Given three hurricanes in Texas, Florida and the Caribbean, plus two typhoons in East Asia, “September was challenging but things are back on track and we’re feeling pretty good about this year and we’re feeling good about 2018,” said Michael Bayley, president and CEO, Royal Caribbean International, on Saturday.
Speaking to nearly 1,000 travel agents on Harmony of the Seas for the 2017 National Conference of CruiseOne, Dream Vacations and Cruises Inc., Bayley was interviewed by David Crooks, senior vice president of product and operations, World Travel Holdings, the parent company of the three cruise-selling brands.
Bayley said that the line feels “confident that once you get through these tragic events, which of course we’re all aware of, that things get back on track rather quickly and we’re seeing it,” citing underlying consumer confidence, the economy and the strength of the stock market.
“There’s a lot of very positive signals and people are thinking ‘it’s time for a vacation,’” he said, but acknowledged that, certainly for some consumers in Houston and Florida and markets like Puerto Rico, the situation may be a bit different.
That said, with the challenging aftermath on that Caribbean island, he said that “a lot of Puerto Rican folks are quite happy to get on Adventure of the Seas [now sailing once again from San Juan] and take a cruise.”
First Quarter and Hurricane Aftermath
Speaking about first quarter 2017 results, Crooks noted that his organization “did see some depression in Q1” but Bayley said he wouldn’t see it that way. Instead, “we would see products that have struggled a little bit more in Q1 versus other products.”
Bayley said eastern Caribbean itineraries “have a little more of a struggle,” but the “western Caribbean itineraries have been going gangbusters.”
Earlier, both the cruise industry and destinations/islands impacted by Hurricane Maria had made announcements about progress on clean-up, recovery and cruise ships returning. Bayley visited the islands for a status update about two weeks ago, accompanied by Adam Goldstein, president and COO of parent company Royal Caribbean Cruises Ltd., and Richard Fain, RCL’s chairman and CEO.
The executives met with the Governor and tourism officials of Puerto Rico and toured the island, and did the same for the U.S. Virgin Islands.
He talked about how those in Miami or Fort Lauderdale know that immediately after Hurricane Irma blew through, the vegetation debris was everywhere and soon piled high. “It looked terrible,” Bayley said, noting that four or five days later, “it actually looked worse as all the vegetation was actually dying.”
But “then all of a sudden, you start seeing recovery and clean-up and within two or two and a half weeks, it’s like it never happened,” he said, citing areas in South Florida and in the Virgin Islands.
Bayley acknowledged, though, that certainly in areas of Puerto Rico where there are still issues of no power, that’s obviously different.
Overall, though, Bayley told the agents: “We’ve been very encouraged by the clean-up efforts, the recovery and certainly by the tourism [officials] and the government in these locations who’ve been very focused on getting back to business and really to make sure we understand that the Caribbean is open.”
As time moves on -- into the first quarter and into the summer of 2018 -- “you’re not going to even know that something came through,” he said.
Getting the Word Out
Crooks talked to Bayley about the industry’s intent to help with the bookings in the Caribbean by undertaking a consumer education program rather than heavily discounting.
He also praised Royal Caribbean and other lines, also with executives and representatives in the audience, “about how well you handled the situation,” in terms of assisting with getting supplies into the hardest hit areas, evacuating residents and working to restore cruises that are critical to the economies of impacted areas. That brought a round of applause from the agent audience.
Bayley said: “Adventure of the Seas was the first ship back to Saint Maarten after the hurricane and actually escorted in by the Dutch Navy.”
He told the audience that when that ship eventually returned to Fort Lauderdale, it had 3,200 evacuees, 120 dogs, 45 cats, three parrots and two hamsters. “People had lost everything,” said Bayley. “It’s devastating, and they were obviously grateful that somebody reached out and helped, and many of the cruise lines did the same thing.”
For Royal, he stressed that the officers and crew treated every single evacuee like a top suite guest. “It was really a powerful experience for everyone and we were very grateful we could help.”
Pricing, Harmony and Symphony
First, Bayley talked about Harmony of the Seas, the site of the conference and the vessel that Royal Caribbean considers its flagship. “It’s been just a phenomenal success,” said Bayley, citing high guest satisfaction scores as “unbelievable.” On the revenue side, results are also very good, and he thanked the agents for their support.
Yes, he said pricing on Symphony of the Seas is tracking ahead of where it was on Harmony of the Seas at the same time last year. He noted that Symphony of the Seas will sail in the Mediterranean prior to arriving in PortMiami.
That new ship will home port at the new Terminal A, now under construction: “We think [it’s] going to be quite beautiful and will even further enhance the experience.”
He also said the line will combine that with “a lot of investment in digital and technology…particularly as it relates to the customer experience” but that he wasn’t at liberty to discuss. An announcement is planned on that in New York soon. Royal will also continue with its investment on technology that relates to agency partners.
Crooks praised the line’s check-in process for Oasis-class ships at Port Everglades, which brought applause from the audience. Travel Agent also experienced that check-in on Saturday and found it seamless, quick and unbelievably smooth considering that 5,000-plus guests were boarding.
“Well, on Symphony of the Seas in Barcelona we’re actually introducing what we call a frictionless arrival,” said Bayley, adding that trying to make boarding as seamless as possible is one of the line’s “key missions.”
Guests will be able to come onboard using their iPhone or an app without really any transactional stopping, except security of course. Bayley said that will further improve the boarding process, as will the opening of Terminal A at PortMiami.
New Deployment, Short Cruising
Adventure of the Seas will join Anthem of the Seas at Cape Liberty Cruise Port in Bayonne, New Jersey. Recently updated, “it’s having more work done to it before it comes to the northeast,” Bayley noted.
In discussing short cruise products, Crooks was delighted to see Mariner of the Seas now being tapped as a short cruise product, as it’s a newer ship. “We’re all trying to get first timers and new-to-cruise” and a new ship can help do that, he said.
Royal Caribbean will put Mariner of the Seas through a six-week modernization program and invest over $100 million to update it. Bayley said the line is putting a lot of new features on the ship: “When Mariner of the Seas comes into the market we think it will be a game changer.”
In a teaser, he also said there was something new and exciting coming on Mariner of the Seas – something that will boost the shore product experience – but he couldn’t discuss it as yet.
Royal Caribbean is also investing in building a new pier at Coco Cay, its private island experience in the Bahamas. Mariner of the Seas and other ships will use it. It’s expected to be completed in 2018. While it certainly will help guests come and go off the ship, Bayley noted that it will also help with inclement weather situations.
Fares With Nonrefundable Deposits
Taking questions from the audience, Crooks said many agents wanted to talk about the recently introduced fares with non-refundable deposits. Those are typically cheaper fares, similar tow hat’s been done in the airline industry.
One goal is to bring down the cancellation rate. “We think it makes a lot of sense…and I hope our travel partners are beginning to see the benefit,” said Bayley. “You work hard. It’s not easy. You’re ready to push it [the booking] across the finish line and then several weeks later, all of a sudden that booking is going away.”
Then the agent has to get back into the discussion and find another vacation, and that’s a lot of work, he said: “Nonrefundable is a little nudge to get customers to commit and it reduces what we call ‘churn’… You secure the booking, it’s much stickier…”
From Bayley’s perspective, “we think it’s the right way forward.” Certainly, reaction has been mixed, particularly among loyal guests who were making advance bookings on multiple ships and then, in many cases, later cancelling.
But for agents, “once you have this booking, you’re not losing them all the time, it’s more stable…” and that’s a plus, Bayley believes.
Bayley said he values the relationship with travel partners, adding that “this business is a marathon, not a sprint.”