Cruise lines’ Dubrovnik deal seen as a way to combat overcrowding

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Last year, Dubrovnik received 742,000 passengers on 538 ships.
FORT LAUDERDALE — Carnival Corp. CEO Arnold Donald said a new agreement in Dubrovnik, Croatia, illustrates how fears about crowding in favourite tourist areas can be managed by the cruise industry.

Speaking as part of a CEO panel at the Seatrade Cruise Global convention here, Donald took the occasion to disclose that major cruise lines have agreed to coordinate their schedules this summer in Dubrovnik.

That could mean some ships arrive later or depart earlier to keep their time in port from coinciding, or it could mean moving some ships to arrive during the week rather than on weekends.

The walled Old City of Dubrovnik was named a Unesco World Heritage site in 1979, but Donald said its mayor requested a meeting with cruise officials because it had been threatened with delisting by Unesco.

Donald and other cruise officials met several times with mayor Mato Frankovic, most recently in January when an agreement was apparently reached.

“In the end, our guests don’t want to go to a place that’s overcrowded,” Donald said. “If the sites that everybody wants to see are being abused, our guests won’t go. It’s in our self-interest, but it’s also in the interest of the places we go.”

Last year, Dubrovnik received 742,000 passengers on 538 ships. The city recorded about 3.4 million overnight stays, with many visitors drawn by Dubrovnik’s status as a filming location for the HBO series “Game of Thrones.”

Donald said cruise lines need to “listen with empathy for the issue of what some would call over tourism, not necessarily driven by cruise companies but by the fact that we’re a very visible symbol for it; our ships are large, and so forth. We have to listen with empathy to the ports that are out there and make sure we work with them to get the proper infrastructure.”

Dubrovnik’s over tourism concerns are shared by several other destinations in the Mediterranean, including Barcelona, Venice and the Greek island of Santorini.

Travel journalist Peter Greenberg, who moderated the CEO panel, said the World Travel and Tourism Council in a recent study listed “destination degradation” as one of three critical issues facing the travel industry.

Others on the panel took issue with the label “over tourism.”

“I think it’s a misnomer,” said Royal Caribbean Cruises Ltd. chairman Richard Fain. “What we’re really talking about is sustainable tourism.”

Fain cited Royal Caribbean’s development of Falmouth in Jamaica to offer an alternative to Montego Bay and Ocho Rios, as another successful response to crowding concerns.

After Falmouth opened in 2011, the number of cruise visitors actually rose, but they were more spread out.

“There were more people but less density,” Fain said.

“The opportunity, really, is to work together in these communities,” Fain said. “We work with them, and we find solutions that are to both of our benefits. And those we work with are very happy. You see that over and over again. Those who just want to make headlines, that’s a different story.”

The Celebtity Reflection in Dubrovnik.
The Celebrity Reflection in Dubrovnik.

Greenberg said that two cities where over tourism has been a hot-potato issue — Venice and Barcelona — are in the backyard of MSC Cruises, which has its headquarters in Geneva and its operations in Naples, Italy.

MSC executive chairman Pierfrancesco Vago said some perspective was in order.

“When you’re talking about Venice’s 30 million visitors a year, the cruise industry is 1 million of that,” Vago said.

He added that unlike the general tourism population, which ebbs and flows individually, cruise tourists come in groups that can be managed.

“We can actually coordinate,” Vago said. “We can actually ensure that there will never be an overflow, and we can control embarkation and disembarkation.”

A 2015 Unesco report recommended that the number of cruise passengers at Dubrovnik should not exceed 8,000 a day, arguing that when more than 8,000 visitors are inside the walls of the old city “tourist blight” becomes inevitable.

Research from the Port of Dubrovnik found that in 2016, arrivals exceeded 8,000 on 18 out of 243 total cruise days and that arrivals exceeded 10,000 on four days that year.

MSC has been looking for new destinations in the Adriatic to supplement hot spots like Dubrovnik. Last year, for example, MSC began calling at the port of Sarande, in southern Albania.

“Nobody knew that in Sarande, there were 10 different Unesco sites,” MSC CEO Gianni Onorato said in a recent interview. “This is the opportunity the cruise industry can give because there are options. That’s the only way to solve this problem.”

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Carnival Corporation expects revenue to rise by 2.5% in 2018

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Carnival Horizon being constructed and due next year.

Carnival Corporation has announced a $2.6billion net income for the full year of 2017.

Revenues for 2017 were $17.5billion – $1.1billion higher than the $16.4billion in 2016.

Carnival said in its annual report that it expects 2018 revenue yield to be up 2.5% compared to this year.

Bookings across the world’s largest travel company for 2018 have been running well ahead of the prior year at higher prices, Carnival said.

Carnival’s president and chief executive officer Arnold Donald said that despite booking disruptions from this year’s hurricanes, the company was heading into 2018 with a stronger base of business and higher prices than last year.

Donald said: “We have numerous efforts underway to keep the momentum going in 2018 and beyond, from our innovative approaches to increased consideration for cruising, to the further roll-out of our state-of-the-art revenue management system.

“In 2018 we also look forward to the delivery of four new cutting-edge ships, Carnival Horizon, Seabourn Ovation, AIDAnova, and Nieuw Statendam to further our strategic fleet enhancement program.”

Disruptions to voyages caused by hurricanes reduced fourth quarter earnings by approximately $0.11 per share.

Carnival CEO says Trump likely to be pro-business

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Carnival Corp. CEO Arnold Donald with Travel Weekly editor in chief Arnie Weissmann at CruiseWorld. Photo Credit: Jamie Biesiada
 

Carnival Corp. CEO Arnold Donald said that the election of Donald Trump as president has the potential to be good for the cruise industry, but he also said he hopes that Trump will do “the right thing” internationally.

Donald made the comment during a conversation with Travel Weekly editor in chief Arnie Weissmann at CruiseWorld, an annual Travel Weekly event in Fort Lauderdale that brings together travel agents and travel suppliers.

Asked by Weissmann for his response to the election, Donald quoted Secretary of State John Kerry, who several years ago said that there are no winners or losers after a U.S. presidential election. “The next morning we all wake up as Americans” who work on problems together, Donald said.

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More specifically, Donald said, “On the surface, President Trump will be pro-business. At the same time, I hope he does the right thing internationally. Most of our business is outside the U.S.”

In a follow-up about Cuba, Donald said that despite Trump’s campaign rhetoric about reversing President Obama’s openings toward Cuba, “I’m cautiously optimistic that bringing the two countries together is the right thing to do.”

Earlier this year, Carnival Corp.’s Fathom brand became the first line to regularly shuttle passengers between the U.S. and Cuba in over 50 years.

Donald said Carnival continues to work on a private destination in the Bahamas but isn’t ready to announce anything. Carnival executives have said in the past they have a potential site picked out on Grand Bahama Island.

“We want the right one on the right terms,” Donald said. “We think we have something coming soon, but we don’t want to count the chickens before they hatch, so to speak.”

Donald took the chance to show the audience of several hundred travel agents clips from the new Carnival-produced Saturday-morning network TV shows, such as “Vacation Creation” and “Ocean Treks with Jeff Corwin.”

He also regaled the group with a tale of highlights from his rise to CEO of Carnival Corp. He said his initial introduction to Carnival Corp. chairman Mickey Arison was engineered by board member Uzi Zucker, a Bear Stearns partner who also served as an adviser to a private equity firm of which Donald was a part.

He also told about his ambition as an 11th-grader to be a very specific level of manager at a specific type of Fortune 50 company. He said the teachers at the all-boys Catholic high school in New Orleans he attended on scholarship constantly reminded their students to think big.

“Three times a day they told us, ‘Gentlemen, prepare yourselves. You’re going to run the world.'”