Cruise lines say loyalty will lead them back

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During Carnival Corp.’s business update last week, a Wall Street analyst asked whether the brands that were particularly tarnished by media coverage in the early days of the pandemic, such as Princess Cruises, were suffering more in terms of bookings.

The answer was no. CEO Arnold Donald said that not only was Princess not doing worse than other Carnival Corp. brands but was “trending with all the other brands in the industry.”

Wall Street might not understand this, but it doesn’t come as a surprise to travel advisors who understand how strong cruise line loyalty can be.

“What we noticed in our sales numbers is that Princess has remained strong since that incident,” said Vicky Garcia, COO of Cruise Planners, No. 24 on Travel Weekly’s 2020 Power List. “It did not affect them. Princess has a very loyal following, so they almost went into a reactionary mode and said, ‘I’m going to be even more loyal because they got so beat up.’ They were so loyal they wanted to defend and support it.”

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In fact, Cruise Planners data shows that Princess 2021 departures are up 11% over the same time last year and almost 40% versus the same time two years ago.

It is this level of loyalty to brands and to cruise vacations in general that has cruise line executives confident that past cruisers will be the ones to bring the industry back once ships can start sailing again. It is that confidence that also prompted Donald to declare during the call with analysts that Carnival expects demand to be “more than adequate to fill ships in a staggered restart” with fewer ships sailing, citing the two-thirds of its global guests, 8 million each year, that are repeat cruisers, and the company’s active database of nearly 40 million past guests over its nine brands.

According to CLIA’s 2020 State of the Cruise Industry Outlook, 82% of cruisers say they are likely to book a cruise as their next vacation.

While that survey was done before the pandemic, UBS Investment Bank recently asked 94 cruisers in the U.S. about  their “inclination to cruise again” and found that, while the sample is small, the survey showed that over 85% of respondents are “likely to cruise again,” while less than 5% say they “will not or [were] unlikely to cruise again.” The remainder says they “will not cruise for a long time.”

Of the cruisers surveyed, 56% expect to take a cruise in the next 18 months, and 16% said they expect to wait until there is a vaccine. Expectations for cruising this year remain somewhat low, the survey found, with 13% of those surveyed expecting to cruise in the next six months.

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Reliance on past cruisers and customer loyalty, however, will not long sustain an industry with more than 100 new ships on order through 2027, which Donald acknowledged.

“That doesn’t mean we don’t have work to do once we start cruising with much larger volumes of capacity to attract new-to-cruise,” he said. “Of course, we will have work to do, but right now the brands are strong, the bookings are encouraging, and with the staggered start we’re going to have in the resumption of cruising, there should be plenty of pent-up, latent demand with previous cruise-goers to fill the ships.”

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