As the sector faces a difficult wave season, Harry Kemble asks Royal Caribbean International and Norwegian Cruise Line to assess prospects for 2021 and beyond
It’s fair to say that the 2021 wave season is anything but normal compared with previous years.
An array of offers have been pushed by cruise lines across the market, but until the UK and US governments deem cruising to be safe again, it is difficult to generate the same levels of excitement that the trade is accustomed to at this time of the year.
During the pause in operations, cruise giants Royal Caribbean International and Norwegian Cruise Line have taken the opportunity to support cruise retailers by either overhauling trade-facing platforms or launching new ones.
In recent months, NCL has unveiled Norwegian Central, a trade portal with updated training platform NCL University; fly-cruise booking platform NCL Air; and incentive scheme NCL Freestyle Rewards.
Royal has introduced a Homeworkers’ Hub to help, in particular, the “influx” of experienced agents who have chosen to start their own businesses in recent months.
The line has also sought to ease the job of its key account managers by developing an app for them. Made available last week, the app allows key account managers to quickly find data – such as performance charts and future cruise credit reports – during agent meetings, which have generally been taking place online during the pandemic.
Wave booking season
Referring to business during this wave season, Ben Bouldin, Royal’s vice-president for the EMEA region, says: “We’re active and we’re in the market but we’re not seeing this as wave other than it’s January and that’s usually when wave happens. The spike will come later this year.”
Eamonn Ferrin, Norwegian Cruise Line’s vice-president and managing director for the UK and Ireland, is keen to reflect on how his team has grasped opportunities presented by the pandemic.
“Wave is clearly not a normal wave but we’ve been exceptionally busy,” he says. “We’ve improved our IT structures and got Norwegian Central, NCL Air and NCL Freestyle Rewards set up. We wanted to do those things before and, as it happens, we’ve achieved all three.”
Vaccine rollout impact on cruise
Both Bouldin and Ferrin – as with the rest of the sector – have one eye firmly on the ongoing vaccine rollout.
In September, the Healthy Sail Panel, created by the lines’ parent companies in response to the pandemic, published a 66-page report listing 74 detailed Covid protocols. Now, experts have been tasked with understanding how the vaccine will affect the industry’s push to resume operations.
Ferrin says NCL’s goal is to make cruise “stronger than ever”. He believes safe sailings, coupled with the vaccination rollout, are inspiring customers to book.
“Our customers believe that, because otherwise they would not be booking the levels that they are for 2022 and 2023,” he adds.
However, Bouldin points out that while the vaccine is crucial to the cruise industry’s future, Royal has been successfully operating reduced capacity sailings on Quantum of the Seas in Singapore since before the country’s vaccination programme began on December 30.
“Pre-vaccine [sailings] do come with a few limitations and requirements on the testing front and social distancing,” he says. “The vaccine is going to play a role, but we have not defined what that role is yet.”
2021 cruise outlook
A survey in December of 400 Mail Metro Media readers found one in six said the vaccine rollout makes them more likely to book a cruise, with one in three planning to sail this year.
Is this positive sentiment reflected in Royal and NCL bookings for 2021?
Bouldin says his team’s focus is on 2022, but reports “good demand” for this year, particularly for the fourth quarter. For the first time, Royal will be basing a ship, Grandeur of the Seas, in Barbados from December, with the UK expected to be a primary source market.
“That’s far enough in advance that people will think that we’re through the worst of this [pandemic] and hopefully a good chunk will be vaccinated by then,” says Bouldin, adding that trade feedback has been “excellent”.
Royal is determined to launch Quantum Ultra-class ship Odyssey of the Seas this year. The line suspended sailings until April 30, and in doing so effectively cancelled the ship’s planned mini-season out of Southampton earlier in April.
Admitting the announcement was “a blow”, Bouldin says: “It essentially means we push the plans back a bit. At the moment, the season now starts in Spain rather than Southampton.”
Due to obvious constraints, Ferrin says NCL is “not seeing the volumes for 2021 that we would normally see”. However, the line is reporting “huge growth” for 2022, 2023 and 2024.
“Sometimes we’re seeing triple-digit growth year on year,” he adds.
NCL has never had so many future sailings on sale.
Ferrin adds: “What we’re seeing that is more unusual is huge forward demand, which we’re exceptionally happy with.”
Cruise pricing picture
NCL and Royal report that pricing has remained strong in 2021. Bouldin is adamant that he will not be drawn into a price war with other lines in this year’s lates market.
“I’ve seen some very reduced pricing in the market, but that’s not a game I have any intention of getting involved in because I don’t think we need to,” he says. “We have one ship [Anthem of the Seas] ex-UK and it’s well-sold already.
“I don’t worry about a lates market as I would in previous years. Lates will be about higher prices and a race [to cater] for demand as opposed to people having to discount to fill.
Ferrin agrees the lates market could see a sales frenzy. He says: “If we’re seeing this huge demand for 2022, 2023 and 2024, and then you see huge late demand for 2021 in Q3, Q4, you’ll see huge volumes.”
Bouldin says: “The demand has got to be there and it will rebound quickly when cruising restarts.”