MSC Cruises chairman Pierfrancesco Vago holds great optimism for his embattled sector, which has had one setback after another over the past two years.
First, a pandemic threw the entire industry into a two-year deep freeze that cost it billions of dollars in losses.
But just as Covid-19 seemed to loosen its death grip on cruising, Russia’s late-February attack on Ukraine sent trembles through the hearts of seafarers and cruise passengers alike.
“There has been a problem in the booking curve because [of] when the war hit,” he told TradeWinds on Tuesday during an interview at Seatrade Cruise Global 2022 in Miami Beach.
“It was a shock after two years of pandemic, but there was light at the end of the tunnel so that brought some people to the scene.
“We see that people are getting the news and the bookings are coming up closer to departure so we are getting closer to normal bookings again.”
Vago said MSC Cruises’ fleet has grown to 19 vessels, but the company is not in any race to become the biggest.
“It’s not a question of how big we want to get,” he said. “We are following the market. We think we are offering a brand that can be truly global.”
Arnold Donald-led Carnival Corp has 91 ships, while Jason Liberty-led Royal Caribbean Group has 58 vessels and Frank Del Rio-led Norwegian Cruise Line Holdings has 28 ships.
Vago said the pandemic financially hurt MSC Cruises, but the fact that it is privately owned by family-run MSC Group, which is also a parent of container shipping giant Mediterranean Shipping Co (MSC), helped to cushion the blow.
“We got financial troubles like everybody else, but our cash burn was very controlled,” he said.
Being a private company with a cargo division that did extremely well allowed us to be financially more comfortable than our peers.”
MSC surpassed AP Moller-Maersk this year as the largest container ship owner with more than 600 vessels.
“From there, we invest in infrastructure, terminals, railways, logistics,” he said. “Who knows? Maybe tomorrow in airlines.”
That is not to say that Covid-19 was not a very difficult challenge to overcome, he added.
“The pandemic is something that taught us a lot,” he said. “We invested in technology with filters and air circulation products.”
He said MSC Cruises exceeded Covid-related regulatory requirements by designing protocols that actually created a first for the industry.
“We created a bubble that guaranteed the control so that everything that was in that ship, that environment, was considered safe,” he said.
Playing it safe
MSC Cruises is handling safety risks related to the Russia-Ukraine conflict by keeping its passengers out of harm’s way.
“Our customers understand,” he said. “They ask us to move and we always ensure that there is a safety principle behind the experience of a great cruise.”
The cruise provider has stopped calling at Russian ports and has diverted itineraries instead to the fjords in Norway and other ports on the Baltic Sea.
Commenting on Carnival chief executive Donald, 67, passing the chief executive baton to chief operations officer Josh Weinstein, 48, after nine years at the helm, Vago said: “The youngsters are coming up. It’s just a question of the new energy, new blood. It’s just life.”
Carnival announced on Tuesday that Donald will become vice-chairman of the board of directors while Weinstein takes over operations as chief executive.
