The head of the UK’s leading cruise operator David Dingle has predicted ships will continue to get bigger and that agents and the high street will always play a big role.
Speaking at an Institute of Travel and Tourism Odyssey Supper at the House of Commons last night, the Carnival UK chief executive also warned about the state of the UK and European economies.
He said he believed that we will continue to see a “economic shift” with a fast movement of wealth from west to east.
“And that will happen faster than wealth can naturally grow,” he said.
“There is only so much wealth to go around and as Asia is soaking up more wealth it’s got to come from somewhere – maybe we are feeling a little bit of that at the moment.
“For the future this country really has to look east to support its economic growth. We have to be inextricably linked with the part of the world where we have the biggest economic growth.
“Britain is, in comparison, a very small country. In my view it’s too small to go it alone.”
Dingle said the economics of running a cruise line means that, in order to hit the 10% payback that a $500 million investment in a vessel demands, they will have to get bigger and bigger.
He said the cost of fuel and new regulations on emissions are behind the move towards ever larger ships and that a 10,000-passenger vessel was technically possible.
The main factor limiting growth of ships was the development of on-shore infrastructure to cope.
Once a ship gets bigger than around 400 metres long there are very few berths that could cope with one of such size.
“Economies of scale is paramount and we have to slow down our ships to save fuel. That’s likely to mean that cruise ships will visit fewer ports and rather than being landmark ports they will be closer to home.
“In doing that the ship has to become more and more the main attraction, and that has to play into the hands of the bigger ships. This will be an industry of very large ships. It’s highly unlikely that we will have any small to medium-sized ships built again.”
Although Carnival Corporation is the world’s largest cruise operator, it cannot lay claim to operating the biggest ships, that accolade going to its main rival Royal Caribbean Cruises, which has two huge 5,000 passenger-plus vessels operating in the Caribbean.
Dingle turned to third party distribution, something the cruise industry remains heavily reliant on despite recent commission cuts led by Carnival UK, for his third and final prediction.
“There remains a big role for the third party independent travel distributor and there is definitely within that a role for the high street retailer for a long time to come.
“A third party distributor offers impartiality and choice not just one brand. What’s important [for the consumer] is demystifying this whole array of brands.
“Why not pay someone else to go and search the web and find the holiday you want? What a wonderful service for someone else to provide.
“A tour operator or cruise company can serve people in an online or call centre world but we cannot engage in a face-to-face world without owning a whole retail chain.”
Dingle described the prospect of owning a retail chain as “not a very wise thing to do”.
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