Carnival CEO seeks to keep both locals and tourists happy

Q: The cruise industry has been under pressure in the past year because of a mounting discontent amongst local communities in tourist ports across Europe. How is Carnival dealing with that?

A: For us, it’s a case of happy locals, happy guests. We have to speak to the governments, we have to comply wherever we are. We deal with the locals, not just the shopowners, to understand the challenges they face, what their feelings are, their experiences, and then we try to engineer around that, being very open about what we do.

For example, in Dubrovnik [Croatia], the locals were getting huge bursts of tourists all at once, which put the old town at risk of overcongestion. What we have done as a company, and as an industry, is to stagger when the ships come in, and distribute the guests so that we avoid a situation where everybody comes in at the same time. However, cruises are not the main cause of overcongestion] – most of it is [holidaymakers staying for longer in these locations – but doing what we do we takes a bit of pressure off the town; though maybe [local authorities] can work with [longer term holidaymakers] as well to figure out how to moderate the number of people in the city at the same time.

Q: There is an emerging belief that automation will ultimately increase people’s spare time, with direct benefits for the tourism industry. Do you share this view?

A: Technology transforms the way people live and hopefully improves the quality of life. It basically refines how people spend their time. Technology ultimately creates jobs, as opposed to eliminating jobs, and I think it’s a plus for tourism.

Before the industrial revolution, people worked really long hours and were pretty confined; with the industrial revolution, they still worked long hours, but became less confined. With the more recent technological innovations, again we work long hours, but we are free to work from almost anywhere. The nature of the work changes, what people work on changes, but human beings are motivated and tend not to just kick back and most of them are going to put the time in, as well as take time off. Work hard, party hard. Technology allows you to be able to do both. That’s why I believe that emerging technologies provide opportunities.

Q: The tourism sector in south-east Asia is booming and projected to keep growing at a steady pace, largely because of the growing number of outbound Chinese tourists. How is Carnival positioning itself to make the most of this opportunity?

A: Anywhere I go, be it Cuba, New York or Singapore, I see many tourists from mainland China. That is telling me how the business has grown in the past five years regarding mainland Chinese tourists. It’s a huge population with a big appetite for experience, exploration and adventure, and this is going to be a boon for the travel industry.

There are already an estimated 135 million mainland Chinese outbound tourists, and probably fewer than 1 million of them are cruising at the moment. So that number is only going to grow.

At Carnival, we have six ships home-ported in China, either full-season or partial-season ships, but also a number of ships in Australia and even Alaska that serve itineraries of fly-cruising from mainland China. [Our offer] is going to grow substantially over the years.

At the same time, in China we have a partnership with China State Shipbuilding Corporation, and China’s sovereign wealth fund – China Investment Corporation – to help them build a domestic cruise company and cruise industry. It’s in their five year plan, and it’s going to happen.