Staying strong during challenging times

Arnold Donald explains how Carnival Corporation is overcoming adversity in CFR's new keynote interview

Staying strong during challenging times
AIDA Cruises’ newest ship AIDAcosma is one of several LNG-powered ships in Carnival Corporation’s fleet and began sailing in February 2022

By Rebecca Gibson |

There is a bright light at the end of every tunnel. This old adage has sustained many people through crises and is one that Carnival Corporation president and CEO Arnold Donald is prioritising as a guiding principle as he works with his team to overcome the challenges caused by the Covid-19 pandemic. 

“Humanity has faced many seemingly insurmountable challenges – in the last century alone we’ve faced war, pandemics, global financial crashes, natural disasters and a whole host of other issues,” says Donald. “They were all terrible times, but people fought to survive and eventually overcame the hardships. The trick is to remember that no matter how long that dark tunnel in front of you is, all you need to do is stay determined and take one step at a time, and you will eventually get to that light at the end of it. And when you do, great prosperity will await you.”

Carnival Corporation has adopted this approach throughout the pandemic by staying informed about the virus, collaborating with medical experts to develop solutions, securing liquidity to stay afloat, and working hard to support employees, guests and the communities it visits. “We keep marching forward, prioritising health and safety, and taking advantage of new opportunities as they arise,” says Donald. “We’re now on the final stretch with the prospect of bright days ahead.” 

At the time of publication, three-quarters of the company’s capacity across eight of Carnival Corporation’s nine brands were back in service, including vessels from AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises (UK), Princess Cruises and Seabourn fleets. P&O Cruises (Australia) is set to restart at the end of May 2022. They are gradually increasing occupancy levels and taking guests to a growing number of destinations around the world. “It’s all going very well so far and we’re hopefully on track to have all our fleet back in service for our summer season,” says Donald. 

He attributes much of Carnival Corporation’s restart success to its rigorous health and safety protocols, which were developed in collaboration with medical science, public health and infectious disease control experts, and incorporate mandatory measures specified by Cruise Lines International Association.

Built on Carnival Corporation’s pre-existing health and safety measures, the new practices have included and may still include mandatory testing for both crew and guests, vaccinations for all eligible guests and crew members, physical distancing, mask wearing where necessary, strictly controlled shore excursions, and more. The brands have made changes onboard the vessels too, upgrading onboard medical facilities, creating dedicated isolation cabins, increasing cleaning and sanitation procedures, and improving the air filtration and ventilation systems. In addition, Carnival Corporation has developed risk-based response plans for each individual ship to ensure infected guests can be rapidly isolated, tested and treated, or transferred to a shoreside medical facility if necessary.

“We’re following expert advice and guidance from the world’s best medical professionals and scientists, and we’ve had great cooperation from both our guests and crew,” says Donald. “We’ve safely sailed with more than 2.2 million guests, and we’ve still been able to deliver exceptional experiences, despite all the additional restrictions.”

Feedback has certainly been resoundingly positive. “Our net promoter scores have been at an all-time high since we’ve returned to the seas and guests from around the world have told us they thoroughly enjoyed their cruise experiences,” says Donald. “I’ve had the privilege of boarding a number of the ships to welcome back both our crew and our guests and it’s been an amazing to see their joy and excitement. Both our shipboard crew and our onshore employees are very glad to be back doing what they do best – delivering amazing vacation experiences that meet and exceed guests’ expectations, while ensuring they stay safe and healthy.” 

However, Carnival Corporation cannot yet sail to all of the more than 700 destinations it visited worldwide before the pandemic. “Some still haven’t reopened their borders and others have such strict protocols that it would be impractical for us to plan itineraries there currently,” explains Donald. “For example, we’re not able to operate world cruises because there are too many uncertainties related to complying with requirements for entry to different countries.” 

To overcome these issues, Carnival Corporation’s brands are primarily offering shorter cruises. “We’ve mainly organised seven, 10 and 14-day cruises because we know we can manage these effectively in the midst of constantly changing protocols,” explains Donald. “We’re in constant communication with governments, healthcare authorities, port and tourism partners, and other key stakeholders in the destinations we visit to ensure we can understand and comply with the local Covid-related requirements.

“We’ve also worked with each destination to map out detailed contingency plans for different scenarios so that all parties know how to handle any issues that may arise. For example, we’ve outlined what would happen if one of our guests tested positive for Covid before arriving in port, as well as what we would do if there was an outbreak on the vessel. This ensures a safe and seamless experience for guests, while protecting the local communities in the destinations.”  

Guests have been keen to travel to any destination after months of no travelling, but there has been particularly high demand in the drive-to-cruise market. “Most guests are looking for easy travel options, so they’re choosing cruises that depart from ports they can drive to in their own vehicles, rather than those they have to fly to,” says Donald. “Not only is it often quicker and more convenient for guests to drive to their embarkation port, but it also means they don’t have the stress of adhering to the airline’s protocols and figuring out whether they meet the entry requirements of the country they’re flying to. Hence, drive-to cruises are particularly appealing with travel, testing, vaccination, and other regulations changing constantly.”

Carnival Cruise Line, which celebrated the 50th anniversary of its first cruise on 11 March 2022, has taken advantage of the surge in demand for drive-to cruises since resuming operations. “There’s always been a strong drive-to market in the USA and Carnival Cruise Line sails from multiple ports in the country, making its cruises easily accessible to a large source market of guests who live within driving distance of at least one of them,” says Donald. “The brand knows that guests love its Caribbean itineraries, so it has created additional sailings that are very similar to its pre-pandemic cruises in the region, and they’ve been incredibly popular. Carnival Cruise Line has been outperforming every other brand in the cruise industry since the pandemic.”

The abundance of convenient cruises and the success of Carnival Corporation’s sailings are encouraging bookings from both repeat cruisers and new-to-cruise guests. 

“There’s a lot of pent-up demand for travel, and people are increasingly confident that cruising is the safest and most enjoyable and convenient way to holiday,” says Donald. “They can see that our strict health and safety protocols are working because we’ve had low case numbers onboard our vessels, and those that have arisen have been dealt with swiftly by our trained medical staff. Of course, we’re prepared for demand to decrease in the event of a spike in cases or a new variant emerging, but overall, we’re on a very positive trajectory, especially as a growing number of people get vaccinated and become more confident in living with the virus. This will enable us to bring more ships back into service and gradually increase their occupancy levels.” 

Four new vessels will also join Carnival Corporation’s global fleet this year, which Donald expects will help to entice any guests who may still be anxious about cruising. “New ships are always exciting, and they are a great marketing tool because they bring a lot of positive attention to both the brand and the wider cruise industry,” he explains. “All of these ships will have innovative new features that will delight and engage our guests.” 

The first is Princess Cruises’ new 3,660-guest Discovery Princess, which will debut at the end of March with a seven-night maiden voyage from the Port of Los Angeles in California, USA, to the Mexican Riviera. The vessel is the sixth and final in the Royal Class and will offer onboard highlights such as The Sanctuary and multiple dining venues. Guests will also be equipped with a wearable Medallion device to unlock the Princess Medallion Class Vacations experience and benefit from expedited contactless boarding, keyless stateroom entry, and multiple other  personalised services. 

In late November, Carnival Cruise Line will debut its second Excel-class vessel, Carnival Celebration. The ship will feature six separate onboard zones, as well as the Bolt rollercoaster, a Lido, an aqua park, a SportSquare, a plethora of dining options, and three-storey atrium with floor-to-ceiling windows that can be transformed into 16 individually controlled LED screens to augment onboard entertainment.

Arvia, which is currently under construction at Meyer Werft’s yard in Papenburg, Germany, will join the P&O Cruises (UK) fleet as a sister to Iona in December 2022. The vessel will boast attractions such as a high-ropes course, a swim-up bar and infinity pool, 12 restaurants and SkyDome, a pool area covered by a retractable roof – a first for P&O Cruises (UK).

“All three newbuilds are sisters to existing vessels that have earned rave reviews and tremendous satisfaction scores for the spectacular experiences they offer, so we expect they’ll be equally well-loved,” says Donald.

This July, Seabourn will welcome Seabourn Venture, the first of two new Polar Class 6 expedition ships from Italian shipbuilder T. Mariotti. The vessel will carry two custom-built submarines, 24 Zodiacs, kayaks and a 26-person expedition team, and will sail a maiden voyage from London, UK, to Tromsø, Norway. “Seabourn Venture will offer the type of immersive, one-of-a-kind experience that guests are looking for in the ultra-luxury category,” says Donald. “The ship is designed for exploring the Arctic or Antarctic and we’ve seen very high demand already, even though it is not yet completed.”

Like all new vessels joining Carnival Corporation’s fleet in the coming years, the four ships will be equipped with technologies and systems to minimise their environmental impact. Carnival Celebration and Arvia, for example, will  be the seventh and eights ships in the fleet to be powered by LNG fuel. 

“LNG isn’t the ultimate solution, but it’s the most efficient and cleanest burning fossil fuel we have available for wide-scale commercial use at the moment, and it’s certainly helping us to reduce our carbon footprint,” says Donald, noting that the fuel will be used to power a total of 11 ships by the end of 2025, representing nearly 20 per cent of the total fleet capacity.

“We’re continuing to partner with key organisations and experts to identify, scale and implement new technologies that will drive further carbon emission reduction efforts and set us on a path to full decarbonisation. For example, we’re exploring the use of bio-LNG, fuel cell technology, Lithium-ion batteries, and more.”

Transitioning to alternative fuels and investing in new low- or zero-carbon emission technologies will help Carnival Corporation to meet the new sustainability goals it set in late 2021. By 2030, the organisation aims to reduce the intensity of its carbon emissions by 40 per cent (relative to a 2008 baseline), cut absolute particulate matter air emissions by 50 per cent (compared to a 2015 baseline), halve food waste, install Advanced Waste Water Treatment Systems on more than 75 per cent of vessels, and increase fleet-wide shore power connection capability to 60 per cent of the fleet. And by 2050, it aspires to expand shore power functionality to all ships, send all waste to waste-to-energy facilities, achieve net carbon neutral ship operations, and build zero-emissions vessels.

“We recorded a peak in absolute carbon emissions in 2011 and they have been lowering ever since, despite a 20 per cent capacity increase between 2011 and today, and an additional 19 per cent capacity increase on order with new ships,” says Donald. “Since 2016, we’ve invested more than $350 million to upgrade technology, improve energy efficiency, optimise fleet performance and itinerary planning, and more – and it’s significantly reduced our carbon footprint. We’re also making good headway with increasing the availability of shore power capabilities on both our ships and at high-volume ports around the world.

“In addition, we continue to make excellent progress with reducing single-use plastics, increasing recycling, and installing food waste biodigesters across our fleet to lower the volume of waste going to landfill. Similarly, we’ve significantly cut water consumption and usage on our ships. And we’ve enhanced our ability to produce about 80 per cent of the water that we need onboard.”

Despite this success, Carnival Corporation is not resting on its laurels. “We have a long way to go before we can achieve our net carbon neutral aims and it’s going to require us to be innovative and inventive, but I’m confident we can do it,” says Donald. 

Carnival Corporation’s sustainability efforts aren’t just restricted to its ships. It has also set goals to ensure it has a positive impact on the environment, culture and economic prosperity of the destinations it visits. 

“The cruise industry has a huge responsibility and shared commitment to making travel and tourism sustainable – maintaining a healthy planet is not just an operational necessity, but also a moral obligation,” says Donald. “Our highest responsibility and top priority has always been to ensure environmental compliance and protection, as well as the health, safety and well-being of our guests, employees and the people in the communities we visit.

“We know that our business depends on us being able to take guests to beautiful destinations where they’re welcomed by the locals. For this to happen, it’s vital that we listen closely to the locals’ concerns and collaborate with our destination partners to do everything we can to comply with any requirements, so they feel like the community benefits more if we visit than if we don’t. Fortunately, we’ve already achieved this goal in most of the destinations we call at today.”

Another key business imperative for Donald is to build a more diverse and inclusive organisation that provides all employees with a safe, healthy and positive work environment that offers equal opportunities for personal and professional growth. Donald, who views his employees as Carnival Corporation’s greatest asset, says: “We’re already among the most diverse companies in the world as our global employee base represents people of all genders and ethnicities from well over 130 countries, but we want to engineer more shipboard and shoreside diversity, equity and inclusion across all ranks and departments by 2030. We see it as a critical business imperative because it spurs innovation and drives better business results. Not only does it allow us to enhance guest experiences and operations, but it also produces great returns for our shareholders. Of course, it’s also the right thing to do from a social responsibility perspective too.”

As part of its commitment to provide a safe and healthy working environment for employees, Carnival Corporation plans to introduce global well-being standards by 2023. 

“The ‘happy crew, happy guests’ mantra is very much true and when we have happy employees, the business performs well too,” says Donald. “We take a holistic approach to protecting and improving the physical and mental well-being of our employees, listening to them to fully understand their needs or concerns and implement improvements. Often, it’s the simple changes that have the biggest impact, such as expanding broadband capacity onboard our ships to make it easier for crew members to stay connected with loved ones back home. 

“Now, we’re taking it a step further by sharing best practices across our nine brands and learning from both our industry peers and other businesses to develop consistent standards, so we continue to get closer to our aim of being the greatest place to work in the world.”

In his relentless pursuit to continually improve how Carnival Corporation operates, Donald capitalised on the pause in global cruise operations to analyse every area of the business and identify new opportunities for optimisation.

“One silver lining of the pandemic is that it forced us to improve communication, collaboration and coordination across our nine brands and that’s something I’ve been striving to do since I took the helm of Carnival Corporation,” he says. “Now, we’re operating as a true federation of nine brands, communicating regularly and share skills, knowledge and ideas across sourcing, ship design and construction, revenue management, marketing and public relations, and many other areas. 

“Working together on projects has led to greater ideation and the rapid adoption of best practices, which will ultimately make us stronger, leaner, and more efficient by improving cash flow, increasing returns for stakeholders and enabling us to develop even greater experiences for guests. Now each brand is stronger and more successful as part of the whole than it would be if it was operating in isolation.” 

Carnival Corporation’s other outstanding priority is to continue to counter the claims of industry detractors and regulatory bodies who still deem cruising as risky. “One of the most challenging parts of the cruise comeback is that our industry seems to have been singled out for more criticism and held to a higher standard than almost every other sector but it’s not clear why,” says Donald. “We’ve always had rigorous health and safety standards, and historically, we’ve been better at dealing with this type of health crisis than wider society. The data shows our protocols are working and cases on cruise ships are low compared to elsewhere.” 

Donald is determined that Carnival Corporation will lead the way in driving regulatory changes, particularly because he is acutely aware of how many people worldwide depend on the cruise industry reopening successfully. “The cruise sector supports half a million jobs in the USA alone, and there are nation states that are totally dependent on travel and tourism. We’re obligated to honour the duty we have as a responsible corporate citizen to prepare the data and communicate with various authorities around the world to show that cruising is safe and enjoyable.” 

Despite these challenges, Donald remains resolutely positive that the cruise industry – and the wider travel sector – has a bright future. “We’ve always said the industry would survive, and the road forward is now clear and we’re on a positive trajectory,” he says. “Two years ago we had no ships operating at all, one year ago we only had a few sailing with low occupancy, and now we’ve got eight brands and 75 per cent of our fleet capacity back in service. By our summer seasons, we hope to have the majority – if not all – of our vessels back in service.”

While he concedes that new variants pose a potential risk, Donald is cautiously optimistic that the virus is becoming less threatening. “Omicron seems to have been mild for most and has caused significantly fewer hospitalisations and deaths, plus vaccination rates are higher and treatments have advanced,” he explains. “This is prompting destinations to open up and is giving people confidence to socialise and travel again. Hence, we expect to soon be able to go back to ‘normal’ operations and offer guests itineraries to destinations worldwide within the next 12 months. We’re hopeful that 2023 will be great for both the cruise industry and guests.”

This article was first published in the Spring/Summer 2022 issue of Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed. 

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