Cruise Industry Execs Celebrate Positive Momentum, Debate Place of Sustainability in Messaging

“So far we’ve been here an hour and no one has mentioned the c-word,” said Frank Del Rio, the outgoing president and CEO of Norwegian Cruise Line Holdings, Ltd., in a rare moment of contentiousness at the 2023 Seatrade Cruise Global conference being held in Fort Lauderdale this week.

Del Rio, referring to cruise customers, was responding to the fact that the first hour of the morning’s general session had focused entirely on the industry’s sustainability efforts, with virtually nothing said about what’s new for the customer. 

“The industry is spending way too much time focusing on something we don’t know much about… We’re caught up in the narrative that the world wants to be green and blue – and so do I – but we don’t talk about the customer anymore… the purpose of the cruise industry is to provide great vacations for customers and I don’t think we talk enough about it because we’ve been carried away by this narrative of sustainability…”

When asked whether he thought the cruise customer, specifically millennials care about sustainability enough to want to know these things, he said he believes everybody cares about it to some degree, but he implied he doesn’t believe they’re making choices based on it.

Carnival Corp.’s president, CEO and Chief Climate Officer, Josh Weinstein agreed to a certain extent.

“When it comes to cruising, when it comes to holidays, the research that we’ve seen is that what people expect is for us to be good. They expect for us to do good, but they’re not making their holiday decisions based on that because they’re making an assumption. So, if we are not good, we are going to be off the list. But if we’re seen as doing the right thing, then we satisfy a baseline level of expectation and they’ll come with us.”

But Weinstein added that he believes that will evolve over time, explaining that what the bar of what it means to be good will keep going up.

“What we have to do is stay ahead. We have to stay ahead of whatever that consumer definition of being good means and consistently improve.”

While Del Rio may have voiced what many in the room were thinking, Pierfrancesco Vago, executive chairman, Cruise Division, MSC Group and global chairman of the Cruise Lines International Association (CLIA) provided one clear reason to keep sustainability a part of the conversation the cruise industry – and its partners, including travel advisors – are having with consumers.

“We continue to face opposition and unwarranted attacks from activist organizations and some NGOs based on outdated data and statistics. We must address community perceptions in sensitive destinations and if we don’t, misinformation will distort the reality of the well-managed and responsible tourism that we stand for.”

One thing the CEOs on the panel did agree on was the desire to narrow the gap between cruise pricing and comparably land-based alternatives.

“A lot of the industry challenge is that our prices, compared to land-based vacations are low, too low, and over the last few years that gap has actually increased,” Del Rio said. “People will pay for whatever it is that is valuable to them. And it seems that the cruise industry has not kept up with those demands that consumers want because the land-based vacations are eating our lunch in terms of pricing.  

Jason Liberty, president and CEO of Royal Caribbean Group, agreed.

“There’s a huge value gap between us and land-based vacations, which frustrates everybody,” he said.

Weinstein also agreed but said part of narrowing the difference is educating the consumer.

“I agree with Frank in that we are – and we use this statistic – 25 to 50% cheaper than a land-based alternative. My belief is that we have to do a better job communicating the value proposition of what a cruise is to people who don’t know cruising.”

Forward Momentum is Tangible
As in previous years, this year’s Seatrade brings together some thousand or so cruise industry executives, port and destination operators, cruise suppliers and media to learn about what’s new, renew relationships, and begin planning for future cruise products.

The theme for the conference, “forward momentum,” was a message, Travel Market Report heard time and again from destinations and cruise lines alike. Business is booming and the momentum is unlike anything anyone has ever seen before.

“The outlook for our industry is extremely positive,” said Kelly Craighead, president and CEO of Cruise Lines International Association (CLIA). This year alone, there are 14 spectacular new ships that are set to launch in the CLIA fleet. The order book through 2028 shows 62 new CLIA ships, representing more than $40 billion worth of investment.

Passenger forecasts and sentiments are also high.

“2023 passenger forecast shows that we will likely exceed 2019 guest volumes, putting us back on a positive trajectory,” said Pierfrancesco Vago, speaking in his role as global chairman of CLIA. “We expect between 27 and 30 million cruise passengers worldwide this year. This is an incredible achievement. By 2026, we will reach nearly 39 million passengers, so we’re talking about 30% higher than 2019.”

And, he added, more people are considering taking a cruise than ever before.

“CLIA’s latest research shows that 85% of those who have cruised in the past are likely to cruise again… Even among those who have never cruised before, the numbers who say they are interested or considering a cruise are higher than it was back in 2018 and 2019.”