Friday, March 27, 2015
This week, cruise line movers and shakers are gathered in Florida for Cruise Shipping Miami, the industry's largest conference. We're on the ground to give you the latest and greatest breaking news and trends.
(3:15 p.m. EDT) -- Asia's hot, but the Caribbean is still pretty darn warm, according to cruise line executives who spoke Tuesday, March 17, about both markets at Seatrade's annual Cruise Shipping Miami conference.
With Asia being the talk of the industry for the past couple of years, it's not surprising that cruise lines have ramped up efforts to attract customers in that region -- China, in particular, which makes up almost half of the entire Asia cruise market, according to Adam Goldstein, chief operating officer of Royal Caribbean Cruises Ltd. and chair for the Cruise Lines International Association (CLIA).
Asians typically take even shorter vacations than Americans do, and nearly half of all existing cruise passengers are younger than 40, Goldstein said. Cruise lines are adapting by changing their marketing tactics and by primarily offering sailings that are shorter than a week in length. Lines also are doing special outreach to Chinese travel agents who aren't as familiar with cruises as their North American counterparts and, therefore, aren't as comfortable selling them to their clients.
Goldstein said the Asia market has nearly doubled from 2012 to 2014, but there's plenty of room for growth. Only 1/12 of the Chinese population traveled last year, and less than 1 percent of those who traveled did so by cruise ship.
With so much of the industry's focus on China, where exactly does that leave the Caribbean?
The answer: In a pretty good spot.
During a panel discussion on the state of the Caribbean, Michele Paige, president of the Florida-Caribbean Cruise Association (FCCA), said market share is down slightly due to the focus on Asia, but more than 20 million people will still be cruising to the Caribbean in 2015.
While demand for Caribbean cruises remains steady, the industry's capacity in the region increased by about 13 percent last year.
"The Caribbean was, is and will always be the most important destination [for the North American market]," Michael Bayley, Royal Caribbean International's president and CEO said.
With demand even, the cruise industry is looking for new ways to fill the larger capacity, including trying to draw passengers from other markets, Bayley said.
"We've got demand issues," said Christine Duffy, president of Carnival Cruise Line. "I think we're much more focused now on how to find the right target market."
Richard Sasso, president and CEO of MSC Cruises USA agreed, saying it wasn't that the lines had purposely neglected to market the Caribbean, but rather several lines saw a void in capacity and tried to fill it at the same time, causing a surplus. "Our nimbleness in changing deployment happened at the same moment," he said, adding that 20 years ago, it wasn't typical for cruise lines to move ships around so much. They'd plan itineraries two years in advance and never think about changing them.
Naturally, Cuba came up during the discussion, and the general consensus was that opening it up to cruise travel from the U.S. will help to draw more passengers -- particularly Americans -- to the Caribbean with the promise of something new and previously off limits.
Sasso supported that point, saying that many people don't cruise until they have a reason besides the cruise itself -- theme cruises, group travel, Cuba, etc. -- to do so.
"I think it's hugely exciting for the region and for the industry," said Andy Stuart, president and CEO of Norwegian Cruise Line, adding that his boss, Norwegian Cruise Line Holdings president and CEO Frank Del Rio, wants to be the first to go and added that Norwegian Cruise Line could be ready to deploy ships there almost immediately when the opportunity finally presents itself.
When asked what the cruise lines can do to ensure passengers want to return to the destinations they visit on their Caribbean cruises, Sasso didn't mince words: "Our job is to bring the people to the destination. Getting them to return is the responsibility of the local government, the people and the destination. If the people are smiling and the food is good, people will come back. If not, they won't come back, and they'll write letters to us, asking us not to go there anymore."
Executives also agreed that ports need to differentiate themselves by offering shopping, dining and excursion experiences that are new and different. Otherwise, passengers may stay onboard their cruise ships.
But make no mistake, the cruise lines said, Caribbean cruising is here to stay.
"Cruise lines do not create demand," Paige said. "Cruise lines go where their passengers want to go and where they can make money." So, as long as cruisers continue to crave sun, sand and fruity umbrella-adorned drinks, the Caribbean isn't going anywhere.
--By Ashley Kosciolek, Cruise Critic Editor