Johanna Jainchill
Johanna Jainchill

Before the pandemic became the only news anyone talked about, there was a lot of industry buzz around the introduction of two powerhouse travel names to the cruise sector: Ritz-Carlton and Virgin.

One of those brands, Virgin Voyages, whose scheduled debut from the U.S. last spring was scrapped due to the pandemic, will finally launch its first ship, the Scarlet Lady, from Miami this week. The Ritz-Carlton Yacht Collection's debut has been pushed to 2022 after multiple setbacks in the construction of its first ship, the Evrima.

But heads of the three largest cruise companies said last week that they are not worried about the potential competition such names bring.

During the State of the Industry panel at the Seatrade Cruise Global conference, when asked if Virgin in particular was a concern, Royal Caribbean Group CEO Richard Fain, said that it would, in fact, help brands like Royal Caribbean.

"New players are a benefit to us because they attract attention," he said. Pointing to Disney Cruise Line's entry into cruising in 1998, Fain said that he had been asked whether such a powerful brand name would take away Royal's customers.

Instead, he said, Disney Cruise Line "added 2% supply in our industry, and they added 10% to the demand."

"We don't compete with each other as much as we compete with all the other activities that compete for our dollar," Fain said. "Whether it's a hotel or a resort or travel somewhere else.... When Disney came into it, it added an imprimatur: Here's one of the most successful tourism companies in the world and they're coming into [cruise]."

Fain added that he welcomed Virgin, and if Royal gets ideas from Virgin Voyages, "that's positive too."

"The important thing is that they're adding more to the demand than to the supply," he said. "All of this is moving toward our ability to compete with our real competition."

Carnival Corp. CEO Arnold Donald reminded the audience that the cruise industry is capacity-constrained: That a tiny fraction of the half-billion annual vacationers in the world take cruises, and that "there is plenty of room for all of us to grow." He also pointed out the significant barriers to entry in starting a cruise line.

"A company can't walk in and build 100 ships overnight," Donald said. "The shipyards aren't there to do that."

When asked what advice he would give Virgin Group founder Richard Branson on entering cruising, Donald said "to listen."

"Listen to your perspective guests and listen to the travel agent professionals that you're working with," he said. "If you listen, your guests will tell you what they want and what they need. If you listen carefully to the people who have been at this  along time -- the travel agent professionals -- they'll guide you as well."


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