MSC Cruises is in the midst of an ambitious expansion and in July it finalised the order of MSC Fantastica. This is the Italian operator's new Fantasia-class cruise ship and the 12th in its fleet. MSC Cruises CEO Piefrancesco Vago writes about the company's future strategy, the state of the industry and its resilience, and the need for a better relationship between cruise lines and governments.
Although not completely immune to weakening economies, the cruise industry has a track record for standing strong in harsh economic times. Last year, 12 million passengers in the US and five million in Europe went on a cruise, which corresponds to a 12% increase compared with 2008, and in the past ten years the industry has displayed remarkable resilience and experienced double-digit growth.
The main reason for this resilience is that cruises offer tremendous value for money, combining low prices with quality, five-star accommodation and a vast choice of activities.
De-seasonalisation, meanwhile, allows cruise liners to diversify their commercial offer according to the vacation habits of various countries, enabling the sector to be active 365 days a year. Several factors helped MSC Cruises through the economic downturn: its flexibility and quick adaptation to new realities, global passenger sourcing (the company can dispatch ships to where demand is greatest), desirable products, and good yield management. This enables the company to sell the right resources to the right customer at the right moment for the best price, fundamental to getting economies of scale.
New cruising markets for 2011
All markets are important and believing one is more important than another isn't a sensible approach to adopt. Each market has its own characteristics, interests, strengths and weaknesses. MSC's key focus for 2010-11 will be on market penetration.
The company is present in 43 countries and will do its best to consolidate the strong relationship it has with local travel agents in order to make the name of MSC synonymous with quality, elegance and hospitality.
The cruise sector needs finally to be considered by governments as an accredited interlocutor. So far, cruise lines have been addressed simply as a part of the shipping sector and this should change.
The cruise industry has its own identity, its own goals and a proper representative body: the European Cruise Council. It therefore claims a place on the ongoing round-tables and deserves this place, considering that the total economic impact (direct, indirect and induced) of the cruise sector in Europe in 2009 was considerable. The industry would like to discuss with governments the most important issues that affect the cruise sector and share with them thoughts and possible solutions.
One of the toughest challenges at present is to convince the public and European law makers that new cruise ships are more environmentally friendly than other traditional holiday options. Another important issue and challenge is to try to reach a rentable economy of scale and combine high-level product with low and effective operational costs.
The cruise industry is already showing a strong commitment to safeguarding the marine ecosystem. Environmental issues are a core concern for all ECC members, including, of course MSC, reflecting our wish to be at the forefront of quality shipping.
It's not only something the EU regulators require more and more (for example, look at the sulphur limit, which has recently been reduced to less than 0.1%), but also passengers who increasingly demand and expect the sector to respect the highest standards in environmental protection.
As far as MSC is concerned, as well as consolidating results and reflecting on the company's goals, the upcoming months will see it working hard on MSC Fantastica, which will be delivered in spring 2012. MSC Fantastica will take the fleet to a total of 12 cruise ships carrying 1.4 million passengers in 2013.
Whenever I can, I try to get onboard, because when I am there I always learn something new. Of course, my cruises are more about work than holiday, because on board I always take some time to speak with the captain, the hotel manager and the crew, who are in contact with our guests on a daily basis, so that I can understand what our guests want.
Do I have a favourite cruise? How could I possibly choose one? Every route has its charm and every season has its special itinerary.
Sailing down the fjords and going on an adventure in the northern European capitals is an extraordinary experience, but visiting the greatest centres of religion and civilisation in the Mediterranean is a feast for the eyes. Currently, I am fascinated by one of our newest routes – exploring the cities of New York, Quebec and Charlottetown.