by Brian Major
Last updated: 5:10 PM ET, Tue April 9, 2024
The cruise industry faces immediate challenges that include
an industry-wide goal of zero net carbon emissions by 2050. Yet the segments
success in attracting vacationers has skyrocketed to an unprecedented level,
said cruise line leaders gathered this week at the Seatrade Cruise Global
conference in Miami Beach.
For the industry and certainly for us, the demand
profile is unprecedented, said Josh Weinstein, Carnival Corp. & plcs CEO,
during the conferences State of the Industry discussion.
Our outlook for 2024 [includes] record yields, record
demand [and] record passengers carried, said Weinstein. And as amazing as
that is, our bookings for 2025 are better than they were at this point last
year for 2024.
Indeed, the Carnival chief said cruising has eclipsed its
post-pandemic resurgence. The concept of pent-up demand for cruising is gone,
said Weinstein. This is natural demand because we all provide amazing
experiences.
Weinstein added that the cruisings value versus land vacations
has increased significantly during the recent leisure travel boom.
The cruise experience versus what has happened in many,
many land-based alternatives is that the service levels today versus before 2020
are not close anymore, Weinstein said. It gives us a huge opportunity to really
excel and get that incremental demand.
We see the [cruise industrys] strength globally, said Pierfrancesco
Vago, executive chairman of MSC Cruises.
Cruise Bookings Rebound
[Bookings] are coming back in different parts of the
world, with the same logic [of] value for money and the experience we offer our
holidaymakers, he said.
Vago added that the expansion of U.S. homeports in the last several years has
also benefited the industry. Cruises are coming closer to home, and thats
also a facilitator for customers to come and try the experience, he said.
We have a lot of newcomers, and this is promising because
it looks like the numbers will be on the rise, and obviously the supply will
drive the demand, added Vago.
For the industry and certainly for us, the demand profile is unprecedented. C Josh Weinstein, Carnival Corp. & plc. (Photo by Brian Major)
The major cruise lines are showing their confidence in consumers
desire to cruise via new ship orders that have Carnival, Royal Caribbean, MSC
and Norwegian ordering a total of 34 ships collectively in the current decade.
Demand is incredibly robust, the onboard product is fantastic,
and guests are coming back with repeat rates at historically high levels, said
Harry Sommer, president and CEO of Norwegian Cruise Line Holdings which announced an order for eight new ships Monday.
This gives us an incredible optimism for the future,
Sommer said. We can continue to [build] larger, more efficient ships that not
only help our financial position but also help us deliver world-class experiences
to our guests.
Fuel Forecast
With future passenger growth on the upswing, cruise operators
are looking to tackle challenges led by the industrys stated goal of reaching
zero carbon emissions by 2050.
As seminar moderator Anne Kalosh noted, the cruise
industry has gone far in developing new technologies and practices to reduce greenhouse
gas emissions, but, now its down to the fuels."
Theres still a lot more opportunity for us to continue to
evolve all of the technologies that support our ships as well as the infrastructure
on land [including] shore power, said Jason Liberty, president and CEO of
Royal Caribbean Group and Cruise Lines International Association (CLIA)s chairman.
Fortunately, we have many, many parties here today that
help us accelerate ways to reduce the amount of fuel we burn as well as reduce
emissions. But thats only going to solve so much, said Liberty.
We need to make sure we have fuel sources that allow us
to be able to burn and get to a net zero position, which is the goal of the
industry, he said.
Added Liberty, We need to know where those fuel sources
are going to be, we need to know what theyre going to be, they need to be
available to us [and they need to be scalable] and they also need to be
affordable.
Liberty said that the process will take time. This is a
journey, he said. We need governmental support, we need the support of many
of our suppliers, we need the infrastructure to be in place and we need to know
where were skating to, he said.
With that clarity Im very confident not just in the
industry, but with the maritime cluster we have here today, that we will be
able to find a solution to get to a net zero position.
Cruise lines are additionally challenged to meet the
European Unions own goal of attaining carbon-neutral emissions by 2050, which
would apply to cruise operators in European ports.
The problem is [the European Union] is not doing it in
line with the rest of the world, said MSCs Vago. We dont have a global
approach to see how to de-carbonize industries [including] the maritime
industry.
However, Vago endorsed the European mandate as It will
be a good benchmark for the rest of the world to understand what is coming up.
It occurred to us how many regulations there that govern
the cruise industry, said Norwegians Sommer. If we were to focus on the goal
as opposed to mandating specific steps, we would reach that goal much easier
and in a much quicker process, he said.
We perhaps need to take a slightly longer-term approach
to this with governments, said Sommer, [to] partner with us to truly
accomplish our goal of decarbonization.
The environmental goals may impact cruise itineraries, said
Carnivals Weinstein. A cruise ship is like driving your car. If you go slower
and you go shorter distances, generally speaking, you use less fuel and you
emit less greenhouse gases, he said.
To some extent, that is a component of how we are going
to continue to reduce our emissions footprint. But ultimately, we are a business,
and sustainability is not just about environmental impact, added Weinstein.
The concept is about how do you get there in a way that
businesses can be sustained, he added. Everything we do has to be a balance.
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