Industry Leaders Discuss Global Cruise Business and Challenges in Miami


CEOs from Carnival Corporation, Royal Caribbean Cruises, Norwegian Cruise Line and MSC Cruises came together for a state of the industry panel at Cruise Shipping Miami on Tuesday morning.

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The four companies and their associated brands represent nearly 90 percent of global capacity, according to Cruise Industry News data.

Three of those four companies are publically traded, leading to careful answers from company bosses.

Where does the industry stand right now?

“I think the industry is very strong and I think the basic underlying infrastructure is outstanding … but I think clearly in the past few years we have experienced demand growth less than capacity growth worldwide,” said Arnold Donald, CEO of Carnival Corporation. “The opportunity for all of us is to attract the new to cruise and emote what cruising really is. “

Added Richard Fain:, chairman and CEO of Royal Caribbean Cruises: “The focus of a lot of the talk is how much better things are now. It’s a little bit mistaken to focus how better things are now, it was an anomaly the last few years with the difficult times we have had … we’ve had an amazing history with strong growth and good performance. Even in those times we showed how resilient we are as an industry. I’m feeling very good about the years ahead.”

Kevin Sheehan, president and CEO of Norwegian, described the industry as a phenomenal value. “We’ve been able to preserve through these events and grow the industry through it all,” he said. “My hope is we have strength in the economic landscape.”

MSC Cruises Executive Chairman Pierfrancesco Vago noted that Europe had been challenging recently but overall, with a shrinking European economy, the cruise industry was still growing in the region.

But the industry will need to keep finding customers to grow.

“The growth opportunities are everywhere,” said Donald, noting five ships serving mainland China from Costa and Princess brands. “There is plenty of upside opportunity. The point here is there is really of opportunity everywhere. The trick here is to communicate with the new to cruise.”

Fain noted stats that said passengers that have cruised are five times as likely to repeat taking a cruise compared to those that have not sailed.

For Norwegian, with two new ships in the last 12 months, Sheehan said attracting new cruisers was down to doing something different in promotion and onboard activities. Examples included Blue Man Group aboard or promotions shoreside from Undercover Boss to the Bud Light Hotel for the Super Bowl in New York.

Growth will also come from pushing revenue up – both in ticket pricing and onboard spend.

Norwegian’s acquisition of Sixthman, a charter company, has meant the Norwegian Pearl was almost entirely booked by charter clients in the first quarter. With music-theme cruises, most guests are first-time passengers, brining people new to cruising aboard, said Sheehan.

Calling it a cruise industry adventure, MSC started operations in 2004, said Vago.

“Distributing globally with one brand,” Vago continued, “with offices in 50 countries, has been an incredible opportunity.”

China remains a green field, advised Donald, who said that the majority of Chinese still had no idea what cruise was about.

Talk of industry potential, newbuilds and attracting new passengers comes on top of a recent string of incidents.

Donald referred to incidents as a rare, and said TV networks saw an opportunity to show something. And in the Triumph’s case: four days of “good TV.”

Since then Carnival Corporation has been working hard to give media the right context, much like the airline industry has.

“We have great, great stories, and we have to get them out there,” said Donald.

“The fact is we provide unbelievable vacations,” Fain noted.

Stay tuned this week on cruiseindustrynews.com for the latest news from Miami.

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