“The future has begun” was the theme of a Cruise Line International Association (CLIA) video kicking off the cruise industry’s annual “State of the Industry” discussion at the Seatrade Cruise Global Conference in Miami Beach, FL, on Tuesday. More than 2,000 cruise line executives, plus a multitude of tourism leaders, cruise industry suppliers, shipyard owners and travel advisors are attending the in-person conference this week at the Miami Beach Convention Center.
Here's the message executives sent:
Full Steam Ahead
As for the current state of cruise industry operations, “I'd say it’s full steam ahead,” pronounced Pierfrancesco Vago, executive chairman of MSC Cruises and global chair of Cruise Lines International Association (CLIA).
Delivering that message in his keynote address at Seatrade's first General Session, Vago reported that the cruise industry expects to return to pre-pandemic 2019 passengers levels by 2023. “Now, even before we enter the summer season, we can see the momentum building in our industry’s revival,” he emphasized.
More than 80 percent of the world’s cruise fleet is back sailing and more than 95 percent of the global CLIA fleet will restart operations by July 2022. Some 280 ships will be sailing by that time.
In addition, more than 100 countries around the world have now opened to cruise visitation including Canada and Australia. Vago stressed that every 24 cruise guests the industry books equates to one full-time job.
It’s “times like this where we value the industry,” he added, noting that unity helped the cruise lines, their industry partners and cruise destinations across the globe regain their footing. “Adversity brought us closer,” he stressed. “As the health emergency is behind us, we now must stay on course to capitalize on future activities."
“Working together,” is what made the recovery possible, said Arnold Donald, president and CEO, Carnival Corporation. He told the audience that “you brought the cruise industry back,” stressing that it’s not only cruise lines that did that: "It’s the whole eco-system."
Donald credited strong advocacy from ports, destinations, travel advisors, thousands of Uber and taxi drivers and others. "Without those voices, we would not have been able to weather this storm," said Donald.
Reflecting what nearly everyone in the room had dealt with the past two years, Jason Liberty, president and CEO, Royal Caribbean Group, put it this way: “We survived a direct meteor hit.”
Health/Safety Record
Talking about health and safety, Vago and others touted the industry’s record, noting that the incidences of COVID-19 on cruise ships has been only a fraction of what's happened ashore. Kelly Craighead, CLIA’s president and CEO, said that people now “look to cruise industry for the high bar it has set by being to manage this pandemic.” For instance, the chance of hospitalization for those testing COVID-19 positive while on a ship is 80 times less than for cases on land. That’s likely due to the cruise industry’s high level of vaccinated guests and crew members, compared with those vaccination rates on land.
While at the pandemic’s outset, “many questioned our viability,” Vago noted, but through strong science-backed protocols and disease mitigation efforts, the industry moved beyond the initial negative perceptions. Now, the cruise industry is “turning into the world’s safest [vacation] option,” he stressed.
Enticing New to Cruise
That said, a slew of new ships in the pipeline also means double digit capacity increases. So, the industry must do even more than in the past to attract guests. “As our fleets expand and as we reduce their environmental impact, we also need to increase volumes to fill a demand gap of 4.7 million passengers by 2025,” Vago noted. That means tapping into demand from loyal past guests and attracting more new-to-cruise guests. Travel advisors are essential to the entire process, executives acknowledged.
Fortunately, CLIA’s latest market research also shows that the public’s desire to cruise is elevated right now. In fact, 69 percent of those who’ve never cruised are open to it. That’s higher than in 2019. Currently, Millennials are the most enthusiastic about cruising with 87 percent ready to sail. As a result, CLIA estimates that the entire global cruise fleet’s return should result in 2023 demand that's equal to 2019 levels.
Vago asked the audience to clap for travel trade partners who have become “the point of care for so many guests” during the past few years. They are so important to the industry, he stressed, yet noted that they have suffered some of the greatest hardships.
We asked several audience members about their perspective on the "State of the Industry" address. From one perspective, Robert Castro, senior director of marketing, Scenic, told us that "the collective feeling is that we’re 100 percent back.” Last year, Castro said, in contrast, it was about “coming back.” But now the industry is moving ahead, he believes: “Now we’re back in operation. We’re going to live with this.”
A Focus on Sustainability
Castro's other top takeaway from the "State of the Industry" was the panel's strong focus on sustainability. Details and goals for the industry's sustainability commitment and progress were presented both by Craighead and Vago, and then echoed by Donald and Liberty. Craighead stressed that the industry is resolved to be a leader in sustainability with CLIA’s oceangoing member lines committing to reach net-zero emissions by 2050. Net zero translates into "no carbon emissions."
“We’re on a hard march to get to net zero emissions,” noted Donald. Meanwhile, the cruise industry will continue to ramp up sustainability efforts with use of batteries, fuel cells and green LNG power.
At the same time, research and development work will continue to create new solutions. "In the coming years, we'll be judged by what we do on sustainability," acknowledged Craighead, while Liberty stressed that “it’s as a high a priority as we have.”
One option that’s helping keep port communities greener is when ships in port plug into the existing electric grid, rather than running their engines in port. “Many ships are ready to receive shore power,” noted Vago, adding that local communities that ships visit are looking at and making decisions to provide what’s needed in that regard: “The cruise industry is ready to plug in,”
Moving forward, it’s good to see that that the global cruise community is united, Vago said. “Adversity brought us closer. Now, we must stay on course to capitalize on future activities.”
For more on Seatrade including news from cruise lines, destination, shipyards and suppliers, stay tuned throughout this week and next for more stories.
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