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At Cruise Shipping Miami’s State of the Industry roundtable, North American cruise executives were unanimous in seeing the end of 2011 and the start of 20012 as exceptionally promising for the industry, an excellent start that hasn’t completely vanished after the Costa Concordia tragedy.
Gerry Cahill, Carnival Cruise Lines president and CEO, said he has never seen business as strong in five years as in November, December and the first half of January. Cahill said that there was a dropoff after the Concordia incident, and that Carnival did no marketing for a month. Now, marketing efforts are back and “things are picking up.”
He said Carnival still took more bookings in the first two months of 2012 than in 2011, at slightly higher pricing. And he forecasted a strengthening in the industry in the U.S. this year -- not so much had the Concordia accident not taken place, but still an increase.
Dan Hanrahan, president and CEO of Celebrity Cruises, pointed out that Celebrity frequently checks surveys for the numbers of cruise rejecters – people who simply don’t want to cruise – and there has been no increase. Likewise, Kevin Sheehan, president and CEO of Norwegian Cruise Line, reported that there has been no change in cancelation activities.
CLIA president Christine Duffy, who testified in the recent U.S. hearings on cruise safety, described Concordia’s effect on cruising as “profound” and added that safety is the industry’s is highest priority, essential to its business. She described the days and weeks following Concordia, when cruise executives worked with the International Maritime Organization (IMO) and others and undertook its own Operational Safety Review. Duffy said the Secretary General of IMO applauded the review, which immediately resulted in the implementation of increased standards on mandatory muster drills.
She told delegates that cruising has seen 28 fatalities, 22 of which were crew members, out of 223 million people who sailed in the 10 years before Concordia, adding that no fatalities are acceptable, but it remains clear that cruising is one of the safest forms of travel.
Carnival Corporation vice chairman and COO Howard Frank, the current chairman of CLIA, called the Costa Concordia tragedy heart wrenching.
“Much of the focus was on what was wrong,” he added, but I am hoping that one day we will recognize the heroic acts and also the wonderful residents of Giglio, who opened their homes and hearts.”
He pointed out that the industry has historically bounced back quickly, adding that a record 16 billion passengers were carried worldwide in 2011, and CLIA expects a new record this year. He said CLIA is developing a new framework this year that reflects the industry’s globalization and looking at the profile of the next generation of travel agents.
In an emotional addition to his speech, Frank added personal comments on Costa, saying that he couldn’t be prouder of the Costa organization and their management team and praised Italian seamen as among the best in the world.
“Costa will come back, stronger than ever before,” he said.
All the participants referred to the potential for the future in the small penetration of cruising in all markets, even North America. Stein Kruse, president and CEO of Holland America Line, nearing his 30th anniversary in the industry, noted that one percent penetration in the burgeoning markets in India and China would more than double the market. Kruse had pointed out that the industry needs to feed that growing market with additional ships, while MSC Cruises CEO Pierfrancesco Vago announced that the company has just ordered another vessel, which will bring the company’s total to 12, representing 800 percent growth since 2004.
All the executives applauded the travel agent community, which dealt with customers after Concordia.
“In the last couple of months, agents have demonstrated their value to the cruise industry as third party tremendous advocates,” said Cahill.
Sheehan referred to agents as “the lifeblood of cruising.”
And Adam Goldstein, president and CEO of Royal Caribbean International, said that he was struck by how much more sophisticated and efficient today’s travel agents are.
“We are really lucky to have such passionate people selling our cruises,” said Goldstein.