In the second of two parts of a wide-ranging interview with Travel Weekly editor in chief Arnie Weissmann, Norwegian Cruise Line Holdings CEO Frank Del Rio talked about relaunching operations and the importance of travel advisors in the cruise industry's recovery. Part 1: Del Rio on closing a $2.4 billion round in tough times.
Remarking that the Covid-19 crisis has put travel advisors under "tremendous stress," Norwegian Cruise Line Holdings CEO Frank Del Rio said he speaks with at least two or three agents every day.
"We believe in a strong agency distribution system," Del Rio said. "Before the pandemic, our company had the highest yield in the industry, which meant that travel agents were earning the most by selling our three brands [Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises].
"I know what they're going through, and we've got to be able to do the things we need to do to make sure they survive. The cruise industry without travel agents would be like pancakes without maple syrup. It just doesn't work.
"Yesterday, I got an email from a travel agent who I'm very close to, and she says, 'Frank, I've got dozens of people who want to book -- when are you going to reopen?'
"So, I picked up the phone and I called Jan [Fishbein, of Cruzunlimited]. Jan is in her early 80s. She has been a travel agent for the last 30 years. I know Jan well because she was the first travel agent to make a booking in 2003 when we opened Oceania.
"I called her and the first question I asked was, 'Jan, how old are these customers that you claim want to cruise?' She said, 'Frank, they're my normal customers, they're senior citizens, they're in their 70s.' I go, 'Really, Jan? And they want to cruise?' 'Yeah. Why not?'
"I said, 'Where do they want to cruise?' 'Well, they want to cruise in August and September; some want to go in the Caribbean, some want to go to Alaska, there's a few that want to go through the Panama Canal.'
"She's pushing me -- 'When are you going to open? When are you going to open?' -- and I say, 'Jan, I'm working on it! I'm working on it! It's not just up to me.'
"But it gave me such encouragement. When you combine those types of conversations with the numbers that we're seeing, if that doesn't give you reason to have hope and be encouraged, I don't know what does."
The numbers that Del Rio is seeing that give him encouragement go backward and forward in time, and reflect, he believes, strong pent-up demand.
"2021 bookings are only slightly behind where 2020 bookings were a year ago," he said. "Prior to coronavirus, 2020 was going to be, by far, the best year ever. And now, with travel agents not working at full strength, with our sales and marketing teams shut down, with the terrible news cycle that we've gone through, we can still say that we're only slightly behind, and at modest reduction -- mid-single digits -- in price. This is a testimony to the resiliency of the customer and the efforts of the travel agents to preserve those customers."
And when Del Rio's longtime travel agent friend Jan Fishbein gets her wish and sailing resumes, Del Rio also plans a gradual resumption, but with a different approach from that of Carnival Corp., which has announced an Aug. 1 relaunch for Carnival Cruise Line.
"We're not looking at it like that at all," Del Rio said. "We're looking at a gradual start; we're not certain when that date is, because everything depends on the [Centers for Disease Control and Prevention] lifting the no-sail order. Whenever we do start, we'll begin with a handful of ships across the three brands. So, let's say in month one, we open up with five ships; it could be three Norwegian, one Oceania and one Regent. I don't understand the concept of how one brand could be completely open and multiple brands can be completely closed. That's mind-boggling to me. We will start across all three brands, and whenever month two is, we'll bring alongside another four, five, six ships. We think it will take roughly six months from whenever we start until when all 28 ships across the three brands are back in full service."
Del Rio said he was unconcerned that some ports might not be welcoming visitors when sailing resumes. "We visit over 500 ports around the world. And cruise lines put forth their itineraries more than two years in advance. Today, we're selling itineraries through the fall of 2022, and we don't know at this point which ports are going to be open, which ports are going to be closed. I'm not going to prejudge changing itineraries. We'll have to play it by ear; it may be that when we open a certain itinerary, a port or two on that itinerary may not be operational and we'll have to make changes. We'll go to another port in the neighborhood. We have flexibility because, especially in Europe, it's a condensed geography. There's always an alternative port to go to nearby. The good news is we're flexible, we're nimble, and ships have propellers and rudders. We can move them around as necessary."