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Visionary architect Stefano Pastrovich offers future scenarios for the cruise business

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Written by Teijo Niemelä Teijo Niemelä

Category: Top Headlines Top Headlines

Published: 13 May 2020 13 May 2020

How will the cruise market evolve in the age of COVID-19? Cruisebusiness.com caught up with naval architect and designer Stefano Pastrovich, who has answers, but perspectives. In fact he has three: for the short, medium and long term.

It is clear the COVID-19 crisis will be a watershed for the cruise and megayacht industries. And, Pastrovish tells us, t’s not just the ships that will have to change, but the very concept of what a cruise is itself.

The change will necessarily happen in stages, demanding short, medium and long-term perspectives and solutions.

These challenges will naturally involve the world’s leading naval architects and designers. They will not only be asked to solve the problems of social distancing on board, with a view to hopefully restarting the industry, but above all be called on to envision the future – because nothing will be as it was before.

Pastrovich, who has worked in naval architecture for 25 years, and is known for his inspired designs and radical ideas, sees the problem of the precautionary measures that will need to be adopted from two standpoints: communication and design.

The short and medium term

“From a communication standpoint," he says, "it’s not the vaccine that’s going to save a cruise company but the combined effect of the containment measures taken and how they are communicated. On the design side, on the other hand, those companies showing the commitment to invest in developing their fleets for this express purpose will also be perceived as safer even in the immediate term.”

What could we reasonably expect in the short term?

“The companies will need to adopt a coordinated design solution of minor changes for their existing ships that include lightweight or soft compartmentalisation into protected areas, the conversion of buffets into restaurants, the creation of small closed-off public areas using Japanese-type walls – only made using fabric so they’re easier to build and install, plus branded masks for all guests in addition to everything required for constant sanitising and cleaning. All this, together with the fall in contagion forecast for July and August, will reassure customers.”

Fabrics have always played an important role in Pastrovich’s designs. He has often used curtains to delineate spaces with the benefits of managing and creating plays of light, forming cosy areas without adding to a yacht’s weight.

He has also created tensile structures using highly technical fabrics to bring new kinds of versatile hangars to yachts.

Today, with the immense experience he has accumulated, Pastrovich understands how fabric could be a powerful tool for increasing the protection provided on ships in the same way that fabric masks limit contagion.

“For the cruise industry, I’m thinking of curtaining to divide areas, create routes and protect them," Pastrovish says. "The benefits are ease of installation and light weight, not to mention recyclability. Then there’s ease of removal for cleaning and reuse. And when the need for this partitioning is finally over, fabric can easily be repurposed. Last but not least, it’s a more cost-effective solution than wood and plexiglass.”

In the medium term, precautionary containment measures will also be implemented in ships under construction. “Here, too, we’ll see an approach of reducing the probability of contagion in tandem with communication. The changes will impact costs and delivery times but have an explosive impact on advance bookings for what will be perceived as ships that are “built ready-modified” for greater safety.”

Looking to the long term, Pastrovich sees even more exciting challenges and rewards:

“When it comes to designing new ships, I believe in disseminating the proposals of a task force of designers dedicated to solving any health-related problems that might emerge in the coming years.

And I’m not just thinking about the design of different areas on board but of new ways of living the entire cruise experience.”

The long term: the ship as a safe haven

Pastrovich responds to the demands of the times we live in by conceiving new scenarios.

“As much as we might hope for a cure and a vaccine, COVID-19 has launched us into a period of fear of contagion, haunted by memories of the lockdown. We need to move beyond that with a global vision of the future.”

Pastrovich’s vision takes the form of a design concept he calls the "protected ship," which conceives the ship of the future as an island, a totally secure place, a safe haven.

“There’s an immediate association between island and safety, which sees the sea as a protective barrier. This took me to the idea of designing a ship where the experience is lived on board, but in a natural environment. I’m talking of an experience inside a protected ship sailing in the most amazing parts of the world, where guests don't need to go ashore madly in the way they do today.”

What will these ships of the future look like? And what sort of people will the new cruise-goers that choose them be?

“They’ll be ships for travellers seeking a tropical island or new floating city, ships for those who appreciate luxury and Mediterranean comfort or Alpine panoramas. Travellers who want to combine science with the thrill of diving in a submarine to the ocean’s depths. Travellers who want to feel safe on board because they don’t feel safe on land.”

Pastrovich is envisioning much more than a simple new design of ship here. He’s thinking of turning the whole idea of a cruise on its head. The ship will no longer be a simple means of transport to reach destinations and then disembark there to enjoy the beauties of the landscape. It will instead draw the best of the outside world within itself into a safe, protected world of comfort. It will become the destination. A natural paradise. A total experience.

“The 'protected ship', the ship as safe haven, is no longer an object, but itself a place designed to function and be lived from inside. A vantage point from which to fully admire the panoramas in which it immerses you. So, our new cruise-goers will no longer feel the need to go ashore, because the experience happens on board, while sailing through or reaching the most amazing places on earth.”

Science fiction? In recent days the main cruise companies have been considering restarting their big ship cruises with itineraries that don’t call at commercial ports but at the private islands owned by the main players. The future has already begun.

Stefano's additional out-takes

– “We’re going to have to change the way we do things." That’s one of the most frequent refrains in this historic period. The cruise and yachting worlds are equally convinced of this.

– “The meeting point of these thoughts and my profession is that, as an architect, what I do best is resolve social development problems by transforming them into designs."

– The cruise and yachting markets could benefit immensely from such thinking, the viable contributions of experienced professionals.

– But ideas can only be viable when part of a “global vision."

– “For me, the global vision is the opportunity to design new ways of living on ships. It’s the possibility of being receptive to human development and thus a very positive opportunity in negative times.”

– The global vision is to conceive a lifestyle beyond the ship, beyond the experience of the cruise of the future.

– “Tomorrow it won’t be me that travels to the ship, but the company that comes to take me there in total comfort and safety. Of course, I’m pushing this future vision to an extreme. If we do ever get there, it will be in gradual steps. But we’ve already seen this happen in music, from the vinyl LP to the CD, iPod and now smartphone, from which we can access any music in the world and history.”

– It’s a change we’ll become used to.

– “Something similar happened across the world when visionary architects started designing “non-places” like shopping centres and car parks. At first it seemed absurd to drive to a non-place out of town to do the shopping. But it happened. And until a few months ago it was part of the wonderful normality that the virus has taken from us.”

Photos from top to bottom: Artist's rendering of 190-meter, 300-passenger X Resort Cruise Ship; Rendering of the club onboard 192-meter, 236-passenger X Resort cruise ship; Stefano Pastrovich

 

RCCL to offer $3.3 billion worth of senior notes

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 13 May 2020 13 May 2020

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping group, said that it has commenced a private offering of senior secured notes due 2023 and 2025 for an aggregate principal amount of $3.3 billion.

“The Notes and the related guarantees will be secured by 28 of the company's vessels and material intellectual property of the company. The obligations under the Notes and the related guarantees will be secured by the collateral in an amount not to exceed permitted capacity under the company's existing indebtedness,” RCCL said in a statement.

RCCL said it expects to use the net proceeds from the offering of the notes to repay its $2.35 billion 364-day senior secured term loan agreement with Morgan Stanley Senior Funding, Inc., as the administrative agent and collateral agent and the other lenders party thereto entered into on March 23, 2020.

“The Company expects to use the remainder net proceeds for general corporate purposes, which may include repayment of additional indebtedness,” it concluded.

RCCL plans to book up to $1.3 billion impairment charge in first quarter accounts

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 13 May 2020 13 May 2020

Royal Caribbean Cruises ltd (RCCL), the world’s second largest cruise shipping group, said it would book a large impairment charge in its first quarter interims and warns that future results would be impacted by increase debt service costs.

“For the three months ended March 31, 2020, we are finalizing certain impairment charges preliminarily estimated to be between $1.0 to $1.3 billion related to the impairment of goodwill attributable to our Silversea Cruises reporting unit and several of our vessels,” RCCL said in a statement.

Future profitability would also be impacted by increased debt service costs as a result of our liquidity actions, including our 364-day senior secured term loan and certain payments made in connection with the amendments to our existing indebtedness reported earlier.

“Our decision to suspend sailings of our global fleet through June 11, 2020 and the resulting trip cancellations have materially impacted the results of our operations. We have incurred and will continue to incur significant costs associated with cancellations as we accommodate passengers with refunds and future cruise credits; as well as assisting our crew with their return home, food, housing, and medical needs,” RCCL said.

The company continued by saying that although its cruise operations are currently suspended, it has incurred and will likely continue to incur significant overhead costs associated with layup of its fleet and enhanced COVID-19 related sanitation procedures.

“As we cannot control adverse media coverage and we cannot predict exactly when we will resume sailing operations, we are experiencing and may continue to experience weak demand for cruising for an undeterminable length of time and we cannot predict when we will return to pre-outbreak demand or fare pricing or if we will return to such levels in the foreseeable future<” RCCL pointed out.

“In turn, these negative impacts to our financial performance have resulted and may continue to result in impairments of our long-lived and intangible asset,” the company concluded.

Orlando Ashford to leave Holland America Line after more than five years

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Written by Teijo Niemelä Teijo Niemelä

Category: Top Headlines Top Headlines

Published: 12 May 2020 12 May 2020

Holland America Line President Orlando Ashford announced that he will be leaving the company at the end of May. Ashford, who heads the premium cruise line within the Carnival Corporation family of brands, has been at the company for nearly five and half years and led a rejuvenation of the brand through an emphasis on enhanced onboard entertainment, live music and culinary experiences.

Since November 2014, Ashford has served as president of Holland America Line, leading the award-winning cruise line's brand and business, including its fleet of 14 premium vessels which carry more than 900,000 guests annually to all seven continents. He oversaw Holland America Line’s sales and marketing, revenue management, deployment and itinerary planning, public relations, hotel operations and strategy. Recently he has guided the company through an unprecedented pause in global cruise operations that have been extended through the line’s planned 2020 Alaska, Europe and Canada/New England sailing seasons.

“Orlando has made a substantial contribution to Holland America Line during his tenure, bringing a renewed energy to the premium cruise line that was recognized with many awards and accolades,” said Stein Kruse, Group CEO of Holland America Group and Carnival UK. “His unique background as an innovator and global leader in human resources was highly respected in our organization and his dynamism will be greatly missed.”

“It has been an honor and a privilege to lead the evolution of the Holland America Line brand for more than five years,” said Ashford. “I can’t say enough about the talent and teamwork both shoreside and on board the ships that has driven our many successes over the years.

“Today, a global pandemic has impacted our industry in ways that are completely unprecedented,” added Ashford. “However, I believe it is human nature to travel and explore new places and cultures and meet new people. I have no doubt that Holland America Line will thrive again soon, and its guests will be ready when cruise operations resume. I look forward to being one of the first to sail.”

Prior to joining Holland America Line, Ashford was president of the Talent Business Segment for Mercer, the global consulting leader in talent, health, retirement and investments. Previous to Mercer he served as senior vice president, chief human resources and communications officer of Mercer's parent company, Marsh & McLennan Companies. Ashford also has held several other leadership roles earlier in his career with organizations such as Coca-Cola, Motorola, Ameritech and Andersen Consulting.

Ashford serves on the board of directors of ITT, Inc., Hershey Entertainment & Resorts Company, Positive Coaching Alliance, Virginia Mason Medical Center and Year Up, a year-long intensive training program for underserved young adults.

Ashford is often recognized for his leadership. For example, Ashford was selected by Seattle Business Magazine for the 2019 Executive Excellence Award, honoring the best-of-the-best leaders in Washington state business and community.

Ashford’s book, “Talentism,” examines how technology and human networks can help bridge the skills gap, improve business performance and lead to the betterment of society at large. He has a second book currently in development.