State of the Industry: Cruise leaders outline competing visions

In with the old: Seatrade name returns

Before the start of the State of the Industry panel at
Cruise Shipping Miami, Andy Williams, group director at UBM, which produces the
show, said that starting next year it would revive the former name for its
cruise events, Seatrade.

The convention next year will be called Seatrade Cruise
Global. Because of a remodeling of the Miami Beach Convention Center, the event
is scheduled to be held for the next three years at the Broward County
Convention Center in Fort Lauderdale.

About 11,000 people are attending this year’s four-day convention.

MIAMI BEACH —  Four
cruise leaders, speaking at the Cruise Shipping Miami conference here, offered
varied visions of what the industry needs to do to thrive in coming years.

The heads of Royal Caribbean Cruises Ltd., Carnival Corp.,
MSC Cruises and Norwegian Cruise Line Holdings opened the industry’s premier
annual event.

Royal Caribbean Chairman and CEO Richard Fain returned
several times to the idea that the industry has been in a “deflationary period”
that needs to end to avoid a shakeout.

“My focus is on demand growth,” Fain said. “It’s such an
opportunity for us. The value we offer is so much better than any other
competitive vacation you can name. And yet it’s cheaper. That isn’t sustainable
over the long term.”

Carnival Corp. CEO Arnold Donald put the emphasis on
execution, saying as he often does that exceeding customer expectations is the
key to higher prices and higher profits.

“That’s all we have to do is figure out what the guest wants
and give it to them,” Donald said.

Frank Del Rio, a veteran cruise executive newly appointed to
be president and CEO of Norwegian, said that itineraries are the single largest
driver of demand and company profits.

“I personally write the itineraries for each of my 21
ships,” Del Rio said. “I think it’s way too important to delegate.”

Pierfrancesco Vago, executive chairman of MSC Cruises,
offered a view of the industry through a European lens. While others on the
panel hedged a bit on whether they were ready to go to Cuba, Vago was
unabashed. “I’m a European, I have no embargo. I’m already there,” he said.

“I write the itineraries for each of my 21 ships. I think it’s way too important to delegate.” — Norwegian Cruise Line CEO Frank Del Rio

Fain suggested the different viewpoints belie a common
misconception that all cruise lines are the same.

“There is such a view and it is so wrong that we’re all
clones of each other,” Fain said. “We’re so different. We do go at these things
differently. We have different approaches to infrastructure, we have different
approaches to the style of cruising,” he said.