'Sailing full' redefined in cruising's new reality

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Guests enjoying drinks at the Sugarcane Mojito Bar on the Norwegian Encore. Source: Norwegian Cruise Line

A bedrock operating principle of cruising is that sailing with 100% occupancy -- or as close as possible to 100% -- is the way a cruise line optimizes profitability. The only variable is finding the price that clears inventory.

But like so many things about cruising and travel, time-honored principles are being redefined as suppliers plan resumption of operations, taking health and sanitation concerns into account. And sailing full is likely to be one of them, at least for a time.

In an interview with Travel Weekly, Norwegian Cruise Holdings CEO Frank Del Rio acknowledged that “many of the tenets that make the cruise industry popular -- that the ship is your home, your transportation, your dining, your entertainment, that you travel around over a seven- or 10-day period, that you visit multiple ports -- all those things that were assets under normal conditions are now being challenged. And in many cases could be liabilities.”

Buffets, for example, long a staple of ships from contemporary to luxury, will “probably” be eliminated on NCLH ships, Del Rio said.

Regarding “sailing full,” he said that when NCLH ships begin operating again, “it’s our belief that demand will be hurt. Not everybody’s going to want to jump back in the water immediately. So, there’s going to be a natural social-distancing factor because there will be fewer people on the ship. 

“But I think two things are going to happen,” he continued. “Over time, demand will build as people regain confidence that cruising is safe. And there will be scientific breakthroughs: a vaccine, therapeutics, more efficient, faster, cheaper testing, or herd immunity. Those two factors will meet and, sometime in the future  --  it could be at the end of the year, maybe a little bit longer -- demand for cruising will return to normal or near normal levels.”

Before sailing resumes, however, Del Rio said no effort will be spared to ensure that vessels are safe. NCLH is working with Dr. Scott Gottlieb, former Food and Drug Administration commissioner, to establish best practices and protocols and assess the viability and practicality of implementing new technologies. “Dr. Gottlieb assures me that there are myriad new technologies, especially on the testing side, which will be just around the corner. Testing will be ubiquitous.”

As understanding of the virus improves and the world gets closer to a vaccine, onboard practices will evolve, Del Rio believes. “Many of the protocols that we’re living with today -- social distancing, masks, repeatedly washing hands -- will be lessened. As we learn, as we test, as we see the results onboard when we actually start cruising, we can roll back some of those protocols.”

But until then, he said, “we’re throwing the kitchen sink at it. We all want safe, healthy environments and need to rebuild trust. This is not, ‘let’s do the minimum amount required to get by’ or to get the green light from the CDC. Quite the contrary. I want to be able to look my mother in the eye, my kids in the eye, my grandkids in the eye and say, ‘You are safer going on a Norwegian Cruise Line Holdings vessel then you are staying in your community.’”

From a marketing perspective, Del Rio believes NCLH will be able to leverage the age of its fleet to promote confidence that, structurally, its ships promote a healthier environment. “Our ships are, on average, about 10 years old. Our competitors’, on average, are older than that. That means we have more balcony cabins and suites, and that means more fresh air in cabins. It’s a competitive advantage that will serve us even more than in normal times.”

Del Rio also believes he has a reputational advantage because NCLH ships were largely out of the spotlight when outbreaks on other lines were in the news. When marketing fully resumes, he plans to press that advantage. 

“We’re very fortunate that our three brands enjoy very high repeat guests, so we’re going to target first and foremost our travel agent partners and their clients, particular repeaters,” he said. “And the second group that will come onboard will be those who might have cruised on another brand but who will now prefer to cruise on our brands, partly because of our demonstrated, stellar results during the pandemic. We had just a handful of cases on board compared to others who had thousands. That’s not going to be lost on the consumer, and it’s certainly not lost on the travel agents.”

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