Cruise Industry Outlook Is Highly Positive at Seatrade 2018

Cruise Industry Outlook Is Highly Positive at Seatrade 2018

Panel members at cruise industry conference Seatrade were unanimous in their excitement over the current state of affairs for cruise lines and travel agents By: Marilyn Green
<p>Cindy D’Aoust, president and CEO of Cruise Lines International Association // © 2018 Seatrade</p><p>Feature image (above): During Seatrade’s State...

Cindy D’Aoust, president and CEO of Cruise Lines International Association // © 2018 Seatrade

Feature image (above): During Seatrade’s State of the Global Cruise Industry panel, executives from major cruise lines discussed the industry’s challenges. // © 2018 Seatrade

The Details

Seatrade Cruise Global

At Seatrade Cruise Global 2018, which took place March 5-8 in Fort Lauderdale, Fla., the State of the Global Cruise Industry panel was exuberant this year.

“If you can’t make money now, you’ll never make it,” said Frank Del Rio, president and CEO of Norwegian Cruise Line (NCL) Holdings Ltd., during the panel, where top executives from the biggest cruise companies take the temperature of the industry and address its challenges.

Driving the spirit of the discussion was the determination to reap a larger percentage of the rapidly growing number of world travelers. Cindy D’Aoust, president and CEO of Cruise Lines International Association (CLIA), pointed out that cruising, along with the rest of the travel industry, is responding to the huge projected demand. 

The United Nations World Tourism Organization predicts that some 600 million additional travelers will come into the worldwide market by 2030, fueled by factors that include a rising global middle class and increased interest in authentic culture — particularly from the enormous millennial market. The projected figures would bring the total of international tourist arrivals to 1.8 billion. 

According to Del Rio, although boomers are still the largest cruising group, 25 percent of NCL guests are millennials, which creates “a double dose of demand.” 

Seatrade sessions underlined D’Aoust’s point, as well, as two of the fastest-growing cruise lines — Viking Ocean Cruises and Ponant — announced new ship orders. Viking reported a new agreement with Italian shipbuilding company Fincantieri that could result in six more newbuilds to be delivered from 2024 to 2027. Ponant announced orders for two ships, in addition to its current four-ship order; this will expand its seagoing fleet to 12 vessels by 2021. 

Executives emphasized that creating more capacity is the key to increasing the percentage of travelers who cruise. Pierfrancesco Vago, executive chairman for MSC Cruises, noted that the industry is supply-driven, and Arnold Donald, president and CEO of Carnival Corporation & Plc, commented that the number of ships that cruise lines need is so great that there are not enough shipyards to produce them. 

D’Aoust described the environment as “a global travel rush.”  

“In 2018, we expect to welcome more than 27 million passengers onboard the 449 CLIA cruise line ships, with another 27 new ships expected to debut this year, she said. “Not only are we adding to our fleet, but our ships are also getting bigger." 

D’Aoust added that by 2020, more than half of CLIA ships will carry 3,000 or more passengers. 

Size is not the goal; rather, it’s a result of adding new features, according to Richard Fain, chairman and CEO of Royal Caribbean Cruises Ltd., a line that will launch another of the world's largest cruise ships this year with Symphony of the Seas. 

“What happens is that we have new ideas, and we have to build bigger ships to put them on,” he said. “I am not sure if bigger is better — but better is better.”

During the second phase of the keynote Seatrade session, two new players adding newbuilds to the mix were represented: The Ritz-Carlton Yacht Collection and Virgin Voyages. Both companies expect to bring first-time cruisers onboard due to their company branding. 

The Ritz-Carlton Yacht Collection, which has a strong emphasis on destinations and includes overnight expeditions, will add three 298-guest all-suite ships, each with 246 crewmembers, starting in late 2019.

Virgin also brings its own culture to cruising, promising “an epic sea change for all” with its adults-only ships. Its three “Lady Ships” on order will each carry 2,800 passengers and 1,150 crew, and the first will debut in 2020, with a schedule that brings it to port later than others and with longer port stays.

D’Aoust pointed out that, although destinations are enjoying the economic benefits of increased cruise visits, they also feel the stress of the global travel boom, and the sometimes-overwhelming volume of visitors. 

"Modern cruise ships resemble floating cities, and that brings challenges and responsibilities as well," she said, emphasizing a united approach to environmental sensitivity. 

She noted that many cruise lines have already partnered with sustainability organizations such as  the World Wildlife Fund and The Nature Conservancy “to promote the common interests we share in ocean conservation.”

Donald stressed the need to “listen with empathy to the 700 world ports and destinations” about what is being labeled as overtourism. He reminded attendees — who included representatives from many cruise destinations — that it is not necessarily cruise ships that bring so many people into popular destinations, but that the ships are a visible target for concerns. 

“The goal is to make anywhere we go better,” he said. 

Vago agreed, additionally pointing out that of Venice, Italy’s 30 million annual visitors, only 1 million are cruisers, but cruising is a highly visible player and receives strong criticism.

Fain suggested that shore excursions could be spread deeper into destinations, giving passengers access to more local experiences and making the benefits of visitors reach further. He said it isn’t so much the numbers, but rather the way that cruise lines handle shore visits — which should be designed to protect the environment, educate people and leave clients with great memories. 

Fain and Vago both earmarked another challenge the growing industry faces: the need to recruit, train and retain the huge numbers of crew needed for the new ships. 

Even while addressing the issues that accompany the industry’s rapid growth, panelists were clearly delighted with the performance and future prospects of cruising. Del Rio summed it up well when panelists were asked what they wish for. 

“If it were Christmas, and you were Santa, I would be asking for nothing,” he said.

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