Cruise Execs Discuss Hottest Industry Trends

March 15, 2005

In Miami today cruise executives gathered at Seatrade, the industry's once-a-year confab, to discuss the state of the industry. Participants on the panel, more subdued than usual this year, included Carnival's Bob Dickinson, Royal Caribbean/Celebrity's Jack Williams, MSC's Rick Sasso, Norwegian Cruise Line's Colin Veitch and Carnival Corp.'s Howard S. Frank. Oddly, there was no representation from cruising's luxury lines.

Regardless, the two-hour session did provide a glimmer of insight -- from new destinations to an update on NCL America's progress in Hawaii -- into what's around cruising's corner:

Counter to the notion that every traveler is booking cruises nine months to a year out (in contrast to recent years, when folks could still find availability and bargains on a shorter time frame) Carnival's Dickinson complained about the "subtle form of sold-out syndrome." The illusion that ships, particularly during prime seasons like spring break, were already sold out way in advance actually kept people from trying to book a cruise and, as such, Dickinson said, "there was a hiccup" -- or, in other words, there were unsold cabins for cruises at this prime time. "Never," he says, "assume a ship is sold out."

When the topic of cruise new-builds came up, sitting on the hot seat was Celebrity's Jack Williams. That's because that line is one of the few (if the only) big-ship company with nary a ship order. Williams' response? "We are going to grow Celebrity," he said, noting that over the past 12 to 14 months his Celebrity team has been working on design issues for what he calls the "Challenger" series. "We're in the final stages of working through the design and taking it to shipyards" was as much detail as he was prepared to share.

In other new-build news, NCL, which is in the midst of a multi-year process to replace older ships with brand-new built-for-Freestyle vessels, is one of the few lines to have stuck with Panamax-sized ships (the term for those that can fit through the Panama Canal). But Colin Veitch said that, although it's a decision for the future, the line is "definitely considering post-Panamax" sized vessels.

Carnival's Dickinson was pressed for details about the line's rumored Pinnacle project -- which, according to the grapevine would allow for ships in the 180,000-ton range and would qualify as biggest-ever. Dickinson was quite tight-lipped, saying it is "very premature at this point" to discuss...

NCL's Veitch was asked if Pride of Aloha, the line's first U.S.-flagged ship, had gained its footing following its controversial launch last summer. Veitch was candid about Pride of Aloha's "shaky start, a lot of crewing issues to deal with" and noted that NCL America "created a U.S. crew out of thin air, more or less." The CEO noted that the service and cuisine issues onboard have definitely improved, saying there's more stability of crew -- some 500 folks there are on their third contract or more -- and all new crew now undertake a three- to four-week training session prior to joining the ship.

Interestingly, payroll on this U.S.-flagged ship is two to three times higher than that of the line's international vessels. Veitch was bullish on the upcoming launch of Pride of America, promising a "regular quality NCL new-build launch."

The hottest emerging cruise region -- as we predicted in 2005: Watch These Trends! -- is Asia. Carnival Corp.'s Howard S. Frank, who had said last year the corporation would be making a major announcement this winter about one of its lines entering Asia in a big way, postponed it ... but said, "Asia has got tremendous potential. In North America we tend to think of it as one area but there are so many different countries and cultures." Even cruise lines that already dominate that market -- notably NCL's parent Star Cruises -- are probing further into the region. Veitch noted that when Norwegian Sea transfers over to parent Star Cruises later this year, the ship will sail the line's "pathfinder" cruises -- itineraries that are trying out new destinations.