MSC Cruises is expanding it's U.S. presence. Here's why

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MSC Cruises is expanding its footprint in the U.S.

The Geneva, Switzerland-based cruise line has announced further growth in America in recent months. It has been ramping up sailings from U.S. homeports and revealing a new ship designed with North American guests in mind, World America, which will debut in 2025. MSC opened the ship for bookings Wednesday, the line said in a news release.

“The only way to grow the way MSC Cruises wants to grow and to fill all these ships we’ve ordered is to accelerate growth in the U.S. market, because the U.S. market is the largest cruise market in the world,” MSC Cruises USA President Rubén Rodríguez told USA TODAY in an interview.

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We spoke with Rodríguez about the line’s continued stateside growth, new features on its World America ship and how the line tailors service for U.S. guests. This interview has been edited for length and clarity.

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Question: What has motivated MSC to invest resources in the U.S.?

Answer: People think of the U.S. cruise market as being relatively mature, and it is more mature, I guess, than China, for example, or maybe South America, but it still has a lot of upsides. Still, there’s a lot of consumers in the United States that have not cruised and are interested in cruising. So, there’s a lot of opportunity for the market penetration to grow.

And MSC wants to participate in that growth but to do it in a differentiated way. You know, targeting a consumer segment that we think is a particular fit with our brand.

Q: World America is tailored to the North American market. How did you think about this ship serving North American passengers, and how might it be different from other MSC ships?

A: The people we target in North America, the consumers we target, we call them cultured cruisers. It’s a large population, many millions of people, that are either past cruisers or people that have not cruised but intend to cruise, are excited to cruise. … They tend to be above average in education and above average in household income, but not wealthy – still upper middle class. … They love international travel. They love to immerse themselves in new cultures. They love to engage with nature. They are passionate about sustainability. And they engage in sports.

And in thinking about World America, we wanted to keep the aspects of the experience that are very international that those guests loved, but also introduce some features that are particularly relevant to American guests that are sailing in the Caribbean.

… When we asked the younger families that sailed with us in the Caribbean, “How can we do better? What can we offer that will make your vacation even better?” They really want to have a space where they can play together and relax together, families with kids. And they like to be outdoors, but they like to have shade. So we’ve created this area we call The Harbor on deck 20 that has everything.

Specifically, in terms of water play it has a fantastic waterpark with some VR experiences … . But then it also has dry play because they don’t all want to be wet all the time. So, it has an elevated trail course, like a ropes course, it has a zipline, it has games, outdoor games. And then it has, I think, five different areas for sitting, relaxing in the shade, because sometimes the kids want to play the parents want to be reading a book. It has these fun food trucks at sea that will offer casual dining. And in a pretty large area, it has a themed playground called the Harbor Lighthouse, and it’ll be a very colorful area.

A second example is that we’ll introduce our first Comedy Club. Comedy is a really popular form of entertainment for Americans, and we’re introducing a comedy club for the first time in our fleet in MSC World, America. And that’s something that, if you think about it, would be difficult to execute in Europe, given all the different languages and all the different cultures.

We also took some features that we already have on Seascape and Seashore, and we sort of amped them up because our American guests love them. Our Sports Bar is very popular, so we’re expanding it and adding more games like shuffleboard, because, in addition to watching sports on TV, they like to actually play games in the Sports Bar.

Q: Is World America tailoring service different to an international clientele than U.S. guests?

A: Part of it is an evolution we’ve been engaged in for years actually. I think it probably started in 2017 with Seaside, which was the first ship that the company developed for the U.S. market for warm weather cruising. Around that period, also, was when we brought in some new leadership for hotel operations for the U.S. market and our VP of U.S. hotel operations, Mark Zeller, joined. Even though he’s European, he had a long history of leadership roles in U.S.-based cruise lines, both contemporary and premium. And what we learned working with him, from feedback with guests, and trial and error, is that American guests really value very proactive service.

For example, if it’s an American family that’s having dinner, they like it that you proactively bring your basket of bread, that you proactively serve the water, that you proactively ask them, “How are you doing today? How was your day?” … That may not be universal in the United States, but it’s pretty common, whereas a lot of our European guests prefer service that’s a little less proactive, that’s a little less forward. They don’t like to chat as much, frankly. So, “How was your day? What did you do in port today in Cozumel?” that kind of engagement, that kind of warmth and friendly hospitality which a lot of American guests favor is not as favored. In fact, some Europeans can feel that that’s a little bit intrusive, actually.

So starting around 2017, we have deliberately been recruiting, training and coaching our service team members to engage in a more proactive way with our American guests. But it’s a delicate balance, because we’re still a brand that, particularly out of Miami, sails with a lot of Europeans, so they’re trained to adapt their behavior. And we don’t bring just any crew member to the U.S. For (a front of house) MSC crew member to be part of our ships in the U.S., they need to have gone through certain training and certain experience to be crew members.

The other part of it, which is kind of counterintuitive, because on the one hand, Americans like more proactive service, but Americans also like very casual service. For example, they like fast-casual dining options, so we have introduced more fast-casual options.

Q: What can MSC bring to consumers in the U.S., and how do you plan to compete with the lines that already have a loyal customer base?

A: The good news is that we don’t need to take guests away from the big contemporary lines to achieve our aspirations. … A lot of consumers have never sailed and are interested in cruising, so it’s frankly more about the industry stimulating that growth than it is about taking share from each other.

And the way we’re competing is twofold. One is targeting that audience that I told you about … And that demographic and psychographic, those groups may not be as excited about the brand propositions of some of the other brands. And then we’re targeting them because we believe we fit that. We have a very European heritage, European design, European merchandise in our shops, European-influenced dining in our main restaurants. We have a very international character to our cruises, not only what we feature on board, but our international disbursement of deployments.

Ocean Cay, our private island, is a marine reserve. Most private cruise destinations have waterparks and swimming pools and air-conditioned shopping arcades, and there’s nothing wrong with that. It’s a lot of fun. But that’s not us. … There’s no waterparks, no air-conditioned shopping malls. It’s very pristine, white sand beaches, gin clear water, paddleboarding, kayaking, snorkeling, very rich marine life … So, we are offering a vacation experience that emphasizes sustainability, that emphasizes international and cultural immersion, that has European heritage, and we do so targeting consumers to whom that appeals.

Q: This expansion is taking place against the backdrop of high inflation. How does that factor into your strategy?

A: We’ve made large investments to support our growth in the U.S. We’re investing significantly in sales and marketing, nearly tripling our marketing, because we need to build brand awareness. We’ve made big investments in infrastructure. (We’ve made) infrastructure investments in Ocean Cay, you know, we’ve added home ports.

Fortunately, it’s paying off. We’re seeing amazing growth. There are certainly challenges because our costs are going up, too. With inflation, our food costs are going up, our labor costs are going up, our fuel costs going up. Our costs are going up, but at the same time, we’re seeing remarkable demand for cruise vacations, specifically MSC cruise vacations.

In this wave season, just the month of January and February, we’ve had 2.7 times the guest bookings that we had in 2019, which was by far our best year ever before the pandemic. I’m talking about U.S. guest bookings. Now, naturally, we have more ships, more itinerary options, more homeports, so we better be growing, right?

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Our pricing is in some cases a little higher, some cases a little lower than 2019, but not materially different. And our pricing has actually been going up in the last six months, and it’s now roughly where 2019 was, and yet a lot of volume.

… Consumers are seeing very expensive airfare, very expensive hotels and resorts, and cruising is a great value proposition. Particularly if you live close to one of our ports, Miami, (Port) Canaveral, New York, you can take the train you can drive, you can avoid the cost of air (travel). You know, your meals are included, your entertainment’s included. It’s a great value, and despite the fact that the price of cruising is going up, it doesn’t seem to be going up as fast as airlines and hotels and resorts.

And you know, I’ve been in the industry long enough that I know that it has happened before that contemporary cruise lines actually can do better in a more economically constrained condition, because they offer great value. Consumers still want to go on vacation, but they don’t want to spend as much on vacation when they’re worried about economic conditions or inflation or recessions or things like that.

Q: What has the response been like from U.S. consumers so far?

A: It’s great. … We have large modern ships like MSC Meraviglia sailing out of Canaveral full. We really try to put our best foot forward, you know, a great ship going to a great destination like Ocean Cay.

And we’re seeing more and more guests, frankly, venture farther with MSC, which is exciting. You know, we’ve always carried quite a few Americans in the Mediterranean. That’s never been uncommon. But now, this winter, we saw a lot of guests booking MSC Europa in the Emirates and also some guests booking the Red Sea. We’re seeing a lot more guests booking next summer in Northern Europe, because we’ll have five ships including MSC Euribia, our newest ship that’s coming this June. Deploying those beautiful new ships in places like the Emirates or Northern Europe, or World America when it launches out of Miami, helps us attract those guests and they have a great time.