As the cruise industry stands on the merits of multiple quarters of financial success, cruise line executives see a lot of reason for even better days ahead.
Speaking at Seatrade Cruise Global conference in Miami, Florida, Royal Caribbean Group CEO Jason Liberty joined a panel of other CEOs during the keynote "State of the Global Cruise Industry" session to share insight into where cruising is going next.
The overarching theme for the keynote is cruise lines see many opportunities ahead.
Trends favoring taking a cruise
Mr. Liberty sees good times ahead for the cruise industry, thanks to secular and demographic trends that are favoring going on a cruise.
Thanks to a very healthy U.S. consumer, Mr. Liberty thinks so many data points are leaning in the direction of cruises.
"The appreciation for building memories with your friends and family coming out of Covid is at extraordinarily high levels of cruise."
In addition, he talked about the wealth transfer going on between generations, "Grandparents wanting to see that wealth transfer live, watching their kids and their grandkids experience that is also at all time highs."
He seemed to agree a lot with Carnival Corporation CEO Josh Weinstein's outlook on state of the cruise product, "we have evolved our product and our experiences to be at the very forefront of what our different customers and their different segments are looking to achieve."
One interesting statistic mentioned was there was 30.7 million people cruise passengers last year, and Mr. Liberty said about a third of them were brand new to a cruise ship.
"And you think about 10 million new people, coming in and will that number will grow each and every year. They are 4 or 5 times more likely to cruise again once they've had the experience."
Ambitions to do more private destinations
One question asked of Mr. Liberty was for an update on destination developments.
While he did not announce anything, he did allude to the idea that Royal Caribbean wants to offer more of those experiences, "I think for us, between the Royal Beach Club and Perfect Days, we have ambitions to do more of that."
"It's by far our highest rated experience that happens on land and that connected to other destination visits to other places is what's winning for us."
People that go on a cruise want a story
Mr. Liberty thinks people are going on a cruise not just for the typical vacation reasons, but to be able to share a humble brag when they get home.
"Our guests want to walk away with a story and they want to build a story," Mr. Liberty explained during the keynote.
"They're less focused on city tours. They're more focused on those kind of immersive culinary experiences that might happen on land, and then they want to build memories on the ships."
Pushing the experience with innovation
When the topic of innovation within the cruise industry came up, all eyes turned to Mr. Liberty because of the early wins on Icon of the Seas.
Royal Caribbean's first Icon Class ship has been a major innovation, setting a new standard for a family vacation and it was clear all the executives knew it too.
First and foremost, Royal Caribbean wants to ensure they are matching their customers' needs, "we all, I think, do is meeting our guests on the experiences that they're looking to deliver. Also meeting our guests when we think about in the dreaming and booking process, how do we take friction out of that customer experience, which I think is very important."
He also says while not necessarily super innovative, the progress with their land projects stands out, "you're seeing more immersiveness because the guests expectations of what their vacation experience should be like has broadened."
"If you want to compete with land, you want to take that share, and you need to have a product from end to end. You need to have an experience from dreaming to delivering that matches those expectations."
Nuclear power and the future of cruise ship fuels
How to make cruise ships more sustainable was a big topic of the keynote, with each executive talking about the challenges facing them. Supply of a next-gen fuel source seemed to be the overarching issue.
There are a number of options to help their cause, but cruise ships needs more options from suppliers. Shore power, marine bio fuels, and hydrogen are all options but severely lacking in availability.
Mr. Liberty pointed to the U.S. power grid as improving, but he wants more from it, "getting access to green sourcing, like nuclear as an example for shore power, we think is an important thing."
More importantly, he wants better access to cleaner fuel sources, "I think the key thing is bringing forward in the US to have those fuel sources, whether it's a green methanol or LNG, etc., available to us at the ports of call that we that we access and most of our bunkering takes place."
With reliable supply, then cruise ships can truly prepare for the future, "how do we make sure that when we come in and we fuel, we bunker our fuels, that those fuels are going to be available to us? And once we know that, then we can think about how do we retrofit our ships or what other actions can we be taking on the newer ships to get them ready to take on those alternative fuels into the future?"
Demand for China
When asked about future plans for China, Royal Caribbean Group has Spectrum of the Seas ready to go there now, with Anthem of the Seas going there in 2025.
Mr. Liberty said his company is "thoughtfully growing" in the Chinese market in order to return to their position there pre-2020.
"They are continuing to look for a Western experience that has the fine details of their Chinese culture and culinary etc. and we're all collectively very good at putting that together."
"We see very kind of prosperous future there, but we're going into it with a measured approach."
