Preview 2014: Cruise

By Tom Stieghorst

A rendering of the Costa Diadema.It’s been five years since the cruise industry has enjoyed anything like a historically “normal” year.

Starting with the 2008 financial meltdown and continuing through last year’s setback with the Carnival Triumph fire, the headwinds have made profit growth a struggle.

But 2014 could prove to be the breakout year for cruise earnings.

Norwegian Cruise Line Holdings CEO Kevin Sheehan is predicting a 60% rise in earnings before items like interest and depreciation. A Wave season that doesn’t put the industry in an early hole would improve pricing power throughout the year, a boon for agents as well as suppliers.

To be sure, forecasts are more measured at Royal Caribbean Cruises Ltd., and Carnival Corp. isn’t expecting positive year-over-year price comparisons until the second half of 2014.

But if prices do rebound, several factors will be working to keep them moving upward in 2014.

One is the increasing value that suppliers are placing on the travel agent distribution channel. It is likely, for example, that following Carnival Cruise Lines’ Carnival Conversations program, more agents are motivated to sell those ships today than they were a year ago.

Norwegian recently debuted an “Ask Away” monthly video chat with its top sales executives, while Princess Cruises has unveiled a rash of changes in 2013 designed to make selling that line easier.

An energized agent force can only stimulate demand for cruising, which supports improved pricing.

Cruise lines are also being more disciplined about buying new ships, to keep pricing power from eroding. Carnival, for example, is restricting growth to two to three ships a year across its 10-brand fleet. New deliveries scheduled for 2014 include the Costa Diadema, effectively a replacement for the Costa Concordia, and the Regal Princess, a sister to this year’s Royal Princess.

Also taking a sister ship next year will be Norwegian Cruise Line, which is adding the Norwegian Getaway in late January as a Miami-based version of the Norwegian Breakaway.

The most anticipated ship of 2014, however, will be Royal Caribbean International’s Quantum of the Seas, which will debut in the fall in New York. It is a new class for Royal, its first since the two successful Oasis-class giants.

Quantum will include several “wow” elements such as simulated skydiving and a London Eye-style observation capsule.

Another innovation debuting in 2014 will be “virtual balconies,” which are floor-to-ceiling screens on the wall of interior cabins onto which exterior views are projected. The Navigator of the Seas will get some in February in drydock before they are introduced on the Quantum.

Other innovations in 2014 come in itinerary planning, such as the Oceania Cruises world cruise, which debuts at an unheard-of 180-day length.

Below deck, new backup generators and air scrubber devices are being installed on some vessels to make cruises safer and cleaner next year.

On the service side, Carnival Cruise Lines rolls out two new main dining room programs in 2014 that will emphasize American cuisine.

In communications, several lines are upgrading to provide faster Internet access, with the most dramatic speeds promised for the Oasis and Quantum of the Seas, which will access a network of lower-orbiting satellites starting next year.

But not everything is going high-tech. Printed brochures are back at Carnival Cruise Lines in 2014 for the first time in five years.

Next year will be Carnival Corp. CEO Arnold Donald’s first full year at the helm, following his surprise appointment in 2013. Meanwhile, Edie Bornstein takes over as president of Crystal Cruises, and Cunard Line has new leadership, as well.

Two big anniversaries will be celebrated in 2014: The pioneering Queen Mary 2 will be 10 years old next year, and the Panama Canal will turn 100, leading to more interest in canal transits.

Challenges for 2014 will include crowding in the Caribbean, which will get the large MSC Divina and Norwegian Getaway ships as year-round additions to the market, as well as more short itineraries from Princess Cruises.

In Asia, expansions by Princess into Japan and by Royal Caribbean and Costa into China should continue, although the rise in tensions between those two countries might prevent the most desirable itinerary options.

And in Europe, signs of a turnaround in demand in the second half of 2013 could mean a better year in 2014. Although a weak economy in Spain has drained the life from that country’s cruise industry, Pullmantur will further redeploy in 2014 to Latin America, where it appears to be finding a second wind.

Coming soon to a port near you

By Tom Stieghorst

*InsightNext year’s cruise ships have yet to arrive but, borrowing a page from the movie industry, cruise lines are starting to provide online trailers of their coming attractions.

Several of the industry’s most anticipated ships are being previewed in videos that can show agents and customers what they might be buying if they reserve a spot on the next newbuild.

Cruise lines have been producing these videos for a while, but they’re growing increasingly elaborate. They’re a great tool to build excitement for what is likely a premium sale.

According to a recent survey of Cruise Holidays agents, no ship is more anticipated than Royal Caribbean’s Quantum of the Seas, due to enter service next November from New York/New Jersey.*TomStieghorst

The ship will have lots of firsts, including the first skydiving simulator, the first bumper cars and a giant mechanical arm that will take occupants of a glass capsule up and over the side of the ship.

All are prominently displayed on Royal Caribbean’s website in an eight-minute video that includes a lot of sophisticated 3-D imagery of a ship that physically has yet to be created.

On hand to narrate is actress Kristin Chenoweth, the ship’s godmother, along with RCCL chairman Richard Fain, Royal Caribbean International President Adam Goldstein and actress Estelle Harris of “Seinfeld” fame, who is allowed to take a few playful digs at Fain in the skydiving segment.

At eight minutes, the video done by visual effects house Brewster Parsons, is distinctive, if a bit long for the attention span of the average cruise shopper. But it is entertaining, full of cameos from the likes of magicians Penn & Teller, and there’s a lot of new ground to cover to explain all of Quantum’s special features.

At 2 minutes, 18 seconds, the video for the Norwegian Getaway, due in February, is much easier to digest. It is fast-paced, with no voiceover, and starts with an amazing tracking shot of the Waterfront entertainment area on the ship. The video soundtrack is full of marimbas and timbales, as befits a Miami-based ship, and there are several shots that capture the NCL logo on the ship’s stack so there’s no doubt whose ship it is.

Regal Princess, the sister ship to 2013’s Royal Princess, is such a close sibling that the Princess Cruises video promotes both at once. The length comes in at a manageable five minutes, the pacing is measured, and the ship’s features are explained by a soothing and neutral feminine voice.

Even ships that won’t debut until 2015 have videos, including a newly minted one for P&O Cruises’ Britannia, featuring executives on its newbuild team, and another for Viking Cruises’ Viking Star, a true departure for the river cruise company, that is briskly described by a British-sounding male narrator.

So if you have a spare moment, check out next year’s ships today. It has never been easier.

Cruise Holidays survey: Quantum the most anticipated ship

By Tom Stieghorst

Quantum-NorthStarPod-Render.jpgCruise Holidays said Royal Caribbean International’s Quantum of the Seas is the most anticipated cruise ship due in 2014.

In a survey of 133 of its franchisees about trends in cruising next year, Cruise Holidays found that when asked which ship they are anticipating the most, the “overwhelming response” was Quantum.

Other cruise ships entering service in 2014 include the Costa Diadema, Regal Princess and Norwegian Getaway.

Cruise Holidays said that the Quantum, which debuts in November 2014, accounts for 20% of its 2015 bookings so far in 2015.

Quantum, the first in a new class of ships for Royal Caribbean, will carry 4,100 passengers and will sail year-round from Bayonne, N.J., on seven- to 12-day cruises to the Bahamas and the eastern and southern Caribbean.

The survey said the Caribbean continues to command the most bookings of any cruise region by a wide margin, with 54.8% of the total for next year. Europe as a whole remains second with 10.4%, with Alaska third at 9.1% and Bermuda next at 3.5%

River cruises were included for comparison in the list for the first time. They account for 5.7% of all Cruise Holidays bookings in 2014.