Sustainability versus customer experience?

Arnie Weissmann

The mini-debate last week at the Seatrade Cruise Global conference between Norwegian Cruise Line Holdings CEO Frank Del Rio and, well, everyone else onstage injected a moment of discord into what was otherwise a display of perfect comity.

CLIA chairman and executive chairman of MSC Group’s cruise division, Pierfrancesco Vago, had set the tone, citing environmental progress made by lines and noting the need for sustainable fuels to supplement other efforts to reduce carbon emissions.

Del Rio didn’t take an anti-environmentalist stance — “I think everyone cares [about sustainability] to some degree,” he said — but followed up by stating that the industry’s green focus might come at the expense of what he called “the purpose of the cruise industry”: to provide great vacations. 

No one onstage disagreed that customer experience is central but neither did they line up behind Del Rio. Rather, they suggested he should line up behind them.

“We need to sing from the same songbook,” said CLIA CEO Kelly Craighead, who pointed out that emphasizing the industry’s sustainability efforts will help in lobbying for regulations favorable to the industry.

Along the same lines, Vago suggested that if there was an industry shortcoming on the topic of sustainability, it was that they didn’t always effectively communicate steps they’re taking.

In support of his position, Del Rio challenged the notion that the industry will be rewarded for its environmental efforts. “Will they pay for it?” he asked.

In business, that’s hardly an unusual standard for measuring the worth of an initiative. And in every poll I’ve seen, the percentage of people who will pay more for greener vacations barely breaks double-digits.

But I’m not sure his question is the right one in this instance. These days, visible dark smoke coming from a stack will have an impact on many customers’ experiences. Passengers stating that they don’t want to pay extra for a green trip is not the same as saying they don’t expect companies that provide vacations to take significant steps to reduce their impact on the environment.

To Vago’s point about messaging, I recently came across a surprising story that demonstrates at least one aspect of how seriously the industry is leaning into advanced clean technology. It didn’t have to do with emissions but with waste discharge, a subject that has caused PR headaches for the industry over the years.

Nineteen months after the pandemic was declared and while cruise ships were still under a CDC no-sailing order, Alaska’s Department of Environmental Conservation (DEC) collected water samples in ports and common corridor transit lanes to “help us better understand local water quality and the impact of cruise ships … on our environment,” commissioner Jason Brune said.

After sampling 19 ports, the department came up with a surprising conclusion: The water quality had, in some instances, deteriorated significantly in the absence of ships.

How can that be? It turns out that the permitted discharge limits for community wastewater facilities in Southeast Alaska can far exceed those permitted from cruise ships. For example, the federal Environmental Protection Agency has allowed some wastewater facilities in Alaska to discharge up to 1.5 million fecal coliform colonies per 100 milliliters of water, whereas large cruise ships can release no more than 40 such colonies per 100 milliliters. During the pandemic pause, cruise ship’s wastewater discharge no longer diluted the negative impact of land wastewater discharge.

In writing about that finding in an opinion piece for the Juneau Empire, Brune also noted that ongoing ship inspections during the pandemic found a much higher incidence of environmental violations among small (50- to 249-passenger) cruise vessels than large ones.

Despite advanced wastewater treatment technology, however, the industry’s record in Alaska waters is not perfect. The 2022 Annual Compliance Report — Cruise Ship Wastewater issued in January shows that 24 notices of violations were issued to large ships for exceeding effluent limits when discharging. None were serious enough to warrant a monetary fine, but all were recorded in the vessel’s compliance file, to be reviewed should violations recur.

It’s no surprise that Craighead, as head of CLIA, has an eye on the impact that environmental efforts can have on regulations. But Del Rio’s question about guests, and their willingness to pay for a greener experience, suggests he wonders if there’s the same return on investment in sustainability versus, say, putting a racetrack on the top deck of a ship.

Perhaps neither the racetrack nor reducing emissions, however, should be uncoupled from the industry’s efforts to attract new-to-cruise customers, a campaign focused on the lifetime value of a customer rather than a shorter measure of return on investment.

Seventy percent of 18-to-34-year-olds say they “worry a great deal/fair amount about global warming,” versus 56% who are 55 or older.

Unless the industry wants to cede these cruising virgins to ecoresorts, sustainability must share the stage with customer experience. 

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