-- Cruising for years has been one of the fastest growing segments of the travel industry — the fastest by some measures. Since 1980, the number of people taking a cruise has risen by more than 7% per year. What's behind the growth, and can it continue at a similar pace?
USA TODAY assembled five of the industry's top executives in Miami earlier this month for a roundtable discussion on the topic: Adam Goldstein, CEO of Royal Caribbean International; Dan Hanrahan, CEO of Celebrity Cruises; Gerry Cahill, CEO of Carnival Cruise Lines; Kevin Sheehan, CEO of Norwegian Cruise Line; and Karl Holz, president of Disney Cruise Line.
The hour-long panel discussion was moderated by USA TODAY's Gene Sloan and Veronica Gould Stoddart.
USA TODAY: What's driving the growth in cruising, and can it continue?
Goldstein: You get a mix of benefits that you don't get anywhere else, and people are gradually discovering that … in terms of the entertainment value, the service … the ability to see multiple destinations on a single voyage without having to pack and unpack all the time. Because it's not an easy thing to sample, it's taken us longer probably than we would all have liked (to gain acceptance), but slowly but surely … we're penetrating the vacation population.
Hanrahan: The brands have done a great job differentiating themselves with their marketing, and products have changed. Because of that it has attracted a lot of (new customers), and I think it will continue to do so.
USA TODAY: Even with the rapid growth, four out of five Americans have never been on a cruise. For those would-be first-timers, make the case for cruising.
Hanrahan: The quality of the service and the experience, and the variety of experiences that you can have on board (from) dining to entertainment to activities is just so much broader than most hotels could ever offer. (Also) it's easy. People are so busy these days, and (with a cruise ship) you walk on and, from there, things are taken care of. You don't have to worry about where you go out to dinner that night. You're not wondering what you're going to do to keep your kids happy.
Holz: Cruising provides you a very convenient way to experience a (destination). I had some friends who were on (Norwegian Cruise Line's) cruise out in Hawaii. Their comment was, "There's not a better way to experience Hawaii." You see an island, you (return to) the ship, you enjoy yourselves over dinner, and the next thing you know you're at another (island).
Cahill: If you go to most land-based vacation spots, they're selling a room. We don't sell rooms. What we're selling, or creating, is a vacation experience. When the guest goes home, they go home with memorable experiences, whether it's a simple little thing like a family going back to their cabin after dinner at night and seeing a towel animal on the bed. Cruising has done that better than land-based vacations.
USA TODAY: What are the most common misperceptions about cruising?
Sheehan: One is (that cruising is for) an older demographic. Each of the brands has really done a good job of trying to show that this is meant for every demographic. For instance, with (Norwegian Cruise Line's new ship) the Epic, with the introduction of (such entertainment as) the Blue Man Group and Cirque Dreams and Howl at the Moon and Second City, we're showing that this is really something for (a wide age range).
USA TODAY: Many Americans also worry there won't be enough to do on a cruise.
Sheehan: Well, that's it. (But on the latest ships) there's just so much activity. When I first went on a cruise many years ago, you went to dinner and then you went to the show and then there wasn't much more to do, whereas now we're keeping people out and about and having an enjoyable experience.
USA TODAY: Is there so much now that it's too much?
Sheehan: When we introduced Epic, we did get that comment from some pretty influential travel people. But it's a changing dynamic. There are ships and itineraries for (people who want peace and quiet), but there are ships and itineraries that are really for people who want action and a lot of fun.
USA TODAY: Is seasickness holding back some of these four out of five Americans who have yet to try a cruise?
Cahill: I think price is a bigger issue. People have a perception that cruising is expensive, and they're comparing us to a hotel. What they don't realize is the cruise price includes all the food (and) all the entertainment on board, and we go to all these great places. If they were to compare it (in an apples-to-apples way) to a comparable land-based vacation, the land-based vacation is probably more expensive. We've been trying to get that message out for 20 or 30 years now.
Hanrahan: I don't think there's any other vacation where you can manage your budget as easily because, as Gerry said, entertainment is included, and all your food is included, and your room is included. It's up to you to spend more money after that. When you stay in a hotel, your food isn't included, so you have to worry about three meals a day. You have to worry about snacks. And then if you want entertainment, then it really starts to ratchet up.
Holz: One of the misconceptions that exists (for) Disney Cruise Line is it's all kids, all families, and they're all over the ship, and there's nothing for adults. We work hard to ensure that there (are) adult options, whether it's dining, programming or other activities.
USA TODAY: One of the big trends for many years now is ships getting bigger. The newest Royal Caribbean ship, Allure of the Seas, can carry more than 6,000 people — nearly twice as many as the biggest ships of the 1990s. Will the trend continue?
Cahill: Whether they go bigger or not is a hard call, because there are pros and cons. There are obvious economies of scale (to bigger ships), and as fuel prices get higher, (the fuel efficiency of bigger ships) is one of the ways you deal with it. Also, (with bigger ships), you have more opportunities to offer attractions on board, things for people to do. (But) you give up some flexibility on where you can go with a bigger ship. (For that reason), I don't believe any major cruise line will build an entire fleet of large ships. We have four home ports that we could never get into with a big ship.
USA TODAY: Adam, Royal Caribbean has built the biggest ships in the world. Can a ship be too big?
Goldstein: Well, we couldn't have utilized (today's largest cruise ships) in 1975. There wasn't the ability to make them or to berth them and perform well for our company. (But) 2011 is a different story. If you try to build a (ship four times larger than existing vessels) right now, it probably wouldn't have very many places in the world where it could be effective. Whether that will change in 50 years is anybody's guess.
USA TODAY: Another big trend over the years has been a decline in the average age of cruisers.
Hanrahan: We're seeing quite a shift in terms of our demographics. Whenever a new class of ship comes out, it awakens a new crowd. (As new ships debut) demographics will get younger. But we also have a huge repeat business, and those people get a year older every year.
USA TODAY: How is the aging of the Baby Boomers affecting your business?
Hanrahan: It's terrific. Boomers like to travel, and notwithstanding the trouble in the economy, they're still a fairly well-off generation. As they move into retirement age and have more time to travel, it's just going to be good for us.
USA TODAY: One area that really has taken off is family cruising. How has that affected the way you design ships?
Cahill: I have two daughters, (and) what I quickly learned is when you're going on vacation, whether or not you enjoy that vacation is dependent on whether or not your children enjoy that vacation. If it bombs for the kids, you're toast. We very much gear our products now to provide a great experience with the kids. We all have (kids) clubs and activities, and we have these ropes courses and the water parks and things like that.
Goldstein: When we started our Adventure Ocean (children's) program, it began at 6 years old and went to 15 or so, and over the years we've seen (demand) to take the programming to higher age groups and also, increasingly, to the lower end. We now are introducing nurseries across the fleet because we have more pressure from families with children under 3. (The age cutoff) went from 6 to 3 and now down to 6 months.
Holz: I was talking to some guests recently on a ship, and they were complaining because they never saw their children (due to all the activities). (Disney) is first an entertainment company, and so the way we think about things comes from how do we tell the story. So, obviously, the content that we have (at Disney) we put into play (on the ships), whether it's classic movies, contemporary movies or the latest from Disney Channel. A teen putting his own ESPN program together in a teen club is something that can occupy him for hours.
USA TODAY: It used to be that most cruises took place in the Caribbean, but the industry has become much more global. What's driving the trend?
Goldstein: The first step took place when Americans … saw the great things you could experience in cruising the Caribbean (and realized) you could also experience that elsewhere. That was the predominant element in the expansion of cruising in the '70s, '80s (and) even the '90s, and it's still going. But more recently, the trend is that the whole world is catching on to cruising. Destinations are being developed in response to the travel interests of all sorts of nationalities.
USA TODAY: What are the next hot spots for cruising? Has the boom in Europe run its course?
Hanrahan: The hot spot is where the individual consumer hasn't been. For some, the hottest spot is a Western Caribbean cruise. For somebody that's cruised all over the Caribbean, maybe it's Europe or Asia or Australia. Europe has been a fabulous destination for us. (Even before cruising took off), it was a nice place to go, and that's not going to change. There are so many different places, … (that) you have to go multiple times to experience it. I think Europe stays a very viable cruise destination for a long, long time.
Cahill: One of the impediments we all struggle with today when asking Americans to go to Europe or Asia is airline costs, so we've gone a little bit different route (at Carnival) because of that. We've tried to stay a little bit closer to home so people can drive (to ships). For families, four or five airplane tickets start to get fairly significant.
USA TODAY: You've put ships in more than a dozen U.S. cities in recent years. Are there any more U.S. ports left to tap?
Cahill: We just announced we were going year-round out of New York for the first time, so I don't think we're done. We'll continue to push that envelope.
USA TODAY: One of the trends we've seen at several lines is the addition of more name-brand entertainment such as the Blue Man Group (on the Norwegian Epic). Is this what it takes to compete with the likes of Las Vegas and Orlando?
Sheehan: It's a balance. There's great entertainment on cruise ships today … but also (we're trying) to push that and see what are the nuances that can help bring this 80% (of Americans who haven't tried it) into cruising. (Name-brand entertainment) is getting attention.
Goldstein: Customers' expectations of quality have elevated, whether it's for the entertainment or the food. The customer is more sophisticated. As Baby Boomers have made their way around the world and had more ethnic culinary opportunities and been in more entertainment spaces, they won't accept today what they might have accepted 10 years ago. And not only are cruise companies responding, but sometimes we're setting the trend and the expectations that (people) have.
Holz: The expectations of our guests is that we're going to have an absolute wow on board our ships, (so) if you look at our showcase theaters, the productions we put in there are Broadway-quality.
USA TODAY: Another trend is a move to greater numbers of restaurants on ships. Dan, why is that?
Hanrahan: It gets back to giving people a wide variety of options. (Cruisers today) are much more sophisticated. They have higher taste levels. So for us to compete well with other vacation options, it's something that we have to offer.
Goldstein: In 1970, one night (on ships) was Italian night and the next night was French night. The idea of delivering variety existed then. (But) how you execute against that customer requirement today is just completely different. You have to execute an Italian concept at a very high level. They can't come on to your ship and leave thinking that was some ersatz thing that the cruise ship tried to pass off as Italian. They are expecting a genuine ethnic culinary experience, and they're holding you to a high bar.
Holz: The consumer wants quality (and) variety, but they also have an expectation of great value these days. All of us customize menus on occasion. We went to Alaska, (and) we put fresh Alaskan salmon on there or filet of local venison. Those kind of things provide a dining experience that is unique and of value.
USA TODAY: Are you getting any pushback in terms of nickel-and-diming given the extra costs for some of these specialty restaurants?
Sheehan: It's a delicate balance. You need to have that (no-extra-charge) main dining room experience perfected, and you have to make sure you communicate properly about the value (of the other extra-charge restaurants) for that special occasion.
USA TODAY: How have changes in technology affected how you design ships?
Holz: Everything starts with great storytelling, (and) technology winds up being the enabler more than anything else. When you think about our recent ship, the Disney Dream, (which has the first) water coaster at sea, that's a bit of a technology marvel, (as are) the "magical portholes" in inside staterooms … (but) it's about creating experiences that are highly interactive.
USA TODAY: Those who have never been on a ship may worry, is cruising safe? How do you respond to that?
Holz: The safety and security of our guests and our crew for is our No.1 priority. All of us work hard at making sure the environment on board is safe and secure. It's training, drilling, leadership, as well.
Hanrahan: The five of us don't work together on anything (except) safety. We're regulated by the Coast Guard. The regulations on us for not only safety, but public health, are well beyond what any hotel or resort would have to deal with. So we're very regulated, and the fact that we work together to share ideas back and forth is something that can give our guests some peace of mind.