New cruise ships are flourishing, even during tough economy

By Donna Tunney

FORT LAUDERDALE — Added capacity in the form of newbuilds that entered service in recent years has enhanced, rather than challenged, growth during tough economic times, cruise line executives told agents attending Travel Weekly’s Cruise World 2011 and Home Based Agent Show.

Commenting as part of the President’s Panel keynote event this week, Norwegian Cruise Line CEO Kevin Sheehan said, “Economic periods come and go. We took the opportunity to showcase our new ships to new cruisers. They looked at us as we were launching, and we gained insight into people who hadn’t cruised before.”

Sheehan was alluding to the 4,000-passenger Norwegian Epic, which launched in June 2010.

The President’s Panel was the premier event in the first full day of the co-located conferences, which drew upward of 1,500 agents, executives and supplier representatives to the Fort Lauderdale Convention Center.

The shows opened Nov. 2 and continued through Nov. 4, with cruise ship inspections being held throughout the weekend.

Royal Caribbean International CEO Adam Goldstein noted that Royal Caribbean had launched two megaships, the Allure of the Seas and the Oasis of the Seas, each carrying more than 5,000 passengers, during the recession years.

Goldstein said people would ask, “We’re in a macro-economic meltdown; why did you launch the biggest ships in the world?”

The answer, said Goldstein, is that “you’re building an asset that’s going to [endure], especially if we’ve created something that has compelling features for families in particular. And lo and behold, they have prospered beautifully.”

In addition to Goldstein and Sheehan, the panel featured Richard Meadows, president of Seabourn and executive vice president of Holland America Line, and Rick Sasso, CEO of MSC Cruises USA. Travel Weekly’s editor in chief, Arnie Weissmann, moderated the keynote panel.

Meadows noted that Seabourn had added three ships in recent years, increasing the line’s capacity by some 200%.

“It goes back to resilience,” he said. “People recognize the importance of vacations in their lives today. Our perspective focuses on what makes our brand special. We’re focused on the classic Seabourn guest and the first-time cruiser in the luxury category.”

All the executives agreed that the potential for attracting the first-time cruiser is a key objective in all categories: contemporary, premium and luxury.

Meadows urged agents to “know your client and have a story that defines the product you’re trying to sell.”

As for the luxury market, he said, there are 7.4 million American households with a net worth of more than $1 million. “We’re just [barely] touching that market,” he said.

Cruise categories sparked a lively discussion among the executives.

Can agents still differentiate between the categories, Weissmann asked, or have they become blurred in recent years as cruise lines altered and enhanced onboard services and/or accommodations?

In Norwegian’s case, Sheehan noted, the line “got rid of four or five older ships and introduced the Haven,” a private-access area slated for two ships currently under construction: the Breakaway and the Getaway.

“It provides the best of both worlds. Agents have to understand the different lines,” he said.

Goldstein said he believes that “consumers couldn’t care less about the bizarre industry lingo we use. They just want you to hook them up with a great vacation. It doesn’t matter how we’re compartmentalized into those categories.”

MSC Cruises operates MSC Yacht Club, an exclusive, private-access area on two of its ships. Sasso quipped that the Yacht Club “is better than [Sheehan’s] Haven.”

There was a time, he said, when the industry was more formulaic.

“It used to be that younger guests went here, the older ones went there, and we had income guidelines telling us where consumers [would book],” Sasso said. “But the rubber hits the road on the combination of price tag, food and spa offerings, the destinations and level of service and pampering. We changed the industry on purpose.”

Turning to global sourcing and the international market, the panelists agreed that while certain regional deployments are geared to a local population, agents shouldn’t be concerned about booking American guests on ships that have a majority of international passengers.

“We are immersed in this endeavor,” Goldstein said of Royal Caribbean's growing international presence. “We absolutely want Americans on our ships at all times. As we go out globally, sourcing from all markets, the U.S. is still our No. 1 market. The opportunity for the agent is to understand what the customer’s interests are.”

He added: “A lot of Americans would enjoy the guest mix when it is representative of the region they’re visiting. Find out if they would be uncomfortable being on a ship with mostly Brazilians, for example.”

Sasso said MSC ships carry only about 20% Americans when they are deployed in the Mediterranean. MSC is based in Italy.

“It works,” he said. “You can design menus appropriately. And entertainment. There is something out there for everyone. We’ve all found ways to address cultural differences.”

And yes, he asserted in response to a question from Weissmann, the pasta dishes on an MSC ship are more al dente.