Capacity increases, product differentiation and skeptical cruisers were among the topics discussed by top cruise executives participating in Cruise Lines International Association's (CLIA) annual Cruise360 conference on Wednesday.
During the conference's first General Session, approximately 1,300 travel agents gathered at the Broward County Convention Center at Port Everglades, FL, as Kimberly Wilson Wetty, co-owner and co-president, Valerie Wilson Travel, moderated the high-level session.
Participating were Orlando Ashford, president, Holland America Line; Michael Bayley, president and CEO, Royal Caribbean International; Josh Liebowitz, chief strategy officer, Carnival Corporation, and senior vice president, Cunard North America; Lisa-Lutoff Perlo, president and CEO, Celebrity Cruises; and Rick Sasso, chairman, MSC Cruises USA.
General Session Highlights
Differentiation is Critical: Addressing the cruise industry's burgeoning capacity, Lutoff-Perlo urged agents to learn about the specifics of each cruise brand, its unique proposition and to “find the right guest for the right brand.”
It's also incumbent on cruise lines to do things that solidify the differentiation. “What we’ve tried hard to do is to carve out a place we could uniquely own with the Modern Luxury platform," she noted, adding that Celebrity's differentiation efforts have been all about, “how do we solidify that place in the marketplace?”
“My biggest frustration is the ‘copying’ that goes on in the industry," she emphasized. "I just don’t think it’s good for any of us. It just confuses the consumer... We prefer to not look sideways, we prefer to look straight ahead."
Competing Against Land Based Vacations: Citing Holland America’s 145th anniversary this month, Ashford talked about his historic brand's mission as it moves into the future: “How do we protect things done right while creating room for the modern twist?”
He believes his line has “done a nice job of balancing that” in everything from food to service, from music to destinations. It’s relied on partnership branding to help in that regard. “You may not know us but you know America’s Test Kitchen, or you know B.B. King's All Stars,” and so on.
Yet while cruise brand differentiation is important, "ultimately we need to make sure that we’re building the right message to compete against land-based vacations,” Ashford stressed.
He said that, similarly, if travel agents keep learning and keep growing their business, that’s a positive. If they start to slow down, that’s an issue.
Creating meaningful travel experiences and celebrating the freedom of travel are also important, Liebowitz also said. On a transatlantic cruise, he said that when guests sail into New York and see the Statue of Liberty, that’s a meaningful travel experience.
Quality and Variety First: Sasso said all lines need to thank all the agents, noting that “as we kept adding ships, you kept finding new customers.”
MSC has experienced fast-paced growth with 14 new ships launched in the past 14 years, with 10 more under construction for the next six or seven years. Sasso said the old adage, “If it’s not broken don’t fix it,” should be, “If it’s not broken, make it better.”
Speaking to the hardware side, Sasso said, the types of ships his line is evolving and designing have different platforms to address what the line thinks cruising is all about.
“Let’s just keep making it better, however that has to be done,” he said, stressing “quality and variety first, and then the platforms themselves have to address the needs of the customers.”
Focus on a Great Vacation: Citing his line’s newest ship, Symphony of the Seas, which comes to Miami later this year, Bayley talked about the most basic reason to cruise – to have a great vacation.
With branding that focuses on families and multi-generational travel, as well as quality, value and fun, “we don’t take ourselves too seriously,” Bayley said. “We really focus on delivering a great vacation [creating great memories] and that’s been kind of our DNA since the beginning of Royal Caribbean.”
Peering Into the Crystal Ball
Looking to the future, “the one thing I see more than anything are the people in this room, the travel agents, because you bring the demand,” Leibowitz told the audience.
Everyone knows how many ships are coming, he said: “So last year there were 25 million cruisers around the world, and in the next five years, we need seven million more. That's a huge number.”
Leibowitz said at least half of that is going to come from the U.S. Cruise lines are in the vacation industry, not competing with each other, he believes, citing the travel agent’s key role of bringing guests onboard.
“And when we do that, there’s plenty of people to fill all our ships and each of our ships are unique,” he said, and putting guests on the right ship is a way to assure growth and success.
“If you want to double your business over the next few years, you have the opportunity to do it,” Leibowitz told the crowd.
Tips for Business Success
Here are other tips the executives gave for ensuring future success:
Embrace Technology: Embracing technology is crucial, according to Sasso. He says both lines and agents must know what the guest wants, but technology is important in communicating with guests.
“I think the supply curve is in our favor and we need to bring in more supply,” but the technology piece has to be integrated into all of that, he emphasized.
"So those of you that are not into technology, that’s an area that you need to learn very quickly because the guest will require you to be an expert at it as well," he told the agent audience.
Be Relevant, Focus on Memories: Bayley said his line spends an incredible amount of time “designing for the future,” and his product and brand have to be “highly relevant to the community and society we serve. There has to be a high degree of relevancy.”
“But beyond that, you have to deliver this great vacation,” Bayley said. It’s about getting the cruise proposition of quality, variety, value and so on targeted to the right market and attracting people who may be thinking of going to a beach resort or all-inclusive resort.
“It’s about being thoughtful about how we think vacations will change,” he said. “But at the end of the day, it’s really quite simple. It’s about memories, quality, the people and being able to reconnect with family and friends and have those special moments together.”
Convince the Skeptics: During her career path, Lutoff-Perlo served as both a travel agent and a district sales manager and discovered early on that some people just weren’t that open to cruising. Today, “I can’t believe that 33 years later some people still say ‘cruising isn’t for me – I don’t belong on a ship,’” she said.
She says that with Celebrity Edge, the line has done all it can to go after affluent vacationers and convince them – with innovative experiences and hardware, and the use of world-renowned designers who’ve never worked on ships before – that “oh, my gosh, I’m wrong.”
“We have to convince the next generations…that cruising is for them,” she said. “We all have to do that.”
What Keeps Executives Up at Night?
When asked what keeps them up at night, the executives talked about capacity increases, competition and changes in the world that the lines can't control.
Lutoff-Perlo said that as she thinks about the last five years, “I think about the places we don’t go anymore. That’s very sad to me. And those are places that so many people wanted to visit – important places in the world and civilization. And we’re not going because of things that are happening.”
That said, Sasso stressed: “We’re in the best period of time that the cruise industry has ever been in…I don’t lose sleep over whether we’re going to find new passengers, because I think they’re coming...You need to figure out how you’re going to get a piece of that.”
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