Cruise Execs Take On Implications of Carnival Triumph

Industry leaders addressed the highly publicized Carnival Triumph incident head-on at this year’s Cruise Shipping Miami conference – just as they did the Costa Concordia tragedy a year ago.

Cahill: intensive review
 A solemn-looking Gerry Cahill, president and CEO of Carnival Cruise Lines, appearing on a State of the Industry panel along with other cruise line executives, said Carnival is conducting an intensive review into how an engine room fire could leave a ship with 4,000 people onboard adrift and without power.

He said the line is looking at its entire fleet – with a focus on prevention, deduction and suppression, fire engine room redundancies and running hotel facilities off emergency generators.

Inspectors from inside and outside the company and in Mobile, Miami, Southampton and Trieste, Italy, are working on the issue, he said. Other Carnival Corp. brands are also under review.

“We are now focused on lessons we can learn from the incident and what additional redundancies may be available,” Cahill said. “You can rest assured it is our highest priority in the entire organization.”

Duffy: more regulations not needed
In a keynote address, Christine Duffy, president and CEO of Cruise Lines International Association, which now represents 58 member lines worldwide, said the Carnival Triumph incident impacted everyone in the industry. But noting all passengers and crew on Triumph returned to land safely, she said calls for more industry regulation are unfounded.

“This industry is highly regulated. We have an exceptional safety record. And this industry and its business leaders are committed to responsible business practices,” she said. Like Carnival, CLIA and its members are conducting its own risk assessments in the wake of the Triumph incident, she said.

Stein Kruse, president and CEO of Holland America Line, on the panel with Cahill, noted cruise lines operate under a “very well structured, refined and regulated framework” as outlined by the International Maritime Organization.

“We will have 20 million people sailing on our ships this year and the vast majority will have a wonderful vacation completely incident free,” Kruse said.

Added Kevin Sheehan, CEO of Norwegian Cruise Line, which recently launched a successful IPO, “At the end of the day we’re the safest, safest, safest vacation experience anyone could ever have.”

Cruise sector continues to boom
Despite the Concordia and Triumph incidents the cruise industry continues to boom. Co-keynote speaker David Scowsill, president and CEO of the World Travel and Tourism Council, noted that 20.9 million people cruised last year, an increase of 3% from 2011.

He added that 25 new ocean and river ships are set to debut this year, representing an expenditure of $7.1 billion.

“The cruise industry is the fastest growing sector of travel and tourism,” Scowsill said.

Meanwhile, Duffy said trends in cruising in 2013 will include passengers wanting to explore global destinations and the unknown, big brand shipboard entertainment, romance, specialty dining, outdoor spaces and group travel (including multigenerational).

She said cruise lines are committed to travel agents as their major distribution channel and that agents need to keep up with all that’s new in the industry.

“If you are selling cruises you can’t stand still,” Duffy said.

Emerging markets
While North America remains the most important cruising market, Adam Goldstein, president and CEO of Royal Caribbean International, said the big growth market to watch is Asia. Royal will soon have two Voyager-class ships cruising from Singapore.

“Chinese passengers love their cruises just like everyone else does,” Goldstein said.

Cahill said Australia had proven a hit for Carnival, and hinted Asia may be on the horizon for the line.

Sheehan, who also heads the Florida-Caribbean Cruise Association, said with cruise lines increasingly moving their ships around the world, the Caribbean islands need to reinvent themselves, investing money to keep passengers, especially repeaters, happy and well entertained.

“We need to make sure we’re not getting the same experience at each port of call,” Sheehan said. “We need to make every one of these destinations interesting and safe and provide opportunities for our guests.”