Navigating the three phases to post-pandemic cruise sector recovery

Navigating the three phases to post-pandemic cruise sector recovery

IBS Software

Technology will be crucial in the cruise industry’s post-pandemic recovery, says Asish Koshy

Cruise operations around the world are setting sail once again. Despite sporadic Covid outbreaks which have affected demand, ongoing vaccination programmes have resulted in a steady return.

Cruise Market Watch estimates that by the end of 2021, over 92 per cent of the pre-pandemic global fleet capacity is expected to be back in action. But as cruise returns, the industry will move through three key phases of post-pandemic recovery: restore, rebuild, and reinvent.

Fundamentally, technology will play an instrumental role throughout each phase to accelerate growth to pre-pandemic levels. Critically, this is not just about introducing technology to aid an emergency-style recovery, it is about what types of technology are introduced at each stage for maximum impact and growth.

Technology is already being implemented to restore confidence across key stakeholders. In fact, according to the Cruise Lines International Association (CLIA), within 24 hours of the World Health Organisation’s (WHO) initial public health emergency declaration, Covid-sensitive measures were enacted across the cruise industry, and these measures have been adapted and improved using technology ever since.

Solutions are being adopted to identify and control points in the guest journey where human contact can be reduced or even eliminated fully to suppress the virus. In-room or staggered dining, online shopping, contactless payments, digital concierge services, congestion-reducing token systems and fast check-in are just some of the features that technology can support.

Such technologies must also support several other must-haves going forward. These include the development of new offerings such as one-day cruises, private islands and phantom cruises, as well as the ability to craft innovative loyalty programmes and accommodate itinerary changes in the least disruptive manner.

This is the first phase of recovery, which aims to restore consumer and government confidence alongside getting fleets operational, and it is well underway. As of the end of 2021, 323 cruise ships are expected to back to commercial sailings globally, and this shows that cruise lines are having success in boosting consumer confidence and deploying the required technologies.

Phase two is to rebuild to a point where cruise lines can remain financially viable even when operating at a lower load factor. Here, cruise lines will have to take steps to ensure the majority of their fleets get back to commercial sailing, while at the same time encouraging more people to choose cruising as their preferred holiday choice.

This will require focus across three major areas: developing pioneering marketing strategies to inspire consumers into filling additional capacity, lowering the breakeven threshold, and finding ways to control costs even as more capacity is being added. Cruise operators need to be as efficient as possible with resources without compromising on the guest experience.

This rebuild phase is all about identifying gaps in the guest journey and operational capabilities and finding means of filling them to increase revenue and lower costs.

Technology will be central to this and should be adopted to support a wide range of measures across the business spectrum. In the marketing and experience space, for instance, technology can be leveraged to reduce time to market and launch new promotional campaigns, as well as craft superior experiences which justify price premiums.

Technology can also be used in the processes of stimulating demand by offering pre- or post-tour packages with seamless luggage transfers, growing packages of flights and hotels with cruises through discounts and marketing, and allowing payments in full upfront for a discounted price or other benefits.

The final phase, once cruise firms are operating at a level where most of their planned capacity is back in commercial sailing, will be looking ahead. This means strategising and deploying ways to reinvent themselves on many levels, including products, business models, target markets, digital infrastructure and ensuring a roadmap to being an attractive and sustainable business is in place.

Cruise companies should be looking at digital innovation to radically improve the way they operate, turning themselves into truly technology-enabled enterprises.

This may entail anything from the seamless integration from shore to ship to eliminate redundancy, to transitions to paperless and automated back-office processes. From adopting scalable cloud-based systems and guest engagement processes to providing easy access to all products and services through digital channels. It will also need to encompass greater personalisation within the guest experience.

While the pandemic hit the industry hard, it has given cruise the push to pivot, innovate and ultimately bounce back better. Technology is fundamentally at the core of an improved vacation experience for cruise guests, and if deployed conscientiously, in line with the recovery phases, it has potential to set cruise lines apart, both within the industry and within the wider vacation market.

Asish Koshy is head of tour and cruise at IBS Software

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Alex Smith
By Alex Smith
23 November 2021

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