‘We’re competing against resort packages’

Shaw: increasingly looking for operations to destination ports in the Middle East

WHILE the US remains the mainstay of the cruise market, there is a strong potential markets in Europe and Asia, and it is here that business could boom in the next few years, says a senior official of Royal Caribbean International.

Robin Shaw, managing director for the UK and Ireland with responsibility for EMEA (Europe, Middle East and Africa), said cruise liners had grown bigger in dimension, but the focus was not on competing with similar ships but with resort-based foreign packages.
Shaw also noted that families were now a big part of the cruise market, a departure from the traditional notion that sailing was the pastime of elderly folk. Consequently, onboard attractions are now being designed to suit the tastes of passengers of all ages.
Royal Caribbean has 20 ships, with two under construction, including the innovative Navigator of the Seas, and one on order. It has laid out elaborate programmes for cruises out of Southampton, for destinations in the Mediterranean and Northern Europe. These trips are ideal for tourists from the Middle East and Asia, who love to holiday in Europe. In the Middle East, Royal Caribbean is the market leader, and wants to increase opportunities for travellers from the region to sample cruises beyond their shores. It is also looking at the viability of Middle East destination ports. 
Excerpts from a conversation with TTN:

What prospects do you see for the international cruise industry?
Globally, there are about 12 million individual cruise trips, of which nine million are out of America, leaving just over three million in the rest of the world. It gives you an idea about where the opportunities lie. The US has been enjoying single-digit growth. The real expansion for growth will come from markets outside North America in 2006.  A 17 per cent growth is expected in the UK, the second largest market outside the US. British travellers mainly cruise within homeports and to European ports.

Where do you see competition for cruise liners?
With a ship like the Freedom of the Seas with attractions such as surfing, the H2O zone for kids and rock climbing, we’re not competing with traditional cruises, but against foreign packages that are resort-based. Currently, in the UK, one in 20 foreign packages is a cruise. We can only get to two in 20 by competing head-on with resort packages.

How is the industry adapting to changing trends?
The expectations of cruise passengers are changing, and accordingly there are more attractions and more onboard facilities along with destinations – everything from better fitness facilities to spas and specialised restaurants. Families are becoming a big market. We’re building bigger ships because customers say they want to have different activities on board – and this allows us to give what are guests really want. 

What challenges and threats do you face?
One of the threats we face is terrorist activity. We implement the most sophisticated anti-terrorist proce-dures, some systems we have on board are confidential.
Market-wise, the challenge is converting to our potential. We are working at overcoming myths such as ‘cruises are just for old people’ and ‘there’s nothing much to do onboard.’ When we get them to experience our cruises we consistently hear that they have exceeded expectations compared to other land-based holidays, not just cruise lines. We have found that 86 per cent who cruise will cruise with you again.

Do you see a downside to the cruise business?
I don’t think there’s a downside. That becomes clear when, for example, you ask yourself, ‘Do I want to take a two-week stay in a hotel in one location or would I really take a two-week holiday with 10 or 11 destinations along with facilities on board?’
How do you see the cruise market shaping up in the short term – three years from now – and over the longer term, say ten years from now?
In the next three years, there’s going to be a major development – outside of North America, which will continue to be the most important market. The emerging markets in the UK and Europe will make great strides. You can see that not only in the Royal Caribbean but also in other lines. There will be 5 or 6 new ships coming to the Mediterranean.
In the next seven to 10 years, we’ll be looking increasingly to the Asian and Australian markets. There will be two opportunities – one in terms of starting more exciting cruises and the other in terms of adding destinations. The Asian market is becoming more and more important. The biggest factor as far as we can see is that we don’t see any barriers.  In the world in which we are, we are blessed with water (for sailing). When we get the markets, we’ll see the momentum and we’d like to be stronger.

What are your thoughts on the Middle East market?
We certainly see a very large potential in the Middle East. Royal Caribbean has a very good share – we’re the market leader in the region. We have been representing Royal Caribbean in these markets for over 12 years now and have had year-on-year increases in healthy double-digit percentages.
We’re looking more and more for operations in destination ports in the region including Dubai, which has become an important place. But safety will always be our number one priority.

Cruise talking by Salvador Almeida