While Europe is edging closer to the Caribbean's world-leading market share, cruise growth in Europe and, eventually, China will only benefit the region in future, the FCCA member line leaders added. They also urged Caribbean destinations to distinguish their offerings in line with consumer trends and to prepare for more international travelers.
Though the recent hurricane season was the worst they've ever seen, chairmen, CEOs and presidents of top cruise companies speaking at the FCCA's opening session in Mérida, Mexico, expressed optimism about the Caribbean's resilience.
Citing the recent hurricanes, earthquakes in Mexico, typhoons in Asia and fires in California, FCCA chairman Adam Goldstein said this seems to be a period of greater threats from natural disasters. 'Resilience will become essential to long-term success,' he told FCCA attendees.
Goldstein, president and COO, Royal Caribbean Cruises Ltd., added he's been inspired by the optimism and spirit of Caribbean government and tourism officials who are driving recovery but also building back 'better than before.'
Before the storms, everything about the cruise business in the Caribbean region and Mexico's coast was 'completely positive,' Goldstein said. 'The big picture is that people today want experiences. They want to generate the memories of a lifetime. They know they can do that in the Caribbean, in Mexico and on cruise ships.
'There's nothing that happened with those several hurricanes and earthquakes that changes that. The big picture is promising. It's encouraging. It's exciting.'
Of the more than 80 new ships in a record $50bn-plus orderbook, many will be coming to the Caribbean. The additional 200,000-plus berths sound like a lot, but the industry remains capacity-constrained, according to Arnold Donald, president and CEO, Carnival Corp. & plc.
Currently all the world's cruise cabins combined equal fewer than 2% of the world's hotel rooms, Donald said. So the cruise industry is 'tiny.' Every market in the world is underpenetrated. And 'we can only build so many ships a year because there's only so many shipyards,' so the fastest cruising can grow is about 7% annually.
'As long as can create demand in excess of supply, we'll have a very strong industry,' Donald said.
Demand is fueled by people having a great experience, not just on the ship but in the destinations. 'Keep providing great experiences: the sun and fun and beach but also cultural immersion and adventure, and the Caribbean will thrive for years to come because there's lots of pent-up demand,' the Carnival Corp. chief told the FCCA audience.
MSC Cruises is building 10 ships, and the Seaside class was designed specifically for the Caribbean, according to Rick Sasso, chairman, MSC Cruises USA, who said: 'We want to make the Caribbean even more of a home base' as those ships come on line.
New ships, Sasso pointed out, are better for the environment—LNG-propelled newbuilds, for example, are in the pipeline—and they give people more value for money than ever, because they're bigger and offer more amenities.
When it comes to global competition, the Mediterranean and the rest of Europe, with a combined 29.4% market share in 2016, are nudging close to the Caribbean's 35% market share. CLIA Europe chairman Kyriakos Anastassiadis recently predicted Europe should manage to become the No. 1 cruise region, ahead of the Caribbean.
But Holland America Line president Orlando Ashford told the FCCA attendees that while Europe is a 'wonderful market and important to me and my guests, I don't see that six points being closed in a significant way.'
He advised the Caribbean to turn the crisis of storms into an 'opportunity to rebrand as we rebuild and make the Caribbean even stronger.'
In Ashford's view the Caribbean can 'double down, to express the nuances of the diversity that exists ... We have an opportunity to educate people about what the Caribbean really is ... It spans over a million square miles and 100 ports. This is an opportunity to educate people that what they've seen on TV (hurricane devastation) is not the entire Caribbean. It's only four, five or six ports.'
The crisis 'creates opportunity for significant growth and interest in this region. It's something the Caribbean should be encouraged about,' Ashford said.
Sasso told FCCA delegates Europe's growth will be good for them, too. It creates a bigger source market, and Europeans who start cruising close to home may want to try the Caribbean eventually.
Meanwhile, many more first-time cruisers sail in the Caribbean than in Europe, and year-round cruising is 'more dominant in the Caribbean than anywhere else in the entire planet,' as Sasso put it. 'Don't worry. We'll keep building the ships and you keep taking them, because it's going to be good for all of us.'
European brands increasingly sail in the Caribbean.
In MSC's case, Cuba has helped drive that and other destinations, like Cozumel, benefit.
Sasso called the industry's international dynamic 'very powerful. We may have lived off the North American market for the first decades of our life. And now we're living off the European growth and, soon, China. The world is really growing in our favor.'
Ships will bring many more international guests to the Caribbean. 'Prepare for them,' Sasso said. Develop multilingual guides and learn about other cultures to help people feel welcome when they arrive.
All four of Carnival Corp.'s European brands sail in the Caribbean and Donald said it's important that the industry now communicates to Europeans—along with Americans—that the Caribbean is open and attractive.
'Everything is on a positive trajectory,' he added, and Carnival's European brands are all expanding in the region.
As for China, just about a million Chinese cruise annually on ships homeported there—a tiny market compared to the country's 135m outbound travelers. And cruising there is still a B2B business model. But it will grow, and ships will be built in China—Carnival has joint ventures for that—with the first expected in 2023.
What China means for the Caribbean, Donald said, is 'a huge source market for additional guests and, over time, part of the enhanced fabric of the global cruise business.'
Turning to emerging consumer trends that lines would like to see reflected in new shore excursion development, Ashford said Holland America guests consider themselves travelers, not tourists. They like to be enriched, to touch, feel and taste the destination.
All Caribbean ports offer beaches and beautiful weather. Ashford advised adding their rich history and traditions to the mix and figuring out how to communicate those to give a deeper experience.
'Our guests have collected enough things, and they want to collect experiences,' he said. 'They want to collect unique and special experiences so they can go home and make their friends jealous. That jealousy is what brings someone else to come and try to collect those experiences.'
When it comes to being prepared for the growing millennial market, Ashford said 'Millennials like food, fun and sun, just like old people.' It's not a question of age, in his view, but psychographics. Immersive experiences appeal to people of all ages.
Goldstein noted cruise lines have always been challenged to attract people in their 20s and 30s purely because those in their 40s and up have more income and wherewithal to cruise. Big plusses with millennials: they're more experience-oriented than any generation and because of cruising's growth, more of them have cruised as children than any generation before.
'They know it's great. Our research is quite clear they's surprisingly positively oriented toward cruising.'
In respect to Cuba, one forecast tallies more than 450,000 passengers on nearly 300 departures are currently open for booking by the big three US public cruise companies. That doesn't count MSC's two ships in Havana and the various other lines visiting the island.
The FCCA executives addressed how much more Cuba can grow, when and how the rest of the Caribbean can capitalize on Cuba's popularity.
For people in the US, Cuba is a compelling destination, Donald said, drawing both those who may not have had an interest in the Caribbean and giving repeat cruisers a reason to return.
'Cuba is going to refresh the Caribbean, expand the demand for it and enhance the entire region,' he said. Future growth is hard to predict considering the US embargo and tensions between the US and Cuba.
'Our goal to take people where they want to go and to bring people together,' Donald said. 'It's a big island with a lot of ports, a lot of culture, a lot of interesting things. Over time, the future will be very bright for Cuba, and that's good for the Caribbean overall.'
Satisfaction levels for Cuba cruises are high and the visitor experience is excellent, according to Goldstein. But infrastructure is limited. There are just two berths in Havana and the traffic is coming close to the maximum. Future growth depends on infrastructure development in Havana and elsewhere.
Another area of development, the Bahamas, sees major port projects by Carnival Corp. (Carnival Cruise Line's planned new port on Grand Bahama Island), Royal Caribbean (a dock and a world-class development at CocoCay) and MSC (the new Ocean Cay MSC Marine Reserve.
CocoCay gives Royal Caribbean the opportunity to create infrastructure that's competitive on a global scale, Goldstein said. He suggested this is what the Caribbean over time should aspire to: world-class destination capabilities, probably via public-private partnerships.
Carnival Corp. already has private Bahamian destinations in Half Moon Cay and Princess Cays. These provide an 'economic multiplier' by creating jobs and activity, Donald said, while giving cruise lines a reason to keep visiting plus new destinations to draw travelers.
Carnival's Grand Bahama Island port will 'bring people to the Bahamas and they'll sail to other places as well.'
Cruisers have an appetite for 'Robinson Crusoe-type places,' Sasso said. The added spice of Ocean Cay is that it's a sustainable marine reserve, and sustainability is also important to consumers.
While the Caribbean is often seen as the realm of big ships, the FCCA executives said destinations can draw smaller, mid-sized, luxury and expedition vessels if they address the different needs of their passengers.
When it comes to an ultra-luxury brand like Seabourn, 'those people want a different type of experience. They pay for it,' Donald said. 'They want immersion, personalized and customized experiences.'
Azamara Club Cruises, meanwhile, focuses on staying longer in port, so destinations need to think beyond the typical 8 a.m. to 6 p.m. ship call window to after-dark experiences and even what can be fresh for passengers to do on a second day, Goldstein said.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Cruise News to your Google News feed.
