In many ways, cruise is the
outlier of the travel industry.
While more travelers are turning to digital
sources to book their travel – Phocuswright’s
U.S. Online Travel Overview 2018 predicts online penetration will
increase from 50% in 2018 to 53% in 2022 – in cruise, distribution is
predominantly managed offline.
Online bookings account for just 20% of overall
cruise revenue, split about half and half between cruise line websites and intermediary
websites.
But the reliance on agents doesn’t seem to be a negative factor. Quite the
contrary.
While both air and lodging markets are growing, the cruise industry is
outpacing all others. According to Phocuswright’s
U.S. Cruise and Packaged Travel 2018 report, the cruise segment in the
United States jumped 10% in 2018, its third consecutive year of double-digit
gains.
And the industry still has substantial headroom for growth.
The Cruise Lines International Association says 26.7 million people cruised in 2017
- and that number is expected to reach 30 million in 2019. Compare that to the
United Nations World Tourism Organization’s estimate of the total number of
international tourist arrivals in 2017: 1.32 billion.
With that large of an unrealized market and the fact that most ships operate at
nearly 100% capacity, it is clear cruise lines are confident that if they build
it, travelers will come.
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All major operators are adding to their fleets, with a
steady supply of ships setting sail in the next few years: In 2019 alone, about
two dozen new berths are scheduled.
And technology is one of the primary tools cruise lines are using to stand out
among their competitors in the eyes of consumers.
For years the cruise industry
was criticized for lagging behind the rest of travel in its use of technology,
but recently, that has been changing.
For the third entry in our series
on cruise, we explore how technology is being used to transform cruise travel
into an ultra-connected, frictionless experience.
Promoting personalization
In some ways, the story of state-of-the-art
technology impacting cruise travel has a bit of a “back to the future” plot
line.
As ships are getting bigger and
bigger – some carrying upwards of 6,000 people - cruise lines are using technology
to help them go back to a time when the experience was exclusive and intimate.
“The purpose is to create more
personal vacations that are simpler to access and consume than ever before and to
democratize elite level guest service to our largest ships,” says John Padgett,
chief innovation and experience officer for Carnival Corporation.
“So essentially taking what was
so special about the cruise industry in its inception, of small ships with
incredible, personalized service, and almost returning to those roots. The
innovation is not the strategy; the innovation is how to achieve that strategy,
which is to create that level of personalization at scale.”
For Carnival, the solution has come in the form of what it
calls its Experience Internet of Things, or xIoT, a shipboard ecosystem launched
initially on Carnival’s Princess Cruise Line that uses more than 7,000 sensors
to communicate with each guest’s unique digital identity through a quarter-size
disc known as the OceanMedallion.
Guests receive their Medallion at home shortly after booking
and are encouraged to create an online profile housing their passport, travel
and payment information and preferences – information that streamlines their experience
once on the ship. Prior to departure, Padgett says customers are encouraged to watch the “OceanView” platform, streaming original content about the ships, ports
and cultures they will visit.
“From a consumer standpoint, especially in travel, it’s how
much bang for the buck did I get, how much value did I get out of this
experience,” he says.
“So if their perception is their vacation started at home - versus
when I stepped on the ship - that is a much broader perception of value."
Setting sail
But the real value – not just in case of Princess’ Medallion
strategy but also for innovations from other lines such as MSC Cruises and Celebrity Cruises – comes
in the way technology is improving the onboard experience.
Celebrity introduced what it calls its “most technologically advanced
ship” – Celebrity Edge – in December. In addition to a mobile app for
comprehensive guest engagement, the ship uses facial-recognition software and a
system of geofenced beacons to allow its nearly 3,000 guests to board quickly
and easily.
“One of the biggest concerns when they started building
these larger ships, there were predictions that it would take hours and hours
to get on and off. That’s not close to being true,” says Avoya Travel co-founder
Van Anderson, who recently traveled on Celebrity Edge.
...there are small ships today that don’t have the technology that the large ones do, so the boarding process for hundreds is taking just as long as it is for thousands.”
Van Anderson - Avoya Travel
“Technology has completely changed the game. In fact, there are
small ships today that don’t have the technology that the large ones do, so the
boarding process for hundreds is taking just as long as it is for thousands.”
Whether through a connected device like Carnival’s OceanMedallion
or an app such as MSC’s “MSC for Me,” cruise lines are eliminating some of these
pain points of travel and making it easier for guests to choose their brand
again and again.
Padgett says guests that arrive in port “Ocean Ready” –
meaning they have created that online profile – are boarding the Princess Medallion
class ships in about 20 seconds, and the profile is saved so guests do not need
to recreate it the next time they travel.
While the specifics of implementation vary from one line to
another, in general brands such as Princess, MSC, Celebrity, Royal Caribbean International,
Norwegian Cruise Line and others are using technology in the form of apps and smart devices
to enable cabin access, concierge services, schedule information and
reservations, wayfinding, payments, interaction with digital signage and more.
And the ambition is consistent as well: to use technology to
create a better, more personalized guest experience.
“Technology for me and for us has always been considered and
will be considered an enabler,” says Luca Pronzati, chief business innovation
officer of MSC Cruises. Pronzati says his team interviewed crew members and
guests – representing more than 170 nationalities – to develop the MSC for Me
platform.
“We needed to simplify the operation and simplify the
experience in order to make our passengers really appreciate the time they
spend onboard the ship.”
Padgett echoes that sentiment, saying the xIoT platform is
built to foster more meaningful human interactions on board, for example by
enabling tablet-carrying crew members to “know” guests as they approach.
“That is
much different than how technology is typically promoted in the cruise industry,
as the attraction or the ‘gee whiz’ thing,” he says.
“Our core focus is to make sure that every crew member
is equipped with whatever information or capability they need to deliver
whatever service you want across your vacation. That’s why we have the persistent
connectivity and the connected crew.”
Tools, not gimmicks
In March, MSC will add a voice-activated personal assistant
to its MSC for Me platform.
Every cabin in the new MSC Bellissima will have the
device, known as “Zoe,” that the cruise line developed in partnership with
Harman, a subsidiary of Samsung.
We needed to simplify the operation and simplify the experience in order to make our passengers really appreciate the time they spend on board the ship.
Luca Pronzati - MSC Cruises
To accommodate MSC’s international audience, Zoe will
be able to interact with guests in seven languages: English, French, Italian,
Spanish, German, Brazilian Portuguese and Mandarin.
Pronzati says his team
engaged more than 400 people representing each of those nationalities in order
to train the AI to understand accents and to create the questions, totaling about
2.5 million, that Zoe is equipped to answer.
And by
next fall, Pronzati says he expects to make improvements to the AI so the
system can learn from passengers’ past interactions.
“By
knowing who you are, what you prefer, what are your expectations are, we will develop
a tailor-made experience for you,” he says.
This type of smart personalization is also part of Carnival’s
OceanMedallion platform. Guests receive “experience invitations,” generated by intelligent
algorithms that continually analyze both what guests have indicated as
preferences and what they have actually been doing onboard – for example classes
taken or food and drink consumed.
“You are connected to us persistently so we learn real
time, all the time what you want most and the type of a vacation you are engaging
in,” he says.
“And then our focus is to maximize your vacation
experience … based on your actions. You don’t need to retell us. It creates this
amazing dynamic, which is the more you engage in the experience, the more the experience
gets great for you.”
Offshore
issues
Padgett came to Carnival from Disney, where he led the
creation of the MagicBand, among other innovations. But he says it has been
much more challenging to create similarly smart, interactive technology for a
cruise ship.
“The hardest places to connect in the world are the oceans,
so solving connectivity to be land-based with respect to performance and
reliability is a big one,” he says.
“The other is maritime environment is extremely harsh. So
when you think about creating advanced technology to survive in that environment,
you have to put a lot of effort into that.
"The other [challenge] is the cruise
ship never stops, except for a couple weeks every three years. So you have to transform
a complete operation in real time without ever disrupting or keeping the ship
from sailing. Overcoming those three challenges has been great.”
And then there’s the issue of human resources to manage the
technology. Pronzati says the development of MSC for Me has required the cruise
line to invest in training for onboard staff.
“From a maintenance standpoint, whatever we select as the
technology, we always do take in to consideration that the ship is sailing and
therefore you need the right balance between innovation complexity and at the same
time the level of skill set you need to have on the ship to manage this kind of
technology,” he says.