Cruise CEOs say ship renovations key to maximizing revenue
Enchantment of the Seas
FORT LAUDERDALE — The cruise industry will increasingly emphasize growth in revenue yields rather than the number of cabins and ships it is adding, according to the CEOs of its top companies.
Four chief executives spoke together on a panel at the annual Seatrade Cruise Global convention, held for the first time this year at the Broward County Convention Center.
“You’re going to see a more balanced approach to building new ships,” said Frank Del Rio, CEO of Norwegian Cruise Line Holdings. More dollars will flow toward maintaining the existing fleet at the highest level so that higher prices can be supported fleetwide, he said.
“We have no choice,” chimed in Arnold Donald, CEO of Carnival Corp. “The fastest we can grow is at about 6% a year, even with the largest ships. And there’s only so many shipyards.”
Donald said investors in any of the companies represented on the panel would not be satisfied with a 6% return on investment. So attention is turning to investing more in existing ships to bring up yields and to introduce innovations that customers will pay extra for.
In sheer numbers, Carnival’s fleet has already plateaued. Since mid-2011, Carnival Corp. has added only one net ship to its 101-ship fleet, according to a presentation by Giora Israel, Carnival’s senior vice president of global port and destination development. But in that timeframe, it has added 32,000 berths because bigger new ships are taking the place of smaller old ones.
Arnold pointed out that new ships on order are increasingly split between China and other markets, which means growth from North America could only be 2-3% a year if it had to depend solely on new capacity.
On another topic, the CEO panel agreed that cruises to Cuba, while of high interest, await approvals from the Cuban government. And they said the infrastructure to support cruise tourism is lacking for anything larger than mid-sized ships.
MSC Cruises, which is privately owned and headquartered in Geneva, is currently the only major cruise company sailing in Cuba. Pierfrancesco Vago, executive chairman of MSC Cruises, said that when its 2,150-passenger MSC Opera ship docks in Havana, the 275-meter ship (about 902 feet) overhangs the end of the pier by about 80 meters (about 262 feet).
As cruise lines search for ways to appeal to younger guests, one item in the toolbox is the app, that downloadable software that makes a smartphone into more than just a device to make calls.
By one estimate, the average smartphone user has 41 apps installed on his or her device, used for everything from calculating tips to forecasting weather or playing games. Now cruise passengers are finding room on their screens for apps from the cruise lines.
Within the past two years, most of the large cruise lines have rolled out at least one app for customers. They generally fall into two categories. The first provides precruise information to help customers research their trip and check out shore excursion or ship info.
The second category is designed to help passengers once they embark by enhancing the onboard experience.
While it seems like they’ve been around forever, apps only really took off in the summer of 2008 when Apple opened its App Store shortly after introducing the iPhone in 2007.
Last year, Apple CEO Tim Cook said that app downloads from the store had surpassed 100 billion since it opened.
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The rise of apps dovetailed with dramatically increased infrastructure spending by the cruise industry on Internet connectivity at sea and WiFi networks that enabled guests to use personal devices to access the Web onboard.
Because shipboard apps function by piggybacking on a WiFi network, it was only after onboard wireless services were upgraded and strengthened that they could reliably work.
Cruise lines offer their apps for free, and most are downloadable from the App Store for iPhones and iPads as well as from Google Play for Android-based devices. Some cruise lines charge a fee to use the app for chat communication, which is one of the most popular functions.
But unlike WiFi connectivity, which is an additional expense, apps are not seen by cruise lines as a profit generator. Rather, they are considered a service to help passengers make the onboard experience richer.
The Hub app can help Carnival Cruise Line passengers research their dining options while onboard as well as check in on any ship activities.
When Carnival Cruise Line was developing its shipboard app, called Carnival Hub, it boiled the mission down to answering passenger needs at the most basic level, said Gaby Gonzalez, Carnival’s vice president of guest technology and photo operations.
“If you look back at what the app was meant to solve, there were two main questions: ‘What can I do now?’ and ‘Where’s Sally?'” Gonzalez said. So Carnival paid close attention to functions that displayed daily activities on its ships and also provided person-to-person messaging.
Gonzalez said passengers have been pleased with the results, measured by positive reviews that Carnival Hub garnered in the app stores, with users rating it at 4.5 out of five stars. She said about a third of the passengers on ships outfitted for Hub use it.
The idea of the Hub [is] how do you maximize the fun of the cruise experience?” Gonzalez said. “How do you make being on a cruise better because you now have your gateway, your hub to that experience?”
Although it’s very functional, Carnival Hub is currently available on only four ships, the Breeze, Dream, Magic and Sunshine, although the line said the plan is for it to be available on all ships by the end of 2016. Royal Caribbean International’s Royal IQ app is offered only on its Quantum-class ships, and some lines don’t offer an app.
In general, small-ship cruise lines are less likely to invest in a shipboard app.
“If you look at our fleet, which is made up of smaller, more intimate ships and where a majority of them carry 700 passengers or less, it’s kind of hard to get lost while onboard,” said Jason Lasecki, spokesman for Regent Seven Seas Cruises and Oceania Cruises, neither of which offers an app.
The Royal Caribbean app, available on Quantum-class ships, displays events on the daily Cruise Compass.
One of the few lines to make its app available fleetwide is Princess Cruises, in part because Princess@Sea is a website accessible through a browser rather than a downloadable program. That approach made it easier to implement, and it is accessible on laptops, at terminals in the ship’s Internet cafe and for devices other than mobile phones and tablets.
Development of Princess@Sea started early in the winter of 2012 and was timed to launch with the debut of the Royal Princess in 2013, said Nate Craddock, the project lead for guest experience applications at Princess Cruises.
A look at how Princess@Sea functions demonstrates the variety of features that shipboard apps include. The landing page is mostly about events and schedules: times for movies, happy hours, contests and the like. There is some basic weather information for the day and a quartet of buttons at the bottom that lead to other pages with more information.
The events button, for example, takes passengers to a listing of all happenings during the cruise (events for the current day are displayed on the landing page). Users can touch or click on an event link to add it to a personalized agenda called My Cruise Planner.
An Internet button connects to the passenger’s Web account (using Princess@Sea itself does not incur Internet charges).
A Messenger button initiates the chat function. Each user of Princess@Sea has a unique identification number. Users who want to chat with each other exchange these numbers. Group chats are also possible.
The More button is a gateway to a variety of extra functions. Like most shipboard apps, Princess@Sea has a stateroom account page where passengers can view an itemized list of what they’ve spent.
Another page leads to information about bars, restaurants, lounges and the casino. For example, the Adagio Bar page lists hours, displays a menu, has a photo gallery and includes a descriptive paragraph.
A Map It button brings up a deck plan for any location being researched.
The More tab is also where passengers can go deep into the ship’s itinerary. Clicking on a port of call brings up arrival and departure info, a brief description and photos.
A page on Puerto Vallarta, Mexico, for example, includes a selection of restaurants that offer authentic local cuisine, fun facts and how to take part in a sea turtle protection program. There’s information on the port’s ties to Hollywood, tropical birds that are native to the area and a bar where guests can enter and exit on a burro. Another area has other information guests need about where they are docked, proper attire, nearby beaches, shopping, tipping customs, banks and post office locations and emergency numbers.
A general-information page contains a variety of useful items typically found in the loose-leaf binders on the desk of a passenger cabin, things like communications and stateroom services and safety and environmental reminders. There’s even a security section that lists phone numbers for the FBI, Coast Guard and a national sexual-assault hotline.
To help passengers who may not be digitally savvy, Princess has trained staff members who interact with guests to walk them through any problems they have with the app, Craddock said.
Princess guests can request a reference sheet from guest services or at the Internet cafe front desk. Cruise directors include a brief Princess@Sea how-to in the daily Wake show, and commercials for the app run during gaps in programming on the in-cabin TV system.
Although the Princess@Sea website has some features common to many cruise line apps, each line has its own approach. Here’s a look at what some other lines offer.
Carnival Cruise Line
In addition to person-to-person chat, which costs $5 per person, per voyage, Carnival Hub is popular with small groups because it enables joint chats.
“When people are traveling in groups of 20 or so, we actually prepopulate the contacts list that enables that connectivity,” Gonzalez said. “If you arrive together in a group of 20, you’ll already see in your contact list the 20 people.”
For 2016, Carnival is focusing on two things. The first is expanding Hub fleetwide; Gonzalez said her goal is to have that accomplished by the end of the year. The second is to add the ability for passengers to use the app to download and buy shipboard photos.
Celebrity Cruises focused its app on cruise planning rather than on listing onboard activities.
Celebrity Cruises
Celebrity has focused its Celebrity Destinations app on cruise planning rather than on shipboard activities. Its app offers videos and rich imagery of the ports Celebrity visits, itineraries and maps of Celebrity tours, profiles of the line’s shore excursions, interactive deck plans and other planning aids. Celebrity also has a separate Cruise Lingo app that translates useful phrases on a customer’s phone into a variety of languages.
Costa
The Italian line’s MyCostaMobile includes a 360-degree tour feature for each ship and offers free text messaging or phone service to connect with other passengers on the ship using a mobile device.
Crystal Cruises has the Storyteller as part of its app, enabling passengers to edit their photos.
Crystal Cruises
Crystal’s three offerings are not conventional shipboard apps. One, called the Storyteller, is a photo-editing app. Users store or share photos via Facebook or email and can create postcards from them. While using the app to edit photos is free, an Internet package is required to share photos in social media.
Crystal also has a media-player app for watching movies and Crystal-produced programming as well as enrichment lectures, while the PressReader by Newspaper Direct app lets users read U.S. and international newspapers for free while onboard.
Cunard
Carnival Corp.’s staunchly traditional Cunard Line has two mobile apps available in the App Store: one displays Cunard U.K. brochures, and the other houses the onboard magazines.
The Disney Navigator is available for use on every ship in the fleet. Among its features is a complimentary chat function. It also identifies where character interactions can be found onboard.
Disney Cruise Line
Along with Princess, Disney Cruise Line is one of the few lines where apps function fleetwide. Its Navigator is similar to Princess@Sea, plus it has times and locations for children’s character interactions, as well as a drink-of-the-day description for adults. Disney includes a complimentary chat function. The chat does not work on Disney’s Castaway Cay private island, but passengers can view maps of the Cay on the app.
Holland America Line
HAL has an app optimized for tablets that describes its Alaska cruise offerings. Users can explore both cruises and Land+Sea Journeys with a new level of detail, including an interactive map with destination details and excursion options as well as a sampling of the line’s Glacier Bay podcasts.
MSC Cruises’ app enables its passengers to book restaurants and shore excursions through its app along with keeping track of where the ship is heading.
MSC Cruises
Once onboard, guests can download the MSC Traveler app to “friend” and chat with other passengers in real time. The app also enables guests to book restaurant and shore excursions, view sea conditions and weather forecasts for ports of call, check out daily activities and special events, update their location and keep up to date on global news. The app is available on a limited number of ships including the MSC Divina, Magnifica and Preziosa.
Norwegian Cruise Line’s iConcierge app enables a guest to make calls to people off the ship, and an intraship chat is available for a fee. It’s available on 11 of the line’s 14 vessels.
Norwegian Cruise Line
The iConcierge app has functionality similar to the Princess@Sea website. An additional feature is the ability to make calls to and receive calls from people who are not on the ship, though additional charges apply on a per-minute basis. An intraship chat feature is priced at $7.95 per person, per voyage. The app is available on 11 of Norwegian’s 14 ships.
Royal Caribbean International
The debut of the Quantum of the Seas also marked the debut of the Royal IQ app.
One feature unique to Royal IQ is the ability to track luggage through the embarkation and debarkation processes, using radio-frequency identification tags. Royal’s app provides for ship-to-shore and shore-to-ship calls billed at a per-minute rate. The app is featured on Quantum-class ships, including the Anthem of the Seas.
• • •
Cruise ship apps continue to be a work in progress, with lines cooking up new functions and versions. A spokeswoman for Norwegian, for example, said last month the line was working on enhancements but as of press time was not ready to talk about it.
Princess said probable improvements to Princess@Sea include the ability to redeem prepurchased gifts, a preview function for prepurchased shore excursions, a ratings and reviews section for alternative dining rooms and more collaborative tools for groups and charters.
At Carnival, there’s plenty of excitement about the upcoming debut of photo downloading and purchases through the Carnival Hub app on the Carnival Vista, which will launch in May.
“You’ll be able to view the photos that the photographers took of you, and you can buy them right on the app,” Gonzalez said. “This is going to be a fully digital gallery, and you’ll be able to download it on your phone, buy it on your phone and walk away with it.”
Also on the radar at Carnival in the next few years, Gonzalez said, will be the ability to use the app to buy shore excursions. “We have a pretty rich road map ahead so that we can facilitate the cruise vacation even more,” she said.
Water wonder: CGI of MSC Meraviglia – ‘marvel’ in English – which comes into service in June 2017
Three next-generation vessels get an array of hi-tech innovations including an indoor promenade with an LED roof – two newest ships also get first art museums at sea.
It’s the question women having been asking for years when they try on clothes – ‘does my bum look big in this?’
But when passengers on four new next-generation super-smartships are in the on-board outfitters, technology will come to the rescue – with 3D magic mirrors that show whether that dress really is flattering or not.
MSC Cruises has just commissioned two more ships for its upcoming Vista class – to be constructed at the STX France shipyard in St Nazaire, Brittany, and designated “Meraviglia-Plus” – which, like the initial two ships in the Vista project, will feature industry-leading innovations on board, thanks mainly to a tie-up with South Korean technology titans Samsung.
Gianni Onorato, MSC’s chief executive, said the hi-tech marvels will include interactive digital mirrors in the on-board clothes shops which will show customers (including men of course!) a 3D view of how attire will look when they wear it.
Cool pool: CGI of the sun deck on MSC Meraviglia
Other smart innovations also include in-cabin interactive flat screen HDTVs that link to guests’ devices, 300 digital interactive signs in public areas, Near Field Contact geolocation of children, and hi-tech medical centres that can send scans to hospitals on shore for analysis.
But if all that technology gets too much, there’s a device-free digital detox room with no wi-fi or mobile signal.
In addition to modern human ingenuity, the two new Plus ships will also feature mankind’s artistic creativity with cruising’s first ever fine art museums at sea.
Mr Onorato said the museums would comprise classic and contemporary masterpieces from around the world – loaned from public institutions and private collections – and it should see works from leading establishments in Italy, France and the USA put on display as the ships cruise the oceans.
He added MSC had been approached by museums to try putting art and museum pieces on show at sea. ”Let’s see how it works,” he said, “we need a little courage to do something like this.’
Show stopper: CGI view of the main theatre on MSC Meravigliva
Entertainment on board the Vista ships will be showcased by exclusive performances from Cirque du Soleil staged in purpose-built dining and entertainment venues.
The two new 1,092ft Plus ships will have some of the largest passenger capacity in the world at up to 6,300 – just a hundred or so less than Royal Caribbean’s upcoming Harmony of the Seas – but with a more modest gross tonnage of 177,100 against Harmony’s 227,000. They will debut in 2019 and 2020, two years ahead of the original construction schedule when they were yet-to-be-confirmed options.
The announcement of two more ships on the order books was made by MSC executive chairman Pierfrancesco Vago at the Brittany STX yard where the line’s first two Vista class smartships, Meraviglia and Seaside, are being built.
He said: “The two Meraviglia-Plus vessels will be even larger and longer as well as richer in features and amenities, thus confirming MSC Cruises as the industry’s boldest innovator when it comes to ship design and experiences we create for our guests.”
The 167,600 ton, up to 5,714 passenger Meraviglia – lead ship of MSC’s Vista vessels – will come into service in June next year, followed by sister ship Seaside in December, and was undergoing the traditional, centuries-old coin ceremony where shipyard workers place a coin deep in the ship’s 1,039ft hull for good luck.
Steak and ships: CGI of the steakhouse restaurant on MSC Meravigliva
Besides magic mirrors in clothes shops, her revolutionary technology will see the creation of an 317ft long indoor promenade at the heart of the ship with an arched 5,400 sq ft LED roof which can project blue skies, migrating birds, starry skies or images of destinations (there will a 366ft long version on the two bigger Plus ships).
Seating around 600 but with ample room for more passengers to stroll around, the indoor prom will have shops, cafes such as a venue from US celebrity pastry chef Jean-Philippe Maury with his signature chocolate fountains, restaurants and an English pub, karaoke bar and 24hr TV studio.
Other facilities on board will see the installation of a full size bowling alley and Formula One racing car simulators.
Outside there’s a sleek, contemporary look for the pool areas and an array of slides in a water park.
Mocked up cabins were on view at STX too and they exuded the cool chic of a modern boutique hotel.
Chic sleep: mock-up of a cabin on MSC Meravigliva at the French shipyard
Sister ship Seaside will have many of the same on-board offerings but will not feature the indoor promenade. Instead she will get a more traditional outdoor wrapround walkway much lower down than on most other modern ships so passengers are nearer the water to get the feeling of being on a quayside at sea, with shops, bars and restaurants lining the area.
She will home port in Miami year round to discover the Unesco world heritage sites of Cuba and other Caribbean hotspots. Mr Onorato said she will be “the ship that follows the sun”.
Meraviglia will be christened at Le Havre on June 1, 2017 and spend her inaugural season in the Mediterranean, home porting in Marseille.
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