Carnival UK chief says cuts of agents’ commissions have hardened prices, reformed “suicidal” business models

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Written by Kari Reinikainen Kari Reinikainen

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Published: 13 December 2011 13 December 2011

Speaking at the annual Cruise Awardsonboard Cunard Lines Queen Mary 2 y, David Dingle, chief executive of CarnivalUK, admitted that 2011 “had not been for the faint hearted,” Travel Weekly.comreports on its website. The changes Carnival UK have initiated thisyear have included reducing commission from a tiered structure to a 5% flatrate and switching off Amadeus Cruise GDS distribution. However, Dingle was stated as saying the changesbrought in by Carnival UK this year had resulted in a hardening of prices andhe expected this to continue in 2012 when UK capacity was “stable”.

The company that operates Carnival Corporation& plc brands in the UK from its headquarters in Southampton has also movedto demand agents’ customers pay it direct as in the US, to reduce its risk inallowing agents to retain pipeline monies and stop agents bidding on its brandnames on paid search. Dingle told the audience of travel agentsthat Carnival had worked closely with some agents to avoid business models thatwere “tantamount to commercial suicide” favouring volume driven by discountsover profitability.

In a clear reference to Gill’s CruiseCentre which collapsed in June, he said Carnival was too late to help in onecase, but that they had been able to reassure agents that their price was “asgood as any other on the high street”. Indicating Carnival UK was prepared toadapt its approach, he added: “We still do not underestimate the scale of thechange and we are listening and giving advice and support to those agents whoare having to retune their business models.”

Justifying the commission cuts he said:“When an economy gets tough, consumers need price transparency more than ever.But it was hard for us to do this when effectively the last 10% of our pricingwas out of our hands. Now we have that control and higher pricing is comingthrough to the benefit of all of us.” For many agents the decision to getconsumers paying direct was more damaging than the commission cut, but Dinglesaid Carnival UK understood many agents relied on cash flow to run theirbusinesses.

But he said the cruise operator had to protectitself against an unknown level of risk in extending credit to agents. “Most travel agents are private companiesand so do not publicise their accounts. Because it’s hard for us to assess it’sbest for us to minimise the risk. “We need to work together to make sure allour objectives are met in a way that suits everyone. I recognise that 2011 hasbeen a tough year but I am sure that the benefits will start to come through in2012.

“The good news is that capacity across theUK cruise industry is stable, so now is the time to see growing demand acrossfixed capacity to maintain price rather than have more ships and risk downwardprice pressure. This to me is where we are going to getgrowth in 2012 – better pricing. Our booking curve has moved later but we feelconfident that the pricing will hole up even among those later bookers.”

Dingle said the operator’s early year'wave' campaign was designed to offer a better return on investment for theline and its agent partners. “I’m sensing we are reaching the bottom ofthe consumer confidence trough therefore we see perhaps the earliest signs of alift. If that’s true that’s perfect time for the wave,” the Travel Weeklyreport said.

Costa Cruises cuts emissions, increases recycling of rubbish

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Written by Kari Reinikainen Kari Reinikainen

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Published: 13 December 2011 13 December 2011

Costa Cruises, Europe’s number one cruise company, says it has announced impressive environmental and community-focused results in the sixth edition of its Sustainability Report.

Costa Cruises has also launched the Sustainable Cruise project, the world’s first shipboard experimental project for the recovery of organic waste, which is funded by the European Union and aims to prove the viability of recycling food waste, paper and packaging on board ships.

Key achievements from the latest report include a year on year increase of 26% on rubbish recycled in ports, a 34% reduction over three years in emissions of ozone-depleting substances, an 11% reduction over three years in CO₂ emissions and the extension of community-focused projects in Brazil.

The latest results come as further proof that Costa Cruises operates not merely in accordance with the established environmental compliance laws, but continuously strives to achieve wider objectives. Through a dedicated management and control system that goes beyond the scope of mandatory requirements laid down by local, national and international regulations, Costa Cruises aims to deliver pre-emptive solutions for improving environmental standards. 

The main results obtained in 2010 were as follows:

·         An increase of 26% year on year in the proportion of rubbish recycled in port: One hundred per cent of rubbish (solid waste including paper, plastic, glass and metal) on board Costa ships is sorted for recycling and landed in different containers, so that the rubbish can be processed accordingly by those ports where suitable onshore facilities are available. In 2010, Costa Cruises entered into new agreements to this effect, bringing about a significant increase in onshore recycling.

·         Costa Cruises’ commitment to the recovery and recycling of waste reinforced with a global first experimental project: Costa Cruises is the Project Manager of the Sustainable Cruise EU project, which was launched in September 2011. For the first time, a ship, Costa Pacifica, will aim to demonstrate the viability of treating organic food waste so that it can be used as compost or fuel. The activities on board will also include the recycling of packaging and paper. The Sustainable Cruise project, which will end in June 2014, is funded by the “LIFE” Programme, the EU’s funding instrument for innovative or trial environmental projects.

·         A reduction of approximately 11% in fuel consumption and consequently in CO₂ emissions (2007-2010): This reduction was achieved thanks to the implementation of various energy-saving measures on board, such as the use of ecological silicone-based coatings for the ship’s hull which enhances hydrodynamic performance and reduces the growth of microorganisms on the hull surface without any toxic effects. Other measures include the use of low power consumption LED light bulbs, installation of an automatic lighting control system designed to adjust the external lighting in accordance with the current sunlight intensity, energy-efficient HVAC (heating, ventilating and air conditioning) technology, optimising output with automated temperature control in the staterooms and public spaces based on effective need and the use of inverters to optimise the performance of fans and blowers in the engine room.

Costa Cruises’ efforts in this area achieved recognition on 25 November this year, when the Company received the ABB Energy Efficiency Award 2011. ABB is a global leader in power and automation technologies that improve performance while lowering environmental impact.

·         A reduction of 34.2% in the production of ozone-depleting substances from refrigerating and air conditioning systems (2007-2010): Steps taken on board included the continuous maintenance and monitoring of systems and the introduction of HFCs (hydro fluorocarbons) as substitutes for HCFC (hydro chlorofluorocarbon) refrigerants.

·         Costa Cruises became the first cruise line to take part in REPCET: In July 2010, Costa Cruises, through its partnership with WWF Italia, became the first and only cruise line in the world to take part in the pilot REPCET project, a reporting system aimed at reducing collisions between ships and whales while tracking their movements. Costa Cruises has been an official partner of WWF Italia for the protection of the sea since July 2005. In 2009, the partnership was extended with the objective of setting up a network of new marine protected areas in the Mediterranean. Testimony to Costa Cruises’ engagement in this area is its policy banning overboard discharge of bilge water (even when suitably treated) within the Whale Sanctuary, an area of the Ligurian Sea covering approximately 100,000km² with a particularly high concentration of Mediterranean marine mammals. Meanwhile, since 2005, Costa Cruises has been collaborating with the Joint Research Centre of the European Commission to find a new way of monitoring climate change in the Mediterranean, the company said.

Carnival promotes Captains Gigliotti, Cupisti to oversee newly formed departments

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Written by Teijo Niemelä Teijo Niemelä

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Published: 12 December 2011 12 December 2011

Miami-based Carnival Cruise Lines has promoted longtime Carnival employees Captain Gaetano Gigliotti and Captain Claudio Cupisti to oversee two newly formed departments within its marine operations division. Additionally, Captain Domenico Rognoni is taking on a new role as vice president of compliance, and environmental and occupational safety.

A 25-year Carnival veteran, Gigliotti assumes the position of vice president of nautical safety and operations, effective immediately. In this capacity, he is responsible for nautical safety of the line's 23-vessel fleet, including bridge procedures and port nautical operations. Additionally, the captains of the line's three Destiny-class, six Conquest-class and two Dream-class vessels will report to him. Gigliotti previously served as director of marine safety.

Cupisti, a 22-year Carnival veteran, will assume the role of vice president of marine safety and operations with fleetwide responsibility for all of the line's firefighting and lifesaving systems. Additionally, the captains of the line's eight Fantasy- and four Spirit-class vessels, as well as the current marine safety team, will report to him. Cupisti is currently serving as a ship's captain and will take on his new role beginning in January 2012.

The company will also enhance its internal auditing and compliance functions with Rognoni, a 31-year Carnival veteran, assuming the role of vice president of compliance, and environmental and occupational safety. Previously, Rognoni served as vice president of safety, environmental and quality assurance. All three positions will report to Martin Landtman, Carnival's senior vice president of marine operations.

"We are extremely fortunate to have these highly experienced and talented professionals taking on new and expanded roles within our marine operations area and greatly look forward to their contributions as we continue to evolve these very important functions within our organization," Landtman said.

Carnival is "The World's Most Popular Cruise Line(r)," with 23 "Fun Ships" operating three- to 16-day voyages to The Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, Panama Canal, Canada, New England, Bermuda, Europe, the Pacific Islands and New Zealand. The line's 24th ship, the 130,000-ton Carnival Breeze, is currently under construction and scheduled to debut from Europe June 3, 2012.

Sovcomflot eyes cruise industry as possible new offshoot

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Written by Christer Gorschelnik Christer Gorschelnik

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Published: 12 December 2011 12 December 2011

Sovcomflot, the Russian state owned tanker company, sees cruise industry as a potential direction to diversify the business of the company. “This is interesting (cruise industry), this could be something for us in the long run,” a senior Sovcomflot executive told Cruise Business Online at a trade show in St Petersburg earlier this autumn.

The Russian economy has expanded rapidly in recent years due to high raw material prices and various cruise lines have tapped the Russian market. However, the country does not have a national brand that would solely target the Russian market at the moment. Earlier this month, Sovcomflot signed a contract with the Arctech shipyard in Helsinki for the construction of three ice breakers. The yard is a joint venture of STX Europe, which is part of the STX Business Group in South Korea,  and United Shipbuilding Corporation, the Russian shipbuilder. Sources say the order could be increased to 15 vessels over time.

In other developments, St Peter Line, the St Petersburg based cruise ferry company, is looking for a second hand vessel that it would operate in the Black Sea and the Mediterranean, with the Russian source market as target. At the moment, the company operates two second hand cruise ferries on year round services that link St Petersburg with Helsinki, Tallinn and Stockholm.

The Transtec  2012 trade show in St Petersburg that will run from 2 to 4 October next year will include a seminar called The Cruise Market and Russia - Expanding Horizons, with an aim to promote the development of cruise industry in Russia.  Cruise Business Review will be the only publication focusing on the cruise industy that  will be distributed to all delegates at the event.