Cruise industry leaders eye emerging markets for growth
BY HANNAH SAMPSON HSAMPSON@MIAMIHERALD.COM
03/17/2015 6:20 PM 03/17/2015 8:27 PM
The leaders of the world’s largest cruise companies highlighted growth
prospects nearby — and on the other side of the world — Tuesday morning
at the annual “State of the Industry” address at Cruise Shipping Miami.
For more than an hour, top executives from Carnival Corp., Royal
Caribbean Cruises, Norwegian Cruise Line Holdings and MSC Cruises
discussed new opportunities and old frustrations while taking gentle
swipes at each other.
An estimated 11,000 people are attending the cruise industry’s largest
annual conference, which runs through Thursday at the Miami Beach
Convention Center and includes sessions on ports of call, energy
efficiency, technology, public health issues, safety and more.
The biggest news of the morning surrounded not any particular cruise
line but the event itself, which will take on a new but familiar name:
Seatrade Cruise Global.
The conference was known as Seatrade until 2011. Because of scheduled
renovations at the Miami Beach facility, the conference will move for
the next three years to the Greater Fort Lauderdale/Broward County
Moderator Richard Quest, an international business correspondent with
CNN, promised a morning of “grilling the men who are at the top of the
industry” and asked those in the packed ballroom to pose their own
questions via Twitter.
“We are about to get to grips with this industry and if you think this
is your regular Cruise Shipping Miami CEO panel, you are wrong,” he
said. “Nothing is off limits.”
Despite the warning, executives touched on many of the same subjects
they and predecessors have addressed in previous years: their efforts to
command higher prices, reach new passengers, establish new markets and
drum up fresh interest.
Absent was any talk about disasters that plagued the industry in 2012
and 2013. In those years, talk of safety and reliability overshadowed
other topics following the fire that crippled the Carnival Triumph in
early 2013 and the Costa Concordia shipwreck that claimed 32 lives in
January of 2012.
Richard Fain, chairman and CEO of Miami-based Royal Caribbean Cruises,
said that as well as things are going, improvement in the business is
“I don’t think this is time to rest on our laurels,” he said. “We have
not managed to raise our pricing in six years, and that’s not acceptable
over a long period of time.”
Arnold Donald, president and CEO of Doral-based Carnival Corp., said a
commercial the company ran during the Super Bowl this year was meant to
inspire non-cruisers to consider the vacation as an option. The company
had more than 10 billion impressions after the commercial ran, and five
“We footed the bill for the Super Bowl on behalf of the industry,”
Donald said. “It cost us a lot.”
Quest asked if each of the companies were prepared to enter Cuba when
the U.S. trade embargo is lifted.
Frank Del Rio, president and CEO of Miami-based Norwegian Cruise Line
Holdings, snapped his fingers.
“Like that,” he said. “The wonderful thing about the cruise industry is
we bring our own infrastructure. I would bet that all of us on this
panel are ready to move at the drop of a hat.”
Already open and growing, China is proving fruitful, Donald and Fain
said. The biggest challenge, according to Donald, is explaining the
concept of a cruise vacation to potential passengers in China.
“They have no idea what it is,” he said. “We get to create it from scratch.”
Pierfrancesco Vago, executive chairman of European operator MSC Cruises,
said he doesn’t have enough ships to enter that market, while Del Rio
said his company is exploring the possibility.
“I’ve got a fantastic idea,” Vago said to Del Rio. “Let’s unite forces.”
“Once you guys do that, then we’ll buy you,” joked Donald, who heads the
world’s largest cruise ship company.
During a later press event, the Cruise Lines International Association
highlighted the growth of the industry in Asia with findings from recent
research. The region has 6 percent of global capacity, tied for fourth
place with Australia and New Zealand.
Passenger capacity grew from 1.51 million in 2013 to 2.17 million in
2015, said CLIA chairman Adam Goldstein, president and chief operating
officer of Royal Caribbean Cruises.
“It’s just mind boggling that it came to be in the fourth position as
fast as it has,” he said.
Last year, 697,000 passengers hailed from mainland China, a number that
represents almost half of the total cruisers in Asia.
“When we look ahead, what we see is opportunity — lots of it,” Goldstein
At a panel later in the day, executives from four cruise lines discussed
sailing trends in the Americas.
Thanks to improved economic conditions in the U.S., bookings for Alaska
are strong, they said, and the CEOs for Holland America Line and
Celebrity said they are adding capacity in the region for 2015. More
cruises are returning to Mexico as safety improves.
Cuba again sparked energetic discussion, with Holland America Line chief
Orlando Ashford saying, “the minute the embargo is lifted, we’ll be
ready to go.”
But Lutoff-Perlo said her company’s approach might be more measured.
“We’re looking at it,” she said, pointing out that because of the
shallowness of Havana’s port, few ships might be able to dock there.
“But I don’t think all the questions have been answered yet.”
MIAMI HERALD BUSINESS EDITOR JANE WOOLDRIDGE CONTRIBUTED TO THIS REPORT.
Source: Cruise industry leaders eye emerging markets for growth | Miami
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