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Restore, rebuild, reinvent: Three steps for the cruise sector recovery

IBS Software head of tour and cruise Asish Koshy

IBS Software head of tour and cruise Asish Koshy puts forward the steps he believes the cruise sector should take as it continues on the road to recovery.

As international travel starts to open amid ongoing vaccination programmes around the world, there is some much-welcomed positive sentiment emerging out of the cruise industry.

Operations around the world are picking up once again, in large part thanks to the reopening of US ports for commercial sailings – yes, some new outbreaks have stunted demand here and there, but the overall trajectory is on the increase.

As the industry continues its journey towards recovery, we predict it will move through three key phases: restore, rebuild and reinvent.

Technology will play an instrumental role throughout each one of these phases to accelerate growth to pre-pandemic levels. Critically, this is not just about introducing technology to aid an emergency style recovery – it is about what technology is introduced at each stage for maximum impact and growth.

Beginning the cruise journey to recovery

The first phase of recovery entails the restoration of consumer and government confidence alongside getting fleets operational.

Specifically, it concerns key areas such as the safety of customers and employees, being agile enough to respond to government and port regulations, preserving liquidity and incentivising loyal customers.

In many ways, this phase is already well underway.

As of the end of August 2021, 190 ships are back to commercial sailings – this means that almost all the world’s fleets are back at work. By the end of Q1 2022, close to 100 per cent of the global fleet capacity is expected to be back in action.

Technology is already being implemented to restore confidence. Here, solutions need to be adopted to identify and control points in the guest journey where human contact can be reduced or even eliminated fully to suppress the virus.

In-room or staggered dining, online shopping, contactless payments, digital concierge services, congestion-reducing token systems and fast check-ins are just some of the features technology can help underpin.

Such technologies must also support several other must-haves going forward: the development of new offerings such as one-day cruises, private islands and phantom cruises, as well as the ability to craft innovative loyalty programmes and accommodate itinerary changes in the least disruptive manner.

From restore to rebuild

The next phase concerns rebuilding to a point where break even is achieved, setting the foundations for growth in the new normal. The key objective of this phase is to ensure that cruise lines can remain financially viable even when operating at a lower load factor.

Having adapted to the pandemic, companies will now have to take steps to ensure the majority of their fleets get back to commercial sailing, while at the same time encouraging more people to choose cruising as their preferred holiday choice.

This will require focus across three major areas, the first being the development of pioneering marketing strategies to inspire consumers into filling additional capacity.

The second and third areas concern lowering the break even threshold and finding ways to control costs even as more capacity is being added. In other words, becoming as efficient as possible without compromising on the guest experience.

This phase is all about identifying gaps in the guest journey and operational capabilities and finding means of filling them to increase revenue and lower costs.

Technology will be central to this and should be adopted to support a wide range of measures across the business spectrum.

From rebuild to reinvent

Once cruise lines are operating on an even keel with most of their planned capacity back in commercial sailing, the time for looking ahead arrives.

This means strategising and deploying ways to reinvent themselves on many levels, including products, business models, target markets, digital infrastructure and ensuring a roadmap to being an attractive and sustainable business is in place.

Cruise companies should be looking at digital innovation to transform the way they operate, turning themselves into truly tech-enabled enterprises.

What does this look like in practice? There are many aspects to consider, from adopting scalable cloud-based systems and guest engagement processes, to providing easy access to all products and services through digital channels. Cruise lines of the future will also need to encompass greater personalisation within the guest experience.

Ultimately, technology can enable cruise lines to transform themselves into total or unique holiday providers. This will not only help to set themselves apart from competition within the industry but also the wider leisure market.

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