, however. Cunard’s refurbishment of the Queen Mary 2 adds 15 solo cabins—something CEO David Noyes called “an important part of [our market].”
“On the original Queen Elizabeth, Queen Mary, and Queen Elizabeth 2, there were a number of solo cabins and we’re following in that tradition,” he said. Noyes said Cunard almost always sells out of solo cabins on each sailing.
Zika and challenges to growth
Though the cruise industry is constantly growing, there are potential challenges on the horizon: fuel prices going up, Zika and other viruses spreading, and political tensions and terrorist attacks. Yet all the panelists predicted strong growth, with new ships and new destinations increasing the total number of cruise passengers from 23 million in 2015 to 24 million this year.
“The history of the industry has been remarkably strong,” said Fain, noting how quickly the industry recovered after 9/11.
“That stuff happens every year. So as long as it happens every year the way it’s be happening, as long as people don’t totally panic, we’re fine,” agreed Donald. “It’s just part of our business.”
At a cruise conference held the very day that the U.S. officials opened Cuba travel to individual travelers, the Communist island was obviously a hot topic.
“We are anxiously awaiting approval,” to sail there, said Donald, whose Fathom brand willl be one of the first to bring Americans there.
While Cuba does not have the infrastructure to support mega-ships right now, it will provide a spotlight for the Caribbean as a region, just as Royal’s rock-wall provides a spotlight for its brand. “In terms of size, it’s not going to divert that much traffic from other places because it doesn’t have the capability of handing that many ships,” said Fain. But “it has created a halo of interest…I think it will raise the Caribbean in total.”
The Caribbean is “by far the largest cruising destination today—42%-43% of all deployments—so I think Cuba when it opens up… will shine a bright light into the whole overall area,” said Del Rio.