Carnival CEO on the Future of Cruising

0:01Sarah Dandashy: Hey, I'm Sarah Dandashy here live at the Skift Global Forum. It is our third day. I'm very excited to talk to Christine Duffy, who's the president of Carnival Cruise Line. You were just up on stage with Peter Greenberg, and it was exciting to hear as far as everything that's going on, not only in the industry as a whole, but with things that are going on with Carnival. We are. It was fun to reconnect with Peter. I haven't seen him in a while. And just to talk about all the amazing new things that we do have coming, including, you know, five new ships that are coming our way. And the next one will be Carnival Festival.

0:36Exactly.

0:37Sarah Dandashy: Well, we're going to talk about that. So, but you did mention something interesting up on stage where you were saying that about half of your guests live within, as far as like American guests, live within a five-hour drive of a Carnival cruise. So how does that shape where you end up choosing to deploy ships and which drive markets may even have still room to grow? Well, I think we've shown, for example, we sail from 13 U.S. home ports. One of our newest home ports is Norfolk, Virginia. I didn't even know. That's amazing. So we have a ship in Norfolk that we never had before. So that's a brand new market.

1:16Mobile, Alabama is a great market. We have a ship there and we've actually upsized the ship based on the demand that we see from Mobile.

1:25Sarah Dandashy: That's fantastic. And so I think these are, you know, home ports where it's easy. Jacksonville, a lot of people can just drive down from Georgia and South Carolina. Exactly. So and actually that ship, it's not one of our newer mega ships, but it's a great ship. People love it. And it has among the highest net promoter scores across our entire fleet. Really? Yes. It's so interesting when it works out like that. But it's clearly, it's the right place, the right time, and providing the right product. So Carnival Tropical is headed to Galveston in 2028. So you kind of are talking about this, but what demand signals made Texas the right market for this new ship?

2:10Sarah Dandashy: And what would success look like in the first year? Well, for us, Carnival's been sailing from Galveston for 20 years. I like to say we were there first. We are proudly putting the star of Texas on the bow of our new ships and remind everyone Carnival loves Texas. Texas has loved Carnival for two decades. Look, it's getting a lot more crowded, right? There's more capacity. Guests have more choices. and so we don't take anything for granted, which is why we brought Carnival Jubilee to Galveston and she's done fantastic. We are now going to bring Tropical, which will have some new and different features from Jubilee into the market.

2:55And we're really excited to just continue to grow our footprint there.

2:58Sarah Dandashy: That's great. And I love that you bring up Jubilee because that actually goes into my next question. So you're adding regular four and five day sailings. Is that right? So this is the first time And we'll have one of our Excel class ships, Jubilee. We'll be doing four and five day sailings. And I think that's just going to open up for people the opportunity to sail even more for those quick getaways. Would you say that it's a way to attract the first time, a lot of the first time cruisers? A lot of first timers do pick a shorter cruise if it's their first time. We're also going to be shifting our Mardi Gras ship, which is based in Canaveral.

3:34that's been running longer cruises to short cruises in 27 when we take delivery of Festaval. So that'll be another opportunity to have first-time cruisers actually be on our newer ships.

3:47Sarah Dandashy: Yeah. And I love that. I mean, that you're focusing on that. It's interesting because I speak to different travelers all the time and some that like, oh, I haven't been on a cruise yet. Oh, it's so daunting. And I'm like, no, find a shorter cruise, like do something that might be three, four, five days, and then you'll realize it's pretty amazing. And so obviously I think it's a good like entry-level experience for those that maybe haven't done it before. Look, 90 % of people that take a cruise repeat. So there's a high degree of satisfaction. You know, for us, it's opportunity to make sure that we continue to market in such a way that people appreciate and better understand what a cruise experience is all about.

4:29And with some of these larger ships that are now running short, I have guests and myself personally, sailing on Jubilee for seven days, you can't fit it all in. So if you're going to do a four or five day on Jubilee, you're going to have to come back to get the rest of it or book Tropical to get the full eight day or seven day experience.

4:49Sarah Dandashy: Exactly. It's a nice way to like they get a taste. They don't, you know, overstay your welcome. The next year, no, you want to come back for more. Always leave them. And bring your friends. Always. Anyways, so I love you were talking on stage this, the come as you are approach that Carnival is so known for, because obviously that serves every, every person wants a different type of vacation. So how do you decide which audiences, which audiences to even design for? And where does trying to serve everyone become a trade off? Well, I think we've always prided ourselves, you know, for many years, our tagline was fun for all and all for fun.

5:25Love. With this idea that we did not create spaces where if you paid more than you get the front seat in the theater and you get special access. Anything that we do like that is not in your face. Yes. Right. So we don't want that. But we also recognize that people do want some of these different spaces that are quieter. So our Serenity deck, as an example, on our XL class ships, we've created spots where people do pay and they can go and have an experience with a cabana that, you know, is away from the crowd. Just the same way that we've expanded our kids programming. Because, you know, kids, people are sailing much more with larger groups.

6:12Of course. Whether it's teenagers or little ones. So we're introducing a new Turtles program for the diaper crowd. And so again, just really leaning into recognizing that we do have to serve multiple generations who are all looking for an experience that's fun for them as an individual, yet they have a shared experience in many of the things that they can experience on the ship.

6:38Sarah Dandashy: What you said on stage, which I loved, is that a personalized experience in a group environment. Yes. And that is a very tricky thing. It's a shared vacation. A shared vacation. And it's this fine balance. But I mean, obviously, you all have been doing this for quite some time. But I think that's what keeps it also exciting. Because you can kind of play with those, like, oh, well, what if we add this? And getting that sort of real-time feedback as far as what guests and travelers are looking for. Well, as I use the example, you know, why does everybody now want to eat? They line up for dinner at five o 'clock and they want the dining room open because they want to get out and play and experience all that the ship has to offer.

7:14And as we've put more and more into the ships, it's also just created this. Hey, I don't want to spend an hour and a half every night for dinner. I'm just going to go up to Lido and buffet and grab some food so I don't miss any of the activities and entertainment. A show, a show. Want to get back to the casino, whatever it is that you want to do. And I think that's really where we listen hard to what guests want and can see these consumer trends come to life.

7:43Sarah Dandashy: Well, and it's because you also have access to all that data, I think, far more than maybe other aspects of the hospitality and travel business. So Celebration Key welcomed 2.4 million guests in its first year. Which measures matter most when you assess that investment? Is it itinerary demand, ticket pricing, spending at the destination, repeat booking, something else? You know, frankly, at the end of the day, it's all about the guest experience. And if guests are having a great experience, then demand grows, then price may increase. But ultimately, you've got to deliver a great guest experience.

8:18And then that word of mouth is what keeps people coming back. The fact that we not only have Celebration Key, but have Relax Away, which is truly a very different private destination experience, more pristine beaches, a little quieter, like the name implies, just a place to chill and relax. where Celebration Key, more vibrant, the biggest lagoon in the Caribbean, beach clubs, and we're expanding. So we're really happy with both of those destinations. And you'll see often both of them on the same itinerary.

8:52Sarah Dandashy: Which is great because they can have a little bit of both experiences, especially if they're on a longer sailing. So Carnival Rewards, to talk a little bit about that, recognizing spending as well as sailing. With that, what is the main goal? I mean, obviously, when we think about rewards programs, a lot of it is to increase retention, certainly. But how can you, soon can you really tell if that's working or what people are responding to with the rewards program? Well, we're seeing a great response. And while I will admit, when we announced this back in June of 2025, there was a lot of upset because I think talking about changing, you know, people don't like change, right?

9:35This program was implemented as a loyalty program back in 2012, and it was based on frequency. The growth that we've had with now coming soon 30 ships in our fleet to accommodate that growing number, growing, growing, growing, and being able to really offer something that's unique just wasn't possible anymore. The other thing that I'm hoping we can get across better to media is the fact that it really is a unique rewards program for the cruise industry because your status or level of how many cruises you've taken is not associated with the rewards, which is points for every dollar you spend. So even if you're a first-time cruiser, If you opt into the program, whatever you spend buying the cruise, whatever you spend on board the ship, you're getting points that you can use for whatever you choose.

10:32Yes. And that is different than loyalty and status. Yes. And the loyalty and status based on, you know, your spend is still recognized, but your loyalty based on how frequently and how much you've sailed with us is also still recognized through what's called a milestone program. So it's a change. I think, you know, we announced it early so people could really prepare and maybe we gave people too much time to think about it. But so far, we launched officially on September 1. People are already spending their points. They've opened new credit cards and they're using it for everyday spending. So they have more points to spend when they're on their cruise.

11:14Sarah Dandashy: Yeah, and it's smart because it's like when you think about it, and you can even look at other industries, like the airline industry, for example. I mean, there was a kerfuffle when they made changes at Delta, American, etc. But at the end of the day, these programs, they have to be tweaked as you're going along. As more people, as we're very lucky to be in this position to say, more and more people are traveling. And so we have to fine-tune things, and we're also able to learn that much more from the travelers. So just two final questions here. but so what I loved you were saying is talking about ships as a destination, which very much so.

11:47Sarah Dandashy: And I mean, I'm a big fan of cruising. I agree with that as well. So as you invest in this next generation of ships, how do you decide what attractions are actually going to drive bookings or support higher prices versus maybe ones guests simply expect to be included? Well, I think, for example, one of the basic expectations for Carnival is that we have a Guy Fieri's burger joint on every ship. People love our Guy's burger joints. And so that's there. You know, we now have introduced Shaq's big chicken. But I think, again, we want to make, there's certain things that will be consistent, but then the idea of changing things up, right?

12:24So Carnival Jubilee in Galveston has a roller coaster on the top of the ship. Which is so exciting. But Tropical will have this sensation point, which is the top three decks of the ship, which are just going to be amazing for families. We're going to activate it on some of the evenings during the cruise. So again, it's just, it's a different experience. So I think the combination of the things that I want and expect that are the same, no matter what carnival cruise I go on. The same standards, so to speak. And then what's new and exciting and different. We're going to be introducing some new dining concepts in specialty dining, which people love.

13:01We've introduced recently, we've been piloting a comfort menu back to what people want to be able to choose for food. and maybe it's not always fine dining in the dining room. This is true, of course. So really, as you said, we have such a built-in focus group and the feedback is continuous and we really take it to heart and listen and make changes and trade-offs.

13:24Sarah Dandashy: Yeah, of course. And the luxury of having so many different types of ships is that obviously, you know, you can have the first-time cruisers, they come in, they're introduced to the brand and then as maybe they want to choose an option that it's not only is it a different itinerary, but it's a different type of ship. And they're like, oh, great. well, this one will have a roller coaster. We'll definitely bring the kids on this or whatever it is. So it's a nice way that they ultimately end up staying loyal to Carnival because there's so many different ways to sail. Well, and as you know, Carnival, we are the flagship brand for Carnival Corporation, but we have seven other brands.

13:56And so there is something for every guest. And if you're looking for ultra luxury, you have Seaborn, you have Tunard, which is such a storied brand in the industry, and Princess, Holland America, if you want to go to Alaska, Carnival has ships there. Princess and Holland America have land-based lodges that take you into the national parks. So there really is something for everyone depending on what is the experience you're looking for versus assuming that it's based on your economic, you know, what you earn. That means that you go on this cruise. That's just not true.

14:33Sarah Dandashy: No, it's definitely not true because there's so many different ways to sail on every ship. Correct. And depending on the experience that you want. And as you know, today, people are very aspirational about their travel choices and what they want to experience. Definitely. So kind of ending up here with our last question, just looking forward, things that are exciting, that excite you. I mean, you've been in the industry for some time, so we obviously ebbs and flows, no pun intended. But what do you see as like maybe on the horizon that is just exciting about the industry as a whole. I mean, the cruise industry is always doing something unique and fun.

15:13Sarah Dandashy: So, yeah, what's exciting you? I'm excited that it's becoming more mainstream, right? Because I think when you look at the growth from 2019 at 25%, that's pretty significant, especially that included the COVID years. I think people are really recognizing the value that you get from a cruise vacation, particularly for people that are traveling with families and considering, you know, what kind of vacation can work for everybody. Like the fact that for Carnival, you can drive to the cruise vacation. I mean, just the hassle value alone. Exactly. But then think about the dollars that you're saving.

15:50Of course. That you can then, you know, invest in your vacation, creating memorable experiences for you and your family.

15:57Sarah Dandashy: Well, I'm so excited to just see where the industry continues to grow. Obviously, everything that you all are doing, always just being a landmark in the industry. So thank you so much for taking the time today. Thank you, Sarah.