As the Covid pandemic recedes into the rear-view mirror, we are getting a clearer picture of which hospitality trends will predominate in 2023.
As it turns out, whether by careful design or lucky coincidence, the cruise ship industry is hitting all the right notes in hospitality at the moment – to the point that property developers, urban designers, venue managers, hoteliers, and restauranteurs would do well to pay close attention to the in-demand amenities and entertainment programs offered on cruise ships.
In this article, we’ll look at seven things that cruise ships can teach the hospitality industry.
1. The Importance of the 20-Minute Proximity Circle
You can certainly be excused if cruise ships don’t come first of mind when you think of excellence in urban planning – but we’re here to set the record straight.
The newest generation cruise ships, such as the Celebrity Beyond, are essentially small cities on the water, offering unparalleled, best-in-class access to a vast array of hospitality amenities and activity choices – all within a 20-minute walking circle – which has become the holy grail metric for urban planners seeking to create a lively streetscape.
In fact, these large, modern cruise ships serve as an idealized model for building modern “entertainment districts”— by combining central “streetscapes” with social gathering spaces, entertainment venues, pools, gyms, spas, sit-down and casual restaurants, art galleries, gambling halls, retail shops, museum exhibitions, and cultural events – all within easy walking distance to residential living units, e.g. the cabins and staterooms on board the cruise ship.
Land-based property developers are seeking to create a similar high-density hospitality environment that creates the “buzz” that drives traffic and makes living in these areas so attractive.
Residential housing is the key element for creating the “20 Minute Proximity Circle” – in response, many land-based property developers are now seeking to revise local zoning laws to make it easier to convert under-utilized office space into residential units.
Other land-based hospitality sectors are seeking to enhance activity at the street level. For example, many restaurants are petitioning to retain the expanded sidewalk seating areas granted during the social distancing era of the pandemic to create a busy, inviting streetscape.
Hoteliers are also seeing an opportunity to create more informal social spaces to service the needs of the local community.
And the flexible workspace provider Industrious, under the leadership of Jamie Hodari, is seeking to bring branded amenities, such as shared restaurant access, to the office buildings they manage under contract – to build attractive working environments where people will want to come back to the office.
2. The End of Single-Use Spaces.
The next lesson that the cruise industry can teach the hospitality industry is the importance of flexibility in space planning.
Thanks to clever design and mobile furniture solutions, many facilities on board cruise ships can transform their functions throughout the day or week to accommodate a fast-paced schedule of programs and activities. For example, restaurant areas can change from casual quick-serve breakfast venues into evening-oriented specialty restaurants, perhaps even transforming again to a late-night bar setup with live music and dancing. In a similar vein, large auditorium-style meeting spaces can host lectures, cooking demonstrations, and cultural events and can transform themselves into venues for traveling Broadway show productions, music concerts, or ballroom dancing.
In other words, thanks to their inherent need to do “more with less” space, cruise ships have already achieved what J.F. Finn of Gensler architects calls the end of single-use spaces.
“You’re doomed if you’re doing single-purpose, single-use spaces, and even single-use buildings because you’re not leveraging the accretive value of the real estate. Real estate is so valuable now that you have to maximize the use of that asset, and maximum utilization comes from people and experiences.”
—J.F. Finn, Mixed Use & Retail Centers leader, Gensler
3. Create Memorable Experiences Catering to the Attention Economy
The pre-pandemic trend of the younger generation “Instagram-era” consumers spending money on experiences (and less on outlays for consumer goods) continues apace.
Indeed, this YOLO (you only live once) trend appears to be spreading to a broader demographic, thanks to pent-up demand accrued during the pandemic to fulfill longstanding travel plans and experience new things.
Cruise lines are stoking this demand by creating customized tiers of destination options served up with unique onboard activities and offshore excursions.
Key aspects of this broader hospitality trend include:
· Set Jetting
Traveling to locations inspired by social media influencers or the filming locations of popular movies or television series – such as the highly popular cruise ship excursions to the sets of the Hobbit and Lord of the Rings movies filmed in New Zealand.
· Taking The Road Less Travelled
Travel to “undiscovered” locations or have unique experiences (often for social media bragging rights). These can range from mainstream ships offering “zip lines” over the canopy of rainforests to traveling on more exclusive smaller ships visiting out-of-the-way “undiscovered” locations.
· Wellness
Spa services on ships are not new, but some cruise lines are taking wellness programs to the next level, reflecting strong demand for yoga, spiritual mindfulness, and healthy living.
· Cooking
Cruise lines are also responding to increased demand from customers wanting to experience authentic local food and wine traditions. Many ships have created demonstration kitchens staffed with trained chefs to teach culinary arts as well as offering port excursions to experience local food markets, restaurants, and wineries.
4. Building Loyal Community with Seamless Customer Experiences
Cruise lines have been able to create seamless customer experiences that are the envy of many land-based hospitality operators.
Of course, cruise lines have some advantages to start with. For example, once you board a ship, they have nearly complete control of your onboard activities (the only escape from this “walled garden” is when guests choose to explore the port of calls on their own).
Cruise lines have had great success following an all-inclusive pricing model – with some notable exceptions, such as extra cost packages for drinks, wifi, and excursions at ports.
They have also been able to establish different pricing for increasingly higher levels of service and exclusivity – either by creating multiple cruise line brands that cater to different customer demographic targets – by creating a more exclusive ship-within-a-ship experience, such as The Haven by Norwegian Cruise Line.
Technology is playing an increasing role in creating this seamless customer experience. Princess Cruises provides customers with an electronic medallion to streamline onboard purchases and tickets, while other lines have created sophisticated smartphone apps – allowing you to book restaurant or entertainment venue reservations, order room service, pay for drinks at the bar, etc. and have any ancillary charges, such as gratuities, charged to your account.
It may be a little harsh to compare this with land-based entertainment venues (unless your name is Disney), but to be honest, electronic concert tickets sent in email, restaurant menus accessed with a QR code, and ‘buy 10 get 1 free’ customer loyalty program can feel utterly backward compared to the unified customer experiences many cruise lines now offer.
We recognize it’s difficult for many land-based hospitality operators to invest, particularly after the near-death economic straights experienced by many during the pandemic.
It’s also more challenging for hospitality companies with separate ownership to break out of their silos and work together to create integrated offerings (such as combining a sports ticket with a dinner reservation, hotel room, and parking), but not doing so probably means leaving money on the table – as well as a missed opportunity to cultivate a more loyal customer community.
5. Rebalancing Offerings to Focus on Amenities that Matter the Most to Customers
You may have noticed that hoteliers were the first to cut back on housekeeping services – before the pandemic, linens and towels were changed less frequently in the name of saving water, a trend that continued during the pandemic to minimize exposure between guests and staff. Given the current reported shortage of housekeeping staff, many hoteliers have made these cost-saving changes more or less permanent.
There is a similar phenomenon taking place on cruise ships.
On many lines, housekeeping services are now limited to once per day.
There are other changes afoot, especially on the more popularly priced cruise lines, as they seek to recoup from major losses during the pandemic and adjust to higher inflation, particularly on food items.
We may look back on the pre-pandemic era as the golden age for low-cost cruising, now that cruise lines are adding extra fees for things like second entrees at their restaurants and higher suggested gratuity payments for the staff.
While old-time customers may foam at the mouth in outrage on internet Cruise forums, new cruise customers are not missing what they didn’t experience in the first place. Cruise lines recognize this; they may lose some of the older customers due to the changes, so they are focusing their efforts on building a new customer base of ‘new to cruise’ clients who still see lots of value in cruise vacations.
In corporate consulting speak, you could call this right-sizing the value proposition, e.g. judiciously cutting back on some expensive amenities. The more cynical among us might call it by other names, such as shrinkflation.
But cruise lines are pointing the way for the hospitality industry that is trying to thread the needle to contain costs while still providing the experiences that will create repeat customers.
Land-based hoteliers are also facing similar inflationary pressures; for example, consumer demand is on the rise for 2 and 3-star hotels, while bookings for luxury 4 and 5-star properties are flat to declining as customers rebalance their budgets and travel priorities.
6. What is More Important in the Hospitality Industry today, CX or EX?
Southwest Airlines was one of the first major hospitality companies to break the “customer is always right” mold with their longstanding corporate mantra that employees come first, customers come second, and shareholders come third.
(After their IT meltdown over Christmas 2022, Southwest might do well to make IT infrastructure another one of their top priorities, but we digress…)
So, are we seeing a rebalancing of priorities in hospitality between advancing the Customer Experience (CX) and improving the Employee Experience (EX)?
The answer appears to be yes, with more hospitality operators seeing the need to invest more in “back of the house” operations.
There are several reasons.
Employee safety is now a major concern. Since the pandemic, bad – even dangerous — customer behavior has become a safety issue in the air, on the ground, and at sea.
In the case of cruise operators, there is increased investment in security operations to protect the safety of the crew and the passengers.
Passengers are screened for weapons at boarding. Security cameras are everywhere on the ship, and they are actively monitored to quickly identify dangerous behaviors – ranging from customer fights to climbing onto prohibited areas, to signs of dangerous intoxication, or indications of potential suicides.
Cruise operators are also creating education campaigns to alert customers long before they board the ship that there are new zero-tolerance policies for bad behavior, including bringing or using illicit drugs on board.
Employee recruitment and retention is the second reason that the Employee Experience is becoming more important.
With record low employment in the US, the hospitality industry is having to up its game to attract workers. This includes upgrading back-of-house work environments, many of which were sorely neglected for decades at many properties.
When prospective employees have so many available options for employment, employers need to create an attractive, welcoming work environment where workers feel comfortable and respected.
7. Hard Lessons in Sustainability and Environmental Stewardship
Take only photos. Leave only footprints.
Cruise lines have also found themselves at the front lines in disputes over issues of sustainability and environmental stewardship.
Cruise lines have many critics who maintain that
- Mass tourism overwhelms small ports or environmentally sensitive areas with thousands of tourists at a time. Venice, Italy, and the narrow Norwegian fjords have (or plan to) ban large cruise ships from docking.
- The use of dirty bunker oil (aka heavy fuel oil or HFO) to power ships at sea contributes disproportionately to dangerous air pollution.
- Cruise ships can introduce invasive species to ports, a practice known as biological fouling (or biofouling for short). Recently New Zealand and Australia banned certain ships until their hulls were scraped clean of invasive organisms to prevent environmental damage.
Cruise lines are keenly aware of the need to become champions of sustainability and environmental stewardship to survive.
For example, MSC recently took delivery of the MSC World Europa, the company’s first LNG-fueled cruise ship fitted with fuel cell technology.
Cleaner burning fuel sources and the inherent lower energy use of ship transport (compared with aviation) may help position cruising as a more environmentally favorable mode of travel compared to the aviation industry.
Each sector of the hospitality industry will need to do its part to increase sustainability efforts and communicate its environmental records to a customer base that is increasingly concerned with reducing the impact that travel and hospitality impose on the world environment.
Formaspace is Your Partner for Better Hospitality Environments
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Talk to your Formaspace Design Consultant today and see how we can make your next construction project or remodel a success.
