Leaders from the top four cruise conglomerates, Carnival Corporation, Royal Caribbean Group, Norwegian Cruise Line Holdings and MSC Group’s Cruise Division, gathered in Miami Beach on Tuesday morning to discuss the state of the global cruise business.
“Nobody asks us about (fuel) hedging when the price is low. The starting point is fuel is something we need for our business. The focus for Carnival Corporation is to use less. At the end of the day if we use less fuel we will save money and it’s better for the planet,” said Josh Weinstein, CEO, Carnival Corporation, speaking on the current geopolitical situation that has driven fuel prices up.
“It’s true, it will hurt us at this particular moment.”
Weinstein said at the end of the day, it’s a healthy business with a great balance sheet with record demand.
Weinstein said cruise had become a mainstream vacation choice for markets around the world.
“That sets up very well for volatility. There is always going to be volatility in the world,” he said. “The great thing about this industry is we adapt, pivot and persevere.”
Jason Liberty, chairman and CEO, Royal Caribbean Group, said that the company had been advancing technology and use of biofuels and alternative fuels.
“That is in preparation for getting us closer and closer to net zero goals,” he said, noting it was more about what fuel is available, also noting price and scalability.
Liberty explained the current fuel conversation was temporary and would not change the company’s pursuit of alternative fuels.
Weinstein said that technology, thanks to AI, has been moving quickly.
“Cruising is about reducing friction so people can enjoy the hospitality we give them with our crew aboard,” he noted.
“We need to make it as frictionless as possible and enjoyable as possible so they get to spend time with their friends and family in a real life scenario.”
Weinstein said a cruise vacation was a “ridiculous value gap” to other vacation options and that meant the industry was well positioned to compete.
“Scarcity protects us and allows us to maintain the type of product and experience that we want to provide at a price point that is successful for the business.”
Liberty said the value gap was frustrating.
John Chidsey, president and CEO, Norwegian Cruise Line Holdings, said the value proposition of a cruise vacation was amazing.
“Nobody touches it from a value perspective. It’s a seamless experience,” he said. “We control – whether it’s the islands or the experience on the ship – we have a big advantage making it frictionless.”
Chidsey, who took over as president and CEO in February, said he was there to turn Norwegian Cruise Line Holdings around.
“I am a turnaround guy clearly. I spent time putting some insurance companies together,” he said. “I look at it as this is what I like to do. I think we can improve our execution.”
“For me it’s an exciting industry and I am looking forward to doing yet another turnaround.”
“As a board member you know just enough to be dangerous and tick management off. It’ll be fun to parachute down and get in the weeds.”
Liberty stressed that the industry had showed incredible resiliency and continued to see strong demand.
Onboard, Liberty said the company had embraced what he said was a more flexible work environment.
With AI potentially driving a large change in the workforce, Liberty downplayed concerns.
“There is a level of fear there will be a 20 percent unemployment rate and an Armageddon, versus we will evolve,” Liberty said.
Pierfrancesco Vago, executive chairman, MSC Group’s Cruise Division, said the industry had been first criticized on sustainability, but had flipped the script, showing off what it had done.
“We now need to do the same with what’s called overtourism,” he said.
Using Dubrovnik as an example, Vago said that by sitting down and talking to local authorities on how to control the flow of passengers, it had led to manageable numbers of cruise guests.
“We need to work with authorities to plan how to distribute (the guests),” Vago explained.
