With the announcement on March 20 that Norwegian Cruise Line Holdings Ltd. President and Chief Executive Officer Frank Del Rio would be retiring effective June 30, three of the four major cruise companies traditionally participating in the Seatrade State of the Industry keynote are now headed by a “new guard.”
Richard Fain retired as Royal Caribbean Group CEO in January 2022 after 33 years at the helm; and was succeeded by former CFO Jason Liberty, 46. Arnold Donald retired as president and CEO of Carnival Corp., a position he held since 2013, and was replaced by COO Josh Weinstein, 48.
Del Rio, who is also stepping back from NCL’s Board of Directors, will serve as a consultant, staying on as a senior advisor to the Board through 2025. The company named Harry J. Sommer, 55, who has been chief executive of Norwegian Cruise Line since 2020, as its new CEO effective July 1. Del Rio spent three decades in the cruise business and has led the company since 2015.
Only Pierfrancesco Vago, Executive Chairman, Cruise Division, of privately-owned MSC Group (in addition to his position as Global Chair of Cruise Lines International Association) will remain of the “old guard.”
In addition to Del Rio and Vago, the 2023 Seatrade State of the Industry panel included keynote panel moderator and BBC World News Presenter & Anchor, Lucy Hockings, RCL’s Jason Liberty, Carnival Corp.’s Josh Weinstein and Kelly Craighead, President & CEO, Cruise Lines International Association.
“This was the perfect time to step down,” said Del Rio in response to the question of why now? “The industry is ready and the future is bright. With the company solidly positioned for 2023 and beyond, I am confident that now is the right time to pass the baton to Harry.”
“We have just completed the world’s largest start-up in history,” said Carnival’s Weinstein, referring to the restart after the unprecedented lock-down of the cruise industry in response to the COVID-19 pandemic. “Now we have to get back to profitability and focus on the guest experience, which is something that we do really well,” he added.
“It’s so great to be making money again,” quipped Liberty, whose Royal Caribbean and Celebrity brands are delivering a record year.
Although much of the morning’s discussion centered on the quest for net-zero emissions and cleaner sustainable fuels, Del Rio argued that the industry was in danger of losing sight of the customer.
“We will all do whatever the science allows us to do,” he said. “But the purpose of the cruise industry is to provide great holidays for the customer.”
MSC’s Vago, who stressed that his company takes a long-term vision, says that cruising is just a tiny sliver of the maritime industry, but it is leading the way in decarbonization efforts.
“We lead the industry in innovation and we are creating the demand for sustainability,” he argued. But cruising will not reach its net-zero goals until biofuels are available, he said.
“Available, affordable and scalable,” added Liberty. “And we need to have our ships prepared to take on the alternative energy as it becomes available.”
Do cruisers care?
Moderator Lucy Hockings of BBC World News queried the panel on whether these sustainability efforts might attract millennials and younger generations.
“Everybody cares about sustainability to some degree but are they willing to pay for it?” said Del Rio, who thinks that the cruise industry is not charging enough for what it delivers.
Pricing and value
Weinstein pointed out that cruises are 25% to 50% cheaper than a land-based vacation, but agreed that the industry is not explaining this value strongly enough. “We need to do a better job talking about the value that we offer.”
Vago added that much of the public sometimes doesn’t know what the cruise industry is doing about sustainability and responsible tourism. The “big ship” in the harbor is an easy target for many things that go wrong.
“We need to do a better job when telling our story,” he stressed.
CLIA’s Craighead ended the discussion on a positive note: “Cruising is sexy and sustainable and offers something for everyone,” she said.