March 17, 2017

Cuba a win-win as other Americas regions seek longer seasons, less red tape

Anne Kalosh, US editor of Seatrade Cruise Review and Seatrade Cruise News

The opening of Cuba to cruise tourism from the US is not just set to grow business for the Caribbean but, according to Florida-Caribbean Cruise Association president Michele Paige, it also could boost the all-important first-time cruiser market.

In her keynote speech at the 'Future of Cruising in the Americas and Caribbean' conference session at Seatrade Cruise Global, she said: 'Cuba presents a host of opportunities including new itinerary options and the tapping of pent-up demand from non-cruisers who may cruise for the first time.'

And not just to Cuba, either, as Carnival Cruise Line president Christine Duffy pointed out: 'Even if the person who sees all the coverage about cruise lines going to Cuba does not take a cruise there, they might well be influenced to cruise somewhere else.'

But the development of Cuba as a cruise destination is not going to be straightforward. MSC Cruises USA president Roberto Fusaro said: 'Havana has just the one pier and even the transfer from the airport to the port is challenge.'

Duffy added that it was not just about the infrastructure but the whole complexity of the process for US travelers. 'Travel agents are being asked questions and there have been lots of calls to our call center as there is much explaining to do,' she said. 'It helps that we have already been through this with Fathom so it might be even harder for those lines coming in now.'

One of those is Norwegian Cruise Line and its svp sales Camille Olivere said that one early surprise involves the sourcing of the passengers for Cuba.  

'We’re not just seeing the expected demand from the Florida market but also one from the US Northeast. This is because it is such a culturally immersive itinerary and I think that many of those passengers will return for a land vacation,' she said.

'The size of ship you can take is limited but, as the infrastructure there grows, you’ll see us all offering a greater range of Cuba itineraries.'

In fact, NCL is already expanding its range of itineraries throughout the Caribbean. Olivere said: 'We have added more homeports in recent years and plan to continue this strategy as passengers appreciate the greater options and enriched itineraries this creates.'

MSC Cruises is also looking for new homeports and Fusaro identified San Juan, Puerto Rico as one under close scrutiny. Executive director of the Puerto Rico Tourism Co. José Izquierdo pointed out that only 7% of the local GNP is currently generated by tourism so 'it is an opportunity for growth and we know that if Puerto Rico is succeeding as a destination, the rest of the region will thrive as well.'

Duffy said: 'We are also shifting our ships around and now have some of our larger ones doing shorter cruises in the Caribbean. This is a very positive way to get new people to cruise.

Carnival will also be operating its first LNG-powered ship out of the US from 2020 but has yet to announce which destinations will be receiving the 'significant environmental benefits this vessel will bring.'

The Caribbean is projected to see a 5% increase in deployment this year but Fusaro insisted it still needs to keep itself competitive as a cruise destination.

'It always comes back to a simple ABC of making sure to retain its attractiveness to visitors, to build infrastructure both hard and soft (from roads and buses to guides speaking a range of languages) and to control costs.'

Infrastructure is also on the minds of those running the ports serving the Alaska/Canada cruise sector which is worth C$780m in direct spending, C$1.6bn in indirect spending and 11,000 jobs to the regional economy.

Port of Vancouver's Carmen Ortega, manager cruise services and Canada Place operations, detailed major projects at the two key homeports of Vancouver and Seattle.

Olivere said: 'NCL is the port’s partner in the $30m project at Seattle designed to expedite the embarkation process at Pier 66 and this comes at a time when we are introducing the largest ship ever to cruise in Alaska, Norwegian Bliss.

'Its design has been customised to that destination with huge viewing windows including a 180-degree area at the front of the ship which offers passengers the same view as the captain has from the bridge. In its deluxe Haven area, there will be a two-story window.'

But the view Crystal Cruises vp deployment Claudius Docekal would most like to see is that of a cruising map of Alaska which shows as many ports as there are in the Caribbean.

He said: 'We want to spread to other ports where the big ships can’t go and we welcome the possibility of another homeport establishing itself near Vancouver.'

An even more attractive possibility for both the destination and the cruise lines is that of the current May-September season being extended, but this is proving a slow process.

Silversea Cruises Americas managing director Mark Conroy said: 'The fact is that demand for June is twice as high as for May and it is another gap to April. We are very weather-dependent in this region and it varies from year to year.'

Holland America Group evp Charlie Ball said: 'We have done some shorter sampler cruises after mid-September even though trips across Gulf of Alaska can be hit and miss in terms of weather.  

'But we also see some moves in the direction of starting the season earlier—NCL has done that—and this is because it can be much nicer to cruise Alaska before all the ships arrive.'

Olivere agreed: 'There is definitely an appetite for it so, if you can make it work in terms of yields, it is worth doing.'

An extended season is also the ambition of the Cruise Canada/New England Alliance of five associations. Currently, the region receives 1.5m cruise visitors and 600,000 crew but, said CruiseMaine USA director Amy Powers, the target is to become an established year-round destination by 2026.

For a region long perceived as an option solely for the fall, this is ambitious but Powers says an extended season is crucial for ports to be able to secure the funding for the infrastructure investments required to meet the needs of the newer, larger ships.

'We do have sailings in June and they are doing quite well so we are quite optimistic of expanding the program later,' Olivere said.

Ball added: 'We have been going there in the summer for some time and we like the product. It does help that we can use a smaller ship but it is still a big risk to put a ship there then and it would help attract more summer business if port charges were reduced for operating year-round.'

Conroy said: 'Operating costs (pilotage and port charges) are almost as high as they are in Alaska so there is scope for something to be done there.

'We did try to expand the season but it didn’t work out. The rates are not quite there yet for us but there is great potential as passenger satisfaction is very high. I believe it is only a matter of time before we see a longer season established.'

In Docekal's view, 'We need more joint marketing to promote summer cruising so that consumers realize there is much more there than just brown leaves.

'We have been in talks with New Brunswick to do just that and show what kind of experiences that it can deliver—like eating lobsters on the ocean floor (in the Bay of Fundy).'

Powers said: 'Our seasonality is a weakness and extending the season will also help us lower the average age of cruise visitors which is now in the early 70s.

'We need to target millennials and should also address the Asian/Chinese market, the lack of variety among our tour operators, and the problems with the federal government border control process.'

'All cruise operators have had their issues with Customs and Border Protection and it’s not like we’re carrying Syrian refugees on our ships,' Docekal said. 'The government needs to work with the cruise lines to improve the process as that would not just be good for us and our passengers but also for the destination.'

Government regulations also came under fire when the session turned to prospects for the South American cruise sector as Andes Consultants' Sebastián Montero proposed easing cabotage as a way to boost the market.

Conroy said: 'There are genuine challenges, particularly with cabotage which restricts the itineraries we can offer. We could reach a broader demographic if that was eased.

Our Galápagos program is huge success because we have great cooperation there with the government. If we could have that cooperation in Brazil it would make huge difference.'

There are different problems on the other—West—coast of that continent. Docekal said: 'A lot of us would like to sell seven-night cruises in South America but it is very difficult to make it work along the West Coast.

'It is a long trip for North Americans to Santiago and then transiting to Valparaíso and it is very difficult to amortize the cost on just a seven-night cruise.

'Also, the quality of guides and transport is somewhat lacking while, if you just go on shore excursions, most ports are in pretty good shape but it is often not a pleasant experience for people going ashore independently.'



Posted 17 March 2017