Attending my first CruiseWorld conference in Miami, organised by TravelWeekly, I am struck by three things.
One,
the cruise industry in the US is massive, and Asia is but a drop in the
ocean, to put it in perspective. And while some distribution might
have shifted online, it is largely an offline industry powered by travel
advisors — more than 800 of whom showed up in force to find out how
they can be part of the "great cruise comeback", a term used by Frank
Del Rio, CEO of Norwegian Cruise Line.
Two, this is an industry of fighters — the conference opened with a
speaker declaring, “We did not wait for the light at the end of the
tunnel, we went to light up the b…. ourselves”.
And three, this is an industry that’s not only preparing for the
great comeback but also for the future because long after Covid, it
faces more systemic challenges such as climate change and generational
shifts in consumer behaviour, which will impact distribution and
aspirations.
We see demand for second half of 2022 at record prices.– Frank Del Rio, CEO, Norwegian Cruise Line
That the industry is back is without doubt. There was lots of talk
about strong bookings from 2022 onwards with Regent Seven Seas
round-the-world 2024 cruise selling out in two and half hours. Said Del
Rio, “We see demand for second half of 2022 at record prices.”
And
it is fighting back. Norwegian Cruise Line is in a legal battle with
the state of Florida (a big market for cruising) which has banned
businesses from denying entry to unvaccinated customers. Declaring his
belief that “all vaccinated cruises are for the protection and safety of
our employees and guests”, Del Rio said, “If we have to continue the
legal fight, we will. This is not a slogan. This is what we do.
“It is beyond my comprehension how the leadership in this country has
failed to protect us and if they won’t do it, we will,” he told the
audience of travel advisors at CruiseWorld.
The fact is, he said, bookings are higher for the second half of 2022
and 2023 than they were pre-pandemic and “it is proof that
all-vaccinated is a competitive advantage”.
“In this environment, the vast majority of our target market wants to be with vaccinated people.”
And Alaska is top of the charts as far as cruise companies are
concerned. Of its 28 ships, seven are based in Alaska — “great yields,
great satisfaction scores, every newbie should go to Alaska, then they
are cruisers for life,” said Del Rio.
The
challenge the cruise industry faces as it returns is what is facing
every sector in the US — the lack of staff. The hospitality industry is
said to be the net loser in The Great Resignation and during my stays in
four hotels in New York, Miami and Fort Lauderdale, the lack of
services and staff was evident, with almost every request met with the
explanation, “Covid”, whether true or not.
Del
Rio does not believe that cruises are in the same boat as hotels and
casinos though when it comes to labour shortage, although he admits that
it has crewing issues in Hawaii, with the rule that 75% of crew have to
be American, and “so we are fighting for the same labour market”.
“To start a ship from scratch is hard, it takes time to put Humpty Dumpty back again.”
Norwegian Cruise Line Holdings CEO Frank Del Rio, in interview with TravelWeekly’s Arnie Weissmann at CruiseWorld in November. Photo Credit: Travel Weekly
Itineraries, followed by balcony cabins, strongest driver of yields
The good news is, onboard revenues are higher than ever.
“Pre-pandemic, everyone said they want to buy experiences, not stuff.
But they are buying stuff again, jewellery is a big item onboard. People
are also eating better, our specialty restaurants are doing well.
“People are splurging again.”
The
splurging also extends to people buying premium inventory. “I wished
every stateroom had a balcony. Balcony cabins are the second biggest
driver of yields, followed by itineraries. People want outdoor
perimeters.”
Del Rio is adamant that the “great cruise comeback” should not be
undermined by price cutting. “We are doing this for the longterm. It’s a
slippery slope to drop prices — those who dropped prices in 2008 have
not returned to the same levels. We will do what we can to fill, without
discounting.”
Del Rio acknowledges there was a surge in direct bookings during the
pandemic. “Many agents left the industry, but those that are still
around, are selling more for us. And my bet is once they see the buzz,
those who left will come back too. They will answer the bell when the
bell needs to be answered.”
Addressing the climate change challenge, Del Rio said, “The cruise
industry is being challenged by ports — from Venice to Dubrovnik. We
have to balance between sea days and ports of call, between star ports
and boutique destinations. Itineraries are the strongest driver of
yields and longer more exotic cruises are in demand.”
Turning the spotlight back to Asia, come onboard for the latest regional cruise developments and practical trainings at CruiseWorld Asia 2021 — happening virtually on 14 December 2021 from 2.30pm to 5.00pm (GMT+8).
Click here to view the programme line-up or register for CruiseWorld Asia 2021.
Source: Web in Travel