OPINION / TOURISM

HOW THE SINKING CRUISE INDUSTRY CAN STAY AFLOAT AMIDST THE STIGMA CHALLENGE

The COVID-19 pandemic has upended all sectors of the travel industry and the cruise sector has suffered the worst two month span any industry could face, and it’s likely not over yet. Cruise ships have been branded “floating petri dishes” and “incubators for pathogens” and become a testament to the viciousness of the coronavirus crisis. Dozens of fatalities have been linked to cruise ships, with passengers and crew dying while at sea and after disembarking. More than 6000 passengers are still onboard ships that are unable to dock as governments block disembarkation, fearing it will spread the disease. Ports have denied vessels entry, Governments have launched criminal investigations, travellers have cancelled trips and most cruise companies in the world have suspended operations. Even as ships will be allowed to sail again, a “No Sail Order” is etched in the minds of customers and questions have been raised about their very raison d’être. It is time for cruise industry to introspect and reinvent itself for the new world post Covid..

RE-REGISTER IN HOME SOIL

Even as all cruise companies are struggling financially, they have been excluded from all Government bail outs and instead are facing backlash from society. The recent exclusion of Cruise Liners from the $2 trillion stimulus package in US is a great example. This is because most Cruise Liners are considered

By Aradhana Khowala

CEO & Founder, Aptamind Partners

tax dodgers as they fly under foreign flags to avoid taxes and wages and regulations that US and other western economies demand (federal income tax of 21 percent in US). Carnival Corporation is incorporated in Panama, Royal Caribbean is incorporated in Liberia, and Norwegian Cruise Lines is in Bermuda. While the importance of the cruise-ship industry for tourism cannot be understated, in times of crisis wider public want to only reward organisations that have contributed to the local economy. Cruise Liners should consider relocating and redomiciling back to their sponsor country so that they can become one with the society. Cruise Lines order a lot of goods in the host and visitor destinations, supports around 1.1 million jobs worldwide, with about 421,000 of those in America and it would be such a pity to let the industry suffer any more in future.

DELIVER ON ESG AND ENCOURAGE MILLENIALS AS A NEW MARKET

Historically the baby boomers and 60+ have been the most loyal

cruise customer. Once the outbreak recedes and cruises resume, they will not come back to Cruising very quickly as they remain vulnerable to any further waves of the disease. The industry needs to actively target the millennial traveller as the important “new-to-cruise” segment.

The millennials care more about meaning, experience, community, culture and are way more passionate about ESG. These travellers have elevated expectations for transparency around safety both for personal health as well as the environment health. Incorporating an active lifestyle including sports while onboard and breaking the wrong perception that it is all about queuing up for the unlimited cake can appeal to the younger cruisers. Also, cruise leaders need to communicate the company’s sustainability responsibilities and plans proactively to convince these travellers that cruising can be healthy as well as climate friendly. Communicating this now and consistently into the future is especially important is not born into the cult of cruise loyalists.

Unsustainable paths are no longer an option for any sector especially the Cruise Liners. It matters for the traveller, for the future and society. One of strongest arguments against providing federal support for the cruise industry was because of its chequered past with environmental issues. To be viable for the long term, Cruise liners need to dramatically change how they operate in the post Covid future. This would also mean diverting the funding to reduce carbon emissions and air pollution with new fossil fuel-burning ships as well as investing in zero-emission fuels as against simply spend billions on larger ships. Though Cruise Liners have focussed more on environmental, social, and corporate governance recently for a post-COVID rebound they need to commit to an action and tie it to a metric. Making things measurable forces efficiency by exposing actions that really don’t drive impact.

REDESIGN SPACE - BIG IS NOT ALWAYS BEAUTIFUL

The world is now very scared of how easily deadly infectious diseases spread in enclosed spaces. Cruise ships have historically been synonymous with high density of people in a small space. Additionally, there are queues for buffet, for entertainment, activities, shows and to get on and off at every port. Even when the immediate crisis is over, some form of social-distancing measures will stay in place and the industry will need to rethink design and space planning with health & hygiene up, front and centre. If that means larger cabins, fresh air or empty cabins between occupied ones remains to be seen but the current configuration is crying out for change. And the consumer would be willing to pay for this little extra.

CONCLUSION

While there has been no shortage of negative attention the Cruise Liners have received for its handling of the crisis, the worst has been the branding it has received that it as a non-essential industry. The unprecedented scale of coronavirus is something none of us have seen

35

before and the Cruise industry is certainly one of the most “at risk”. However, prior to the current pandemic, the cruise industry was one of the fastest growing segments of tourism. Many destination business models were under review and improvements in infrastructure and on the sustainability and climate friendliness of the sector were being carried out. The longer Covid-19 dominates the news headlines and the longer the ships are forced to remain idled the longer the industry will take to regain its buoyancy and face the “stigma” challenge that could last for a while even after Covid-19 passes. When the travel industry returns to the “new normal,” instilling passenger confidence from a health safety perspective will be key to calming the anxieties about setting sail soon again. This slowdown is a great time to hit the reboot button for the industry and all its stakeholders to rethink the industry dynamics, reinvent themselves and find a solution that addresses the many fears and concerns of their customers, shareholders, employees, host ports and destinations. Cruising will survive but it needs fundamental changes, and one should never let a crisis go waste.