By
Susan Parker |
This article was first published in the Spring/Summer 2017 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed
Facing a year almost free of newbuild deliveries, Adam Goldstein, president and COO of Royal Caribbean Cruises Ltd. (RCCL), has new top priorities. “I’ll be focused on generating fantastic experiences, building up the Asia and general new-to-cruise markets, and putting more effort into the digital experience,” he says. “From a corporate standpoint, it is a year of double-digit in terms of the financial community so we are very determined to pursue financial goals as well.”
RCCL’s approach to its markets when it comes to its well established brands of Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises is pretty clear. “Royal Caribbean is the leader in cruising of the larger brands and has fully established its global footprint, with Harmony of the Seas and three Quantum-class vessels delivered in a short space of time,” comments Goldstein. “While we have no new ships coming in 2017, we continue to pioneer cruise shipping worldwide. 2017 is an opportunity to leverage the fleet capability over the years and establish these four ships.”
Excitement is building within Celebrity Cruises as it starts to unveil details of the first of the Edge Class, due for delivery next year. Meanwhile, Azamara punches above its weight and has been the pioneer of the small-ship, authentic cruise experiences that offer one/two overnights in port and involvement in local communities. “A lot of brands are copying us,” notes Goldstein.
While Goldstein declined to comment on the possibility of a newbuilding for Azamara, he was a little more forthcoming about Royal Caribbean’s Icon class. The first is set for delivery in 2022 so the lead time is generous – and it needs to be for there is much work to be done. “From an LNG standpoint, Icon is an exciting development for the company and part of our long-term approach to environmental friendliness,” says Goldstein. “If a ship project is going to emphasise a fundamental change in energy source, it is very significant. We have constantly pioneered things over 50 years and this will be one of the next steps for us.”
Another step is that the Icon class will use fuel cell technology. The timing could not be much better because in 2020, all ships must adhere to the International Maritime Organization’s 0.5% global sulphur limit. Although available, compliant fuel is very expensive, which has been a major factor in driving the development and implementation of exhaust gas cleaning systems on cruise ships. RCCL has been instrumental in testing these for some years and has a major retrofit programme in place for its existing tonnage.
“All our ships with advanced emissions purification (AEP) systems or LNG engines will be 2020 compliant,” Goldstein says. “We are actively retrofitting our existing ships with AEP units.”
Goldstein does not have numbers as to how many ships in the RCCL fleet will be retrofitted by 2020, but he does indicate that the Azamara vessels, being smaller and older, may be more difficult and less economical to retrofit.
“A lot of factors go into the discussion as to whether a ship will stay in a given brand or the company. 2020 would be a variable around the talk of those that don’t have AEPs retrofitted, but it is about much more than that,” remarks Goldstein. He adds that now 2020 is set in stone, the chances are that more manufacturers will come in so by 2019, the rapidly developing AEP system technology is likely to be well ahead of where it is today.
In terms of the digital experience, RCCL will release more news as 2017 continues. “It is part and parcel of the general consumer experience throughout the world for every industry,” comments Goldstein. “At RCCL we are trying to produce this for before, during and after a cruise.”
When it comes to new markets, Goldstein says the whole Asian market has potential. “There will be continual development of China, but also the whole region including Australia and New Zealand,” he predicts. “We’re working very hard with brands to develop the market, which attracts a lot of new-to-cruise travellers. We have to significantly increase Chinese travellers awareness about what a cruise entails and why it is such good value and, co-dependent to this, we have to develop distribution through China.”
Key to that, adds Goldstein, is ensuring that the agents understand and can explain a cruise vacation. “If you look at more mature markets like the US and UK over the years, travel agents have been a big part of awareness.”
However, there is another big piece to this puzzle: infrastructure. “In order for the cruise industry to truly capture the potential of the Asian market, we have to have ports of call with enough capacity and experiences to handle growing traffic,” explains Goldstein. “We need more transit call infrastructure. I am confident and optimistic, but I cannot take it for granted.”
When it comes to establishing homeports, China is more aggressive than others in the region. The limited facilities in Sydney are creating a choke point. “Australia is not where we want it to be,” says Goldstein. “It is a Sydney-centric homeport market and it [Sydney] doesn’t yet have viable plans to expand. We are open to opportunities within Sydney harbour, but also to solutions in Port Botany.”
On the other side of the world, the Caribbean continues to be the most significant deployment sector of the industry. Goldstein was recently appointed chairman of the Florida-Caribbean Cruise Association (FCCA). “There are at least 40 different sovereign jurisdictions that we deal with on a daily basis,” he says. “It is a very dynamic environment. There are always newly elected people to educate. I think the challenge for the Caribbean is to understand global tourism and the standard of tourism. I would say in round numbers it is about 10% of world GDP and that is a tremendous impact on the world and a source of jobs.”
Last year’s FCCA conference in Puerto Rica heralded positive changes. “In meeting after meeting, we saw that the different countries and islands recognised the nature of global competition and want to compete,” enthuses Goldstein. “I think it is a very propitious moment to become chairman.”