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Legislation more stringent, but demand for cruising ‘strong,’ leading industry figures say

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L-R: Mary Bond, Felix Eichhorn, Hervé Gastinel, Marie-Caroline Laurent, Wybcke Meier and Michael McCarthy
The current demand for cruising is strong and will remain so for the foreseeable future, but more rigorous legislation will pose challenges.

That is according to Ponant CEO Hervé Gastinel who joined the ‘State of the European Cruise Industry: Insights on Scaling Sustainably’ panel this morning, on the first day of Seatrade Europe (September 6-8) in Hamburg, alongside other leading industry figures and moderated by Seatrade Cruise Portfolio Director Mary Bond. 

2025 outlook

‘2025 will be even more stringent in terms of regulations – ETS and Fit for 55,’ said Gastinel. 

‘I would also like to consider some other issues by then, especially the acceptability of cruising by local communities… We need to collectively think about mass tourism, and find a way to build and create more meaningful tourism – more purposeful, more responsible. That means... our contribution to local communities must be stronger. It's a long way to achieving that.’ 

Marie-Caroline Laurent, director general, Cruise Lines International Association - Europe, detailed some of the challenges surrounding existing and forthcoming legislation and explained that CLIA is working with the European Union to find solutions. ‘We'll see next year some of the CII (Carbon Intensity Indicator) ratings coming out from the ships. What is important to us is that the system has clearly been developed for the shipping industry. This is not adapted to cruise or ferry, it is based on the length of mileage. To have a good rating you need to not touch a port.’  

Additionally, Laurent explained that in several other industries, suppliers are typically held accountable for a lack of fuels, but when it comes to the cruise segment – which is calling out for e-fuels and biofuels – the burden of responsibility falls on operators. ‘For maritime we don't have that obligation on the suppliers, everything is left on the operator to figure out – to find its own innovation – to get full access to the fuel.’ 

Calling for a mandate on suppliers, she continued, ‘I don't want people in the room to think that we’re whining and constantly asking for support... We are left alone with a problem, with no indications from the fuel supplier, unlike other sectors.’ 

Laurent noted there will be 40m cruise passengers globally in 2025 and that Asia will ‘hopefully’ have reopened fully by then, which will also influence cruise activity. 

Felix Eichhorn, president, AIDA Cruises raised the point that ships may be able to run on methanol by 2025 while Michael McCarthy, chairman, Cruise Europe is ‘very confident that by 2025 we will have new ports and new destinations, and exploring air connectivity so you don't end up with the three ships in a port one day and nothing for the next two days and so on.’ He said more ports will be equipped with shore power.  

2023 and 2024

The 2023 season is ‘one of the best seasons we’ve had in our history,’ remarked Laurent, while McCarthy described the year as ‘hugely successful.’ He said, ‘We certainly want to thank the lines for their confidence in keeping ships in the [Europe] region. The situation in St. Petersburg and the war has had a knock on effect. Some regions, particularly in the western part of Northern Europe have benefited probably more.’ 

Cruise is ‘outperforming’ other ways of travelling in Europe, according to TUI Cruises CEO Wybcke Meier, with booking strong this year and into next year. She highlighted the impact on cruising when Russia was pulled from itineraries, but said that had now changed, the line having created fresh itineraries incorporating other Baltic countries. She cited ‘really strong bookings for Northern Europe’ and said winter cruises from Germany were taking off. 

Eichhorn said ‘demand is really there for the German market’; 2019 was a record year for the country, counting three-million cruise passengers and ‘outstanding’ bookings pre-Covid, and now ‘four years later we are back on track.’

Gastinel revealed Europe is in ‘very high demand post-Covid,’ with the region representing around 25% of the destinations Ponant visits. ‘And the summer has been brilliant, occupancy rates, large… we expect 2024 to be full [at full capacity] so that's a strong rebound.’ 

He said that the luxury cruise sector is nevertheless being impacted by issues in the aviation sector and the rising cost of long-haul flights. ‘This is a major issue, first, because the costs are becoming, in some cases outrageous. We keep seeing double-digit inflation year after year plus increasing taxes and at the same time, I feel that the level of service is declining in most cases. Airlines [and airports] are having trouble finding staff, immigration can be sometimes dreadful. Security checks can take hours and hours. So a lot of disruptions which become problematic for the luxury trip. And it can sometimes ruin the experience because we are responsible for the entire journey of our customers. So this is a major concern.’ 

He said partnering with cruise lines is becoming ‘more and more crucial’ to tackling issues.

Climate change

Asked by Bond whether cruise operations are being impacted by climate change, McCarthy described the sector as ‘unfairly’ the focus of environmental scrutiny due to its ‘visibility.’ He called for a 'contingency plan with accurate data we can release in the event of unfair [exposure].’ 

Gastinel said operations are not currently impacted, with the exception of wildfires affecting some cruise lines’ sailings. There is a shortage of water on some islands, leading Ponant to bottle and recycle its own water, while avoiding ‘dropping garbage In tiny village communities.’ He said that 'Scaling Sustainably' – the theme of this year’s Seatrade Europe – meant for him ‘going beyond reducing carbon emissions.’ The line, he said, has previously supported polar and climate research.