Cruise Ship Wars | Smooth Sailing | 5

0:05I'm David Brown and this is Business Wars.

0:29For years, the top three cruise lines, Carnival, Royal Caribbean, and Norwegian, battled it out for supremacy on the high seas. But those fights were ripples in a pond compared to the tsunami that hit the entire industry in 2020. Forced by the government to shut down during the first COVID wave, the cruise lines lost billions of dollars and tens of thousands of jobs. Well, sailing resumed in the summer of 2021, and since then it seems the industry has really had the wind at their back. Analysts project nearly 29 million passengers will cruise this year. That's a number they haven't seen since before the pandemic.

1:06They're also on track to generate more than$30 billion in revenue, positioning cruise lines as the fastest-growing segment of the tourism market. So how was the industry able to pull off such a remarkable comeback? Helping us answer that question, Dan Klein. He's the founder and executive editor of Come Cruise With Me, an online publication from the Arena Group that launched in June. There, Dan covers everything from the best dining packages on board to the industry's next big move. Dan has been writing about cruise lines for nearly a decade, and he's setting sail with us to explore why cruising has become so popular.

1:44So drop your anchors and stick around, because all that's coming up.

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3:27Dan Klein, welcome to Business Wars. David, thank you for having me. Now, congratulations on the launch of Come Cruise with me. What was the inspiration for this site? So my boss, our CEO, Sarah Silverstein, and I had long talked about my passion for cruising. And it's something I write about a lot when I was managing editor of the street, when I was editor at large at the Arena Group. And it just seemed like there was such a devoted following that it was just a logical area to jump into. And a lot of the media that covers the cruise industry went away during the pandemic. A lot of the sites got smaller.

4:00So it just felt like there was room for something that was sort of personality-driven and warm. Now, let's talk a little bit about your enthusiasm. When was your first cruise? It was actually about five years ago. I grew up in the Boston area, and it's just not something we ever thought about. And then I did a family bat mitzvah cruise, and it was on a, I'll call it a mid-level carnival ship. And it wasn't the greatest ship in the world, but I kind of instantly knew I liked the idea of, you know, people serve me dinner, there's drinks, there's entertainment. I like that idea too. Yeah, no, it's not the worst.

4:33And then I just sort of fell into it. And for a while, you know, I'm very lucky that my job is portable so I can write on cruise ships. I can kind of work wherever I am. So I just started doing it regularly. And often a cruise ship is just where I'm working from. Very cool. Very cool. How many cruises have you taken since that first one? It's around 60. I don't keep an active number, but I do add it up from every now and then. Holy cow, 60 and five years? That's wild. Was there one particular part of the experience that really sort of hooked you in, do you think? Yeah, it's music and coming together with people.

5:09One of my favorite things to do is just be in the pub on a Royal Caribbean ship where they have acoustic guitarists. And, you know, they're playing everything from Springsteen to Taylor Swift to older stuff. And usually the people in that room just become a group of friends. And, you know, some of my closest friends are just people I've met in that setting. And sometimes you just meet people that are your friends for the week or for the three days or whatever it is. You know, writing is a very solitary job. So I like being around people quite a bit. You know, this is one of the confusing things for me because I've looked into doing a cruise at one point.

5:42And honestly, I wasn't sure whether I should really be looking at the destination, you know, like, for instance, Alaska or, you know, someplace like that. or whether I should really be thinking about the quality of the cruise line or the particular ship that is on offer. You know what I'm saying? Yeah, no, it's very personal. Last year, I did a week in Europe. My guitarist buddy, Sam, works for Royal Caribbean, and I try to join him for at least a week when he has a contract. And I haven't spent time in Greece or Italy or the places at Croatia where we stopped. So I wanted to soak up every aspect of it.

6:19And it wasn't so much about the ship, but you still have to eat on the ship. You still have to go to the gym, whatever the things you're going to do. So that becomes very personal about what's most important to you. Okay. So you talk about things to do. What's the wackiest amenity that you've seen on one of these cruise ships? I know the ships seem to be adding more and more features with every, I don't know, with every new ship, really. Yeah. It kind of knocked me out when I was on a ship with bumper cars for the first time. I'm like, I am of the age that like, you know, when I was a kid at camp and you went to the amusement park, bumper cars were a major attraction.

6:57Royal Caribbean on Icon of the Seas has something called Crown's Edge, which is literally you wear a harness and you step off like kind of a, not even a zip line because you're not holding anything, but like literally off the edge of the ship. Carnival has roller coasters on its newest ships. Like for me, that's not the draw. But I certainly when I take my my now 20 year old on a cruise, he's going to want to play laser tag. He's going to want to go on the water slides. He probably doesn't want to just sit in the hot tub with a gin and tonic. Right. Right. He's not allowed to drink. Yeah, of course not.

7:27Let's talk about some of the cruise lines out there today. We followed the big three in our season carnival, Royal Caribbean, Norwegian cruise line. uh let's talk a little bit about the reputation of each one um how would your experience compare across these big three so i will say that you can have fun on any sailing um you know carnival has a reputation for being party boats and sure if you go on a three-day weekend and it's during school vacation you might get a different atmosphere than if you go on a monday through friday or a port intensive sailing so you do have to look at when you're booking royal caribbean is really owned the family space.

8:06Not that there aren't plenty of families on Norwegian and Carnival, but it's every Royal Caribbean ship has rock slides and really developed kid zones. And Norwegian is closer to Royal Caribbean celebrity brand. It's a little bit more upscale. They do a little bit more all-inclusive pricing. You don't have to do all-inclusive. And it's a bit more adult. So it's one of those things where Carnival has a really pronounced reputation that sometimes isn't fair. Like, you know, one person having a fight on the pool deck is going to go viral. There's no videos of all the people that didn't have a fight on the pool deck.

8:39Right. You know, and look, I've been on all those cruises. I've only seen one person ever taken away by security. So, you know, in general, they're really good at making sure, you know, people are having a good time and controlling themselves. I actually tell people that, especially if you're an adult, that price might be the driving factor. You know, getting on the newest and the biggest ships, it might be cheaper to get on a Norwegian ship with drinks and internet included, and maybe an excursion or a specialty dinner. You really have to be clever because the industry has gotten very, very popular.

9:12Yeah. Which company has the largest cruise ship in the game right now? And is this still a sort of a race to be big? So Icon of the Seas is the newest Royal Caribbean ship. And it's a complete, they called it a white paper, like literally starting from a blank piece of paper, redesign. It takes some features from their other ships, but it's really innovative in that it has glass in places you wouldn't expect there to be windows in a megaship. It has a lot more food and entertainment options. But overall, ships have been getting bigger, but I do think that's going to de-escalate. Royal Caribbean has actually said that its upcoming ship, Utopia of the Seas, won't be the biggest ship in the world.

9:52And then Star of the Seas, which is the sister to Icon, will also not claim that title. So I think big is big at this point, and I'm not sure it matters if you're on the 12th biggest ship in the world or the biggest. But Icon, because it is a brand new design, it has what I would legitimately call a water park rather than just some water slides. Wow. It has a lot of clever restaurants. And that's certainly true when you look at the latest carnival ships. Norwegian has avoided the giant ship game, but they've actually been talking a little bit about, you know, maybe they need some bigger ships as well.

10:25Interesting. So I'm wondering what this means as a practical matter for the guests. How does the experience compare, say, a mega ship versus one of the smaller ones? Is bigger really better? Or does it come down to how sensitive you are to the waves or what? If you're on a mid-sized carnival or Royal Caribbean or pretty much the whole Norwegian fleet, the reality is it's very rare that, unless you're very sensitive, that people are going to get sick. And I think you have to think about experience. For me, if I'm going for four or five days, I'm happy being on a mid-sized ship because there's only five dinners.

11:01So if there's more than five specialty restaurants, I'm probably not going to be able to get to all of them. There are some features like a flow rider or a roller coaster that I'm probably not going to take advantage of. So you really need to look at your group. And right now, the mega ships are the most expensive. If you want to book Icon of the Seas, it might cost you two or three times more than booking, say, Symphony of the Seas, which is a very large ship, a very large Royal Caribbean ship that's really modern and really new, but you might be able to get on there for a third the price. I'm sailing a lot on a solstice class ship, a celebrity ship in the next six months because the prices were affordable for friends who want to come with me.

11:41So it really does help to have a travel agent or do your homework, really study because if you're not going to go on the water slides or you don't care that it has the Aqua Theater, then it might not be worth paying for the newest megaship. I think that's really surprising that you would say it's helpful to go with a travel agent? Because it seems like so many people just do their research online, but that might not cut it when you've got to think about so many variables on these ships. So we partner with a travel agent that is my travel agent. And the reality is a good travel agent can help you find the best price.

12:15If you say, hey, I need to cruise Christmas week, which a lot of people do, well, prices are very elevated. So they might be able to find the strange itinerary or the unpopular ship that meets your needs. The other thing is when something goes wrong, it is very difficult to communicate from a ship with the cruise lines. So I was on a sailing out of New York and my mother was supposed to come and her flight got canceled. Well, having a travel agent, they could pull all the levers to get her there. A travel agent can put her on a bus, could pick her up. So you don't want a hobbyist. I think it's really important you find a travel agent and really in this one, a travel agent who has someone who specializes in cruises.

12:55Okay. Now, you talk about your mom. Who's taking cruises these days? I think traditionally they've been known to attract an older clientele. Has that shifted much? Yeah, they've gotten much younger. Now, obviously, there's upscale cruise lines that are going to attract retirees, attract people with a lot of money. If you're doing a longer sailing, anything over seven days on a mainstream cruise line, it's definitely going to skew older. but it's families, but it's also become multi-generational. You often see, you know, grandpa, mom and dad, and the kids. The nice thing about a cruise is you don't actually have to be with your family.

13:31And I mean that in a nice way. If I like sitting in the pool and so does my mom, but my son wants to go ice skating, you know, and my aunt and uncle want to read a book, you can all do that and then come together for meals or come together for a show at night. So, you know, if you and I go to Disney World, we both have to be at Disney World. We don't really get the option of having our own personalized vacation. Right, right. Totally. And they can't go much further than the ship itself. So there we are. That was actually really nice when I had a teenager, you know, who was not necessarily the most responsible person in the world.

14:05I kind of knew I couldn't lose him. Yeah, totally, totally take that as a parent myself. All right. Right. So when would a cruise typically be a better value than, say, a comparable land vacation, for example? So a cruise is almost always a better value than a land vacation. Really? Cruises include food, entertainment, and basic beverages. So if you go to Colonial Williamsburg, you have to pay for your hotel, you have to pay for dinner, you have to pay for whatever events you're going to. Now, that's not to say that there aren't lots of extras on cruises. Alcohol costs extra on all the brands we're talking about.

14:41Internet costs extra. There's upgraded dining you can buy. You can pay for excursions. But you don't have to pay for those things. So I always – and look, I'm a Disney passholder. I'm a giant fan of Disney World. But for a family of four, just your tickets for a week are going to set you back over$2 ,000, which is probably enough to get you on a cruise. This is actually something that the CEOs of all the cruise lines have complained about. They would like to be of value, but not quite as good of value as they have been in the recent years. Daniel Klein is the executive editor for the online publication Come Cruise with Me.

15:15It's time for a quick break. When we come back, we're going to go deeper into one of the roughest storms that the cruise line industry has had to weather so far. Stay with us.

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17:58Hey, welcome back to Business Wars. Our guest today, Dan Klein, a travel and finance journalist who's covered the cruise industry for nearly a decade now. Dan, let's turn the clock back about four years, shall we? I think you know where we are headed with this. COVID-19, really an intense time, to say the least, when it comes to cruising. As someone who was covering the industry at the time, well, what was running through your mind when COVID began to spread in early 2020? I was on a cruise ship for the Super Bowl, and you started to hear the COVID rumors, but you didn't really know what it was.

18:33It was so unprecedented. I don't think anyone who wasn't a scientist at that time could have possibly predicted what was going to happen. And I remember that sailing because it was a little bit rough. And the ship I was on, Navigator of the Seas, could not dock at Coco Cay, the Royal Caribbean's private island. And in my head, I went, no problem. I'll be there in March. I'll be there three weeks from now or whatever it was, but probably four weeks from now. And the reality is we didn't sail again for, I don't remember the exact number, but let's call it 18 months. My next sailing was in July 2021, which was actually the first sailing back.

19:06So it was unexpected. It was dark. There was a lot of borrowing going on with the cruise lines just to pay their bills at very high interest rates. It was very, very bleak. You know, in our season on the cruise ship wars, we referenced this passenger testing positive for COVID as early as January on one of the cruise lines. And then there was this scramble to try to satisfy regulators and lawmakers, you know, that the cruise lines were serious about keeping this from becoming a major issue on the ships. But you had passengers noting back in March staff didn't seem to be taking health and safety precautions as seriously as advertised.

19:50What was the reasoning that cruise ships gave for continuing to operate given the spread of this incredible virus? So I actually think they shut down pretty quickly once we had a sense of what the scope of this was. I think you could accuse the convention industry in Las Vegas, you can infuse the theme parks in Orlando, and the cruise lines of all going maybe two or three weeks too long. And the reality was the cruise industry at the time was regulated by the Centers for Disease Control. So there really wasn't a national government that could come in and tell Disney World to not open. We saw in California that Disneyland on a local level was kept from opening.

20:30But the cruise industry, long after it had implemented and spent millions of dollars trying to figure out social distancing and being able to have some form of operating, was not allowed to operate. And I don't want to say it was a little bit unfair, but if you go to Disney World and get the flu, you're probably home before you have it. Whereas with the cruise, it does present. I mean, look, COVID is still a problem on cruise ships. You know, they don't have to report the numbers, but you could go on a cruise ship and get the flu or COVID and they'll quarantine you. I actually think the cruise lines have done a reasonably good job in isolating people and preventing outbreaks.

21:07How much are cruise lines affected by, I don't know, I'm talking about viruses or bugs that go around, that sort of thing. I mean, how big of an issue is this for the cruise lines? So there's an indirect media perception. It's kind of like a plane crash. If one plane crashes, it feels like 100 planes crashed. So if there's one norovirus outbreak that's not contained every three years or happens occasionally, it's going to get a lot of play. But what I will say is that, yes, the cruise lines are very serious about, frankly, stopping those media stories by not letting them happen. But the cruise audience is also really tolerant.

21:48There's definitely people that take cruises and ask for an isolated table in the dining room, or maybe they take a lot of their meals in their room. My cousin went on a cruise when he was in treatment for leukemia and had a very different cruise experience because he isolated himself a lot of the time. So, you know, I understand that fear. But my guess is that's also a fear that extends to other places that are crowded with people. Did the pandemic in any way affect the way cruise ships approach their excursions, amenities, and frankly, overall health and safety protocols? Yeah. I mean, they absolutely – there's more cleaning now.

22:27There's significantly upgraded air filtration. The cruise lines have always been aggressive about making people wash their hands before they go on a buffet. I can't believe we need to tell adults to do that. But now those stations are generally manned. And frankly, other cruise liners will shame you. I think people are selfishly aware of it that, hey, if I get a cold, I might end up in my room for the next four days. In terms of excursions, I don't think that much has changed. But definitely the onboard real cleaning and let's call it the perception, the making sure there's a person squirting hand sanitizer, even though there's a hand sanitizer station right there.