In the first half of our two-part series with Arnold Donald, Carnival Corporation & plc’s president and CEO, the executive candidly shared his thoughts about brand consolidation, fleet reductions, COVID-19’s impact on company debt and more. (Read it here.)
In part two, Donald provides insight on the international and domestic return of cruising, as well as which brands will come back online first and current cruise demand.
How confident are you in the current reopening timeline for cruise travel?
I am pretty confident about the current reopening timeline in Germany. In terms of opening times anywhere else, I do not have a timeline. We will see what happens.
We voluntarily extended our pause in the U.S. through September. Centers for Disease Control and Prevention (CDC) recently has come out with a no-sail order that goes through the end of September, as well. So, those things happen to be in line, and we will have to see as we get into August whether sailing in October makes sense or not.
That depends on a whole lot of variables, not the least of which is the situation of COVID-19 in the U.S. population. We disagree with those who see cruise as particularly more risky than other forms of social gatherings. We will let the science decide all that — not just one scientist, but the actual facts and data.
We do not see cruise as automatically having to be more risky than other forms of social gatherings, but if people are not social gathering at all, then they probably should not be on a cruise, either. But if society is appropriately socially gathering, doing so in a way that is consistent with the interest of public health, then we can talk about cruising.
We do not see cruise as automatically having to be more risky than other forms of social gatherings, but if people are not social gathering at all, then they probably should not be on a cruise, either.
What brands and itineraries do you expect to come back first?
Right now, it is a pretty easy answer. Aida Cruises is going to be first because we are going to be sailing in August in Germany, and it looks like everything is on point for that. After that, we will have to see, because the virus moved from east to west. Europe has gone through the surge and all the stuff that the U.S. is going through now.
Two or three months ago, nobody would have been talking about socially gathering in Italy, for example, but now they are because the incidents of the virus have dropped dramatically in Italy. So, Italy could be next. There is also Spain. I think Spain already announced some expanded travel and tourism protocol opportunities. That means for Carnival Corporation, Aida and Costa Cruises will more than likely be first. From there, we will see how things are going.
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How does the return of international brands in Europe set the stage for U.S. brands?
There will clearly be learning from anything that starts up. At the same time, every place is a little different. Our Aida brand is a different brand. It carries 98% Germans, and it feels, looks and behaves differently than the Italian brand Costa or the U.S. brands Carnival Cruise Line, Princess Cruises or Holland America Line.
In that regard, there will be things to learn, but it is not going to be cookie cutter — what we do in Europe is not automatically what we are going to do in the U.S. when the U.S. opens.
For the U.S. brands, it has to do with where the ships are going. The Bahamians are going to have slightly different protocols than if the ships are headed down to Barbados. That is the way it has always been, and is not new or unique. They have different rules, regulations, guidelines and so on.
Are there any current case studies that you are following more than others, such as the reopening of Las Vegas or even theme parks?
We have a bevy of global scientists and medical experts, and they are following everything — not just Las Vegas, but also South Korea, Italy and Germany. They are following everywhere in the world to see the learnings from every place.
Our behavior will be informed by a global network of medical experts and scientists that are doing the real work here.
You have got to keep in mind the industry is still small. Pre-COVID-19, half a billion people a year traveled on vacations around the world. And 30 million took cruises — that’s all. So, it does not take a huge demand to fill the capacity that we have.
How does the upcoming COVID-19 Global Scientific Summit play into all of this?
We are happy to be partnering with the World Travel & Tourism Council, and we wanted to do something specifically about the science related to COVID-19. We are not trying to say here is the answer for travel, or here is the answer for cruise. But people are getting information from so many different places, and a lot of it is conflicting.
We thought we would pull together some of the best minds in the world for a concise three-hour period where people who were interested could hear the best thinking around the science on COVID-19: epidemiology, transmission, detection and testing.
And then from that, we will go into prevention, social distancing and mask wearing, and then into the science of therapies and a vaccine. After those sessions, there will be one where we have some notable figures, including one Nobel laureate, who will talk about what is the best thing for an individual to do to mitigate spread.
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So, in that context, they will debate different topics if they are not in line with each other.
Thousands of people have already registered, and I will take a lot of questions and give them to the scientists ahead of time so that they can debunk myths and highlight things that are really controversial. They will be able to tell us, “here are the things that are still being debated and we do not know yet, and here are the things that are confirmed, that we do know well and understand.” And then people can go about making their own life choices.
Domestically, what kind of demand for cruise travel are you currently seeing?
If you look at bookings, we are actually in the normal historical range of booking patterns for 2021. We are on the lower end of the range which, given the circumstances, is no big surprise. That tells you that even with all the stuff you are hearing out there, there is pent-up demand for cruising.
You have got to keep in mind the industry is still small. Pre-COVID-19, half a billion people a year traveled on vacations around the world. And 30 million took cruises — that’s all. So, it does not take a huge demand to fill the capacity that we have.
With staggered starts, we are looking at a much, much smaller capacity opportunity for a huge base of previous cruisegoers. Therefore, in the early days of starting up, my advice to guests would be to work with your travel professional if you really want to cruise early because there is probably going to be limited options and supply, driven by the fact that there will be limited itineraries and destinations.
Therefore, in the early days of starting up, my advice to guests would be to work with your travel professional if you really want to cruise early because there is probably going to be limited options and supply, driven by the fact that there will be limited itineraries and destinations.
To entice further sales, do you anticipate any special rates, deals or promotions?
We will have to see how all that plays out. Once things start getting up again, it is probably going to be demand from previous cruisegoers who have a lot of confidence in cruising and who know that we are only going to operate from a vantage point of what is in the best interest of public health.
So, there will be plenty of demand. Until it happens, you do not really know, but certainly the dynamics all point to a situation where, if I were to think about cruising, I would book with my travel advisor well ahead and not be focused on deals and stuff at this point in time.
What message do you want to share with travel agents right now?
I want to thank them because they, too, have been extremely supportive of our people and our brands. I hope travel advisors feel acknowledged in how we have handled things such as cancellations and what we have done with commissions in terms of rewarding on the canceled and then rewarding again because we know it takes time to rebook. We are pulling for travel advisors, just as they are pulling for us, because it is a partnership.
We are very deeply appreciative, and I know it is a tough time for a number of folks out there. Hopefully, they can weather the storm as we are fighting to do, as well, and then we will come out on the other side leaner, stronger and better with lots of pent-up demand. Together, we can get people back to cruising so that we can help bring the world closer together.
How are Carnival brands reassuring their travel partners and their clients?
I think our brands are all very active with their travel agent partners and with their previous cruise-going base in terms of communicating real time as best as they can, because, sometimes, they get caught at the last minute, as well.
I appreciate everyone's patience with the deluge of cancellations, refunds and future cruise credit administration and management. And I appreciate all those who are patient as we just had to redo systems to handle an unprecedented volume. We are pretty much caught up everywhere now. We may have a few lagging places, but we have been able to clear the backlog and handle much larger volumes.
It is reassuring to them that we have got our priorities straight: compliance, environmental protection, health, safety and well-being.
What can travel advisors be doing to ensure a solid restart of the industry?
First and foremost is for travel advisors to be as knowledgeable as they can on the big concerns for everybody right now. Be knowledgeable and communicative in the right ways so that people are not unnecessarily frightened and are not taking undue risks.
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Being a responsible citizen from a public health perspective is step one, and then step two is being knowledgeable about what are the Carnival brands doing when the time comes. Trying to figure it out now before you are ready to sail people in a region does not make a lot of sense.
And then be knowledgeable about the guest experience in terms of what are they looking for in a vacation; what are they looking for in an experience; and which brand is best suited to give that particular client the experience they are looking for. That is why we love travel advisors and are dependent on them.
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