Pierfrancesco Vago, CEO of MSC Cruises, said media exposure from the Costa Concordia incident has led him to believe that potential first-time European cruisers need to be convinced the industry is safe.
He noted challenges of certain European economies, and also said Europe still represented a strong potential market as consumers have much more vacation time than vacationers in the U.S.
“People are pessimistic about Europe,” he said. “But I’m looking forward with a positive outlook.”
In North America, Gerry Cahill, president and CEO of Carnival Cruise Lines, said that early January business was “never as strong as it was this year,” but fell following the Concordia incident as Carnival also suspended its marketing for a month.
Dan Hanrahan, president and CEO of Celebrity Cruises, said that “cruise rejecters” (people who will not cruise) numbers on surveys were not affected following the January incident.
Norwegian Cruise Line saw no change in cancellation activity following the incident, said Kevin Sheehan, CEO.
But the newbuilding pace is slower, said industry bosses.
The supply demand balance is so important, Sheehan noted, adding that the penetration rate is still small, and he would not want to “starve the growth.”
“We need to be relevant and provide the experience first time cruisers are looking for,” Sheehan explained. “That is what is going to keep the growth going. The slowdown is really because of the economy.”
And existing ships are being invested in, said Hanrahan, who also explained that with new ships, and refurbished old ships, that the brands have moved apart and differentiated themselves to various markets.
At Carnival, Cahill said that with a new ship coming this year, most guests will sail on one of the line’s 23 other ships. Thus, product consistency is key, he said, noting the Fun Ship 2.0 program to put branded experiences in, ranging from entertainment to food and beverage, across the fleet.
Meanwhile, Carnival’s North America-centric brand will base a ship for the first time (year-round) in Australia later this year with the Carnival Spirit.
“We’ve found a couple of other nationalities and cultures that are fond of our product,” said Cahill, talking about excellent scores from Australian passengers on Carnival ships in the Caribbean.
Cahill interestingly also said that 45 percent of the line’s passengers in Europe last year were sourced from Europe, leading to two ships from Carnival in Europe for 2013.
“We’ve identified a couple markets our products work well in,” he added, with a Carnival sales offices recently opening in the UK.
Adam Goldstein, president and CEO of Royal Caribbean International, talked about infrastructure investment outside the U.S., even the potential “drive-to” markets for Royal Caribbean in China some day.