CruiseAfter two years of uncertainty, confidence for the future is high among cruise CEOs.

'Are we really back?' These cruise CEOs are bullish about growth

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Cruise CEOs at the recent Seatrade Cruise Global conference paint a positive picture of recovery and growth for the industry.
Cruise CEOs at the recent Seatrade Cruise Global conference paint a positive picture of recovery and growth for the industry. Photo Credit: Seatrade

Jason Liberty sat across from me at Royal Caribbean Group's headquarters, the day before his first Seatrade Cruise Global conference as CEO. With less than 24 hours to go before the state of the industry panel, alongside the heads of Carnival Corp. and MSC Cruises, our conversation felt like a rehearsal of sorts.

The question everyone wants to be answered, he said, is: "Are we really back?"

After two years of uncertainty, confidence for the future is high among cruise executives.

During the panel the next day, Liberty, Carnival chief Arnold Donald and MSC Cruises executive chairman Pierfrancesco Vago explained why they feel confident. It included customer response to their Covid safety protocols, recent booking rates and evolving consumer behaviours.

Protocols make cruisers feel 'very secure'

At MSC for example, 90% of its guests reported they "felt very secure" with the Covid protocols the line put in place, Vago said. If there was another Covid outbreak, 82% said they would cruise again, he said.

"The fact that we could actually be seen... as the beginning of the problem of the pandemic, and we actually proved to everybody that we were the solution to the pandemic, that, to me was the most important step," Vago said, referring to reports early in the pandemic about Covid cases on cruise ships and the protocols, like testing, that followed.

The ability to have guests back mingling, seeing nature and watching the sunset from the balcony of a ship while feeling safe and secure is "the biggest achievement" MSC has accomplished, he said. "I think we really conquered the public opinion on the capability to actually secure a holiday."

Donald pointed to record-breaking booking days within the company. That includes Carnival Cruise Line breaking its all-time booking record in late March and early April, the sign of a delayed wave season, he said.

He expects the cruise industry capacity will grow by 7% to 10% in 2023 and predicts that cruising will exceed 2019 levels by then.

The fact that we could actually be seen... as the beginning of the problem of the pandemic, and we actually proved to everybody that we were the solution to the pandemic, that, to me was the most important step.– Pierfrancesco Vago, MSC Cruises

"We should be able to comfortably fill that with all the pent-up demand from previous cruise-goers," he said. "Like I know others are too, we're booking new-to-cruise as well."

At Royal Caribbean Group, Liberty said he sees 2022 as a "strong transitional year" with the back half of 2022 beginning to resemble pre-Covid levels. He expects cruise business in 2023 to "look and behave" like it did pre-pandemic, ranging from occupancy to capacity -- with all ships back in operation -- and most ports reopened.

Optimism about who's booking

But it's the demographic trends he's seeing that gives him great optimism. Since the pandemic, more people are spending their money on experiences and multigenerational travel is "through the roof," he said.

He expected capacity within the cruise industry will grow by up to 5% a year, and those trends give him a reason to believe demand will follow.

"There's always sleepless nights. These are very large, dynamic businesses, but I would say that we are definitely on the other side of this," Liberty told the crowd.

And across the table, back at Royal Caribbean HQ, Liberty phrased his optimism a different way: "People now know their vacation is going to happen."

Source: Travel Weekly

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