Cruise demand leaves pandemic in rearview with record passengers, more construction on tap

Already this year, both Royal Caribbean Group and Carnival Corp. announced major new ship construction deals, and Norwegian Cruise Line Holdings added to that this week with its order of eight more vessels across its three brands.

The heads of those groups were on stage to discuss where the industry is headed and enjoy their recent success.

Carnival Corp.’s president and CEO Josh Weinstein put it in a way that gained plaudits from fellow panelists and others at the conference.

“The concept of pent-up demand for cruising is gone,” he said. “We have been cruising for three years, right? It’s over. This is natural demand because we all provide amazing experiences. We delivered happiness to literally 31 million guests last year. And people see it, they feel it.”

A big part of what cruising missed during the pandemic he said was that word-of-mouth promotion that is needed to convince people to try their product.

“We now have 31 million people getting off our ships and going home and telling their friends and family who have never cruised before, ‘You don’t know what you’re missing.’ ‘This is amazing.’”

All of the leaders echoed the industry line that they offer a much better value than land-based vacations, but that the experience gap between the two has now shifted in their favor coming out of the pandemic.

“The appreciation for building memories with your friends and family coming out of COVID is at extraordinarily high levels,” said Jason Liberty, president & CEO at Royal Caribbean Group. “Also wealth transfer, right? Grandparents wanting to see that wealth transfer live, watching their kids and their grandkids experience that is also at an all-time high. … We have the secular trends of people buying less stuff, they want experiences. We’re in the experience business.”

Another bright aspect to the industry has been the spillover effect of all of the new ships since the pandemic, said Harry Sommer, president & CEO at Norwegian Cruise Line Holdings Ltd.

“Their new products are so extraordinary, and so much better than what was delivered back in ’15, ’16 and ’17, that it’s driving additional excitement for the entire industry,” Somer said. “When any new ship is delivered, no matter whether it’s part of our portfolio or the other portfolios, demand improves for all of us because it adds excitement to the industry.”