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Royal Caribbean, MSC and Carnival Corp. talk about the future of Caribbean...

Royal Caribbean, MSC and Carnival Corp. talk about the future of Caribbean cruising

Wednesday, July 22, 2020

TORONTO — Rick Sasso doesn’t mince words when describing the impact of COVID-19 on the cruise industry and the world at large. “I say it’s been a medical catastrophe, logistical nightmare and financial Armageddon.”

But Sasso, who is now MSC Cruises’ chairman, North America and a cruise industry veteran with more than 40 years of experience, is also unfailing in his optimism for cruising’s prospects.

“I call this ‘the new abnormal’,” says Sasso. “And adversity does bring some seeds of opportunity. We’ve had three to four months of no income, no revenue streams. Fortunately we’ve also had decades of incredible growth. Yes, this is a profound interruption of that success. But we will come out of it. We won’t start cruising until we know it’s healthy. But we will find a way to get back to the profitable years.”

Sasso spoke at this morning’s CTO Facebook Live session, as part of a cruise executive forum that also included Marie McKenzie, VP Caribbean Government Relations for Carnival Corporation, and Russell Benford, VP Government Relations Americas for Royal Caribbean.

The forum, dubbed ‘Riding the Storm: A Discussion on the Role of Cruise Lines in Caribbean Travel in Light of COVID-19’, was hosted by the CTO’s Communications Specialist, Johnson JohnRose.

 THE IMPACT ON CRUISING

The forum’s speakers were frank about the pandemic’s impact on their operations. “It’s been truly challenging,” said Carnival Corporation’s McKenzie. “We have taken a pretty significant hit. We’re earning absolutely no revenue at this time.”

But such is the power of cruising, and the loyalty of cruise fans (and travel agents), that even without marketing “we are still seeing demand,” she adds.

McKenzie noted that Carnival Corp. recently announced it will retire 13 of its ships. “In a typical year we might retire two ships. We looked at that and thought, do we accelerate that.”

Carnival Corp. is also scaling back its new build schedule, from nine new ships, to five, through the end of 2021.

Says McKenzie: “Carnival Corporation has a global footprint, and we’re looking at the whole picture. As an industry we’re going to have to build consumer confidence again. And we want to make sure the ships we have out there support the demand.”

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The bright spot for cruising so far is future demand. “Our sales data shows our consumers really want to get back on our ships,” says Royal Caribbean’s Benford.

Like Carnival Corp., the Royal Caribbean Group has been using this time to look at all aspects of its operations, and just this week announced the completion of its acquisition of Silversea. The group has also teamed with NCLH to create the Healthy Sail Panel, looking at health and safety protocols that could apply across the industry. Documents generated by the Healthy Sail Panel will be open source, says Benford.

Getting repeat cruisers back on the ships won’t be the challenge, says Sasso. “It’s the first-time cruisers, they may be the most difficult to re-engage. Twenty years ago [cruise vacations] were a side thought. Now we have become mainstream. [Long-time cruisers] are going to be the least affected by this.”

“WILL A RESORT BE ABLE TO DO WHAT WE CAN DO? NO WAY”

The cruise industry is under intense scrutiny and the CDC last week extended its No Sail Order until at least Sept. 30.

But in a refreshing take on cruising’s prospects, Sasso says the controlled environment onboard a cruise ship will help, not hinder, the ships in a post-pandemic world.

When the ships are sailing again, “I truly believe we’re going to be able to show people what we’ve done [in terms of health and safety protocols], and how it’s going to work, and why it’s more extensive than any other venue,” he said. “More extensive than Disney World, or a 10-hour flight, or even sitting in a movie theatre. I’m not criticizing them, they all have their challenges, just like us. But we control that ship environment. There’s no way other venues will be able to mimic what cruise ships will be able to do. Will a resort be able to do what we can do? No way. I think we’ll be able to do this better than any other entity. And people will say ‘I’m going back to cruising’.”

Says McKenzie: “Whatever the requirements are, we will adhere to them. If masks are required on ships, we will wear masks on our ships.”

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GETTING PROTOCOLS ALIGNED

The cruise lines are all in contact with Caribbean destinations, working with each island’s government to find solutions so that when the No Sail Order is lifted, the cruise companies and the destinations are ready to go.

“Everyone is grappling with decisions between public health and the economy,” says Royal Caribbean’s Benford. “Those are very difficult and important discussions to have right now. Everyone needs to come up with a healthy way of doing business.”

Benford added: “We will come back when the destination partners are ready for us to come back.” That could mean itinerary changes, depending on which islands are ready and willing to receive cruise ships, he noted.

McKenzie hinted that a single protocol across all Caribbean islands, within reason, would help streamline the process, but she acknowledged the challenges with that. “If the requirements for entry vary significantly, that could be a challenge for us, because we market sailings as a complete itinerary,” she said. “To the extent that alignment is possible, that would be helpful.”

She added: “Everyone is interested in the ships returning. Everyone just wants to make sure everything is safe, and with a mutual understanding of the protocols.”

There is an end to this, even if no one knows when that end will come. “We just need to get through this part,” said Sasso. “There is a future part that is very, very bright.”

Kathryn Folliott

Editor at Travelweek
Kathryn is Editor at Travelweek and has worked for the company since 1995. She has travelled to more than 50 countries and counts Hong Kong, Jerusalem, the Swiss Alps and the Galapagos Islands among her favourite destinations.
Kathryn Folliott
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