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Inchcape Shows Strong Leadership in Response to Cruise Crisis

The 2,695-passenger Cunard flagship Queen Mary 2 (built 2003, refitted 2016) maneuvering in the port of Valparaiso in Chile / Credit: Inchcape
The 2,695-passenger Cunard flagship Queen Mary 2 (built 2003, refitted 2016) maneuvering in the port of Valparaiso in Chile / Credit: Inchcape

By The Maritime Executive 01-12-2021 10:19:28

[By: Inchcape]

“Inchcape has been ahead of the curve on key responses to the Covid-19 pandemic and to embrace change for a better future both for cruise lines and destinations,” says Inchcape Shipping Services Global Sector Head for the Cruise Industry, Grant Holmes.

Cruise industry veteran and entrepreneur Holmes joined Inchcape Shipping Services in 2014 tasked with developing a comprehensive cruise strategy to harness the company’s global port agency network. He brought a wealth of international experience from tourism management and cruise operations, and running his own consultancy and training company. Based out of Dubai, he spearheads Inchcape’s global Cruise Solutions team, overseeing around 9,000 cruise calls per year as well as consultancy, shore excursion, ground handling, surveying, crew logistics and bunkering services worldwide.

Here Holmes talks about the devastating effects of the Covid-19 pandemic, his outlook for the industry and how ISS can support cruise lines and destinations going forward.

“2019 was one of the best years ever for cruise. And 2020 was widely projected to be even better year,” says Grant. “Then came Covid-19 and by mid-March the pandemic had paralyzed the sector. Inchcape Shipping Services stepped up to repatriate passengers and help with technical calls.”

With passengers safely home, Inchcape started crew repatriation working closely with cruise lines and port authorities, subsequently exploring possibilities for economical layup and anchorage on a global scale. Most ships have been dormant ever since, apart from some low-capacity blue cruises in Europe in the summer and fresh activity in Asia.

Fluid situation

Most cruise lines are not planning to restart services until spring at the earliest given global health concerns, and most likely 2022 on any significant scale. CLIA members determined a voluntary no-sail order until 31 December, but, as just stated, the actual start date will be later, and for US operators it will likely be Florida or southern sates only in the beginning, with calls to private islands and perhaps the Bahamas, with limited capacity.

Cruise lines will need to pilot Covid-19 protocols to generate confidence, with an estimated 50% capacity initially. There will be quarantine for joining crew, social distancing, masks, crowd limitation and full sanitization. Robust HACCP- and USPH-based protocols were fortified since Norovirus was brought under control, so cruise operators are well prepared to go the extra mile on sanitation.

For destinations, the priority used to be security, but is now moving to health threats post-Covid-19. Those dependent on cruise tourism will have to build trust through strict protection measures. Protocols must be in place both for port operations and excursions, including attraction sites and transportation means.

The Vanilla Islands Indian Ocean region have asked Inchcape to develop a system of health management that can be applied to whatever potential cruising health threats emerge in future. Ship audits are also considered to be an essential element to maintain optimum preparedness.

Pent-up demand

Holmes believes consumer trust will return reasonably quickly, however 2021 will be a transitional year. “Cruise lines themselves did not lose trust. A significant number of passengers opted for vouchers instead of refunds for cancellations in 2020 – which extended up to 75% for niche operators – showing there is a lot of pent-up demand. Passengers on pilot cruises in the summer felt safe in their on-board bubble, but the biggest issue is travel itself and getting to the ship. With the constant generation of fear-based news in the mass media, people have been scared to leave their front doors.”

Structural change

No one wanted Covid-19, but as with every crisis there is an opportunity. As an industry, cruise needs to seize it. The industry needs to reinvent itself, initially focused more on the allure of the sea, nature ashore in wide-open spaces, on-board offerings and private islands. Mega-ships should focus on private islands and marquis ports with sufficient capacity, and not over-crowd them, Holmes says. Smaller destinations can be accessed by more sustainable niche operators in the Discovery, Luxury and Expedition sectors. There is a clear desire and trend to sail on smaller ships, which is evident in the growth of the Luxury and Expedition segments that offer a more customizable, personalised service, with unique opportunities for discovery in more remote places on Earth. Inchcape continues to help emerging destinations with operational compliance and advancing sustainable solutions in the Middle East, Southeast Asia, Central America, the Caribbean, Africa and elsewhere.

Building cruise solutions

When Holmes joined Inchcape in 2014, his task was to develop a comprehensive strategy to harness Inchcape’s global network. Although they had pockets of expertise, Inchcape were underutilized in cruise. He set out to understand cruise lines’ commercial context, what they wanted and expected of a shipping agent. Industry contacts told him they wanted more than a standard agent – one that could provide greater business insight and help in developing itineraries and solving destination-based issues – which is why Inchcape have focused on the full gamut of ‘Cruise Solutions’. Many agents are not always aware of the bigger picture, which makes Inchcape unique in its field. They have now grown from around 4,000 cruise calls in 2014 to approaching 10,000 calls in 2019 – representing around 10% of the global market.

Supporting lines and destinations

Inchcape are proactively developing leading-edge initiatives to support the industry in four key areas – sustainable cruise tourism development, holistic itinerary management (especially extended voyages and new destinations), crew logistics and business intelligence. Holmes believes this is a great formula. “We have become the go-to company for anything out-of-the-ordinary and emerging markets, where I believe sustainable cruising has a promising future. We are literally developing new cruise markets for the first time in Africa, the Middle East and India, and then serving them.”

Centre of Cruise Excellence

Inchcape’s new Centre of Cruise Excellence (CoCE) will be launched in Q1 2021. The CoCE will be based in Mumbai, consolidating Inchcape’s position in providing deep insight supported by the publication of weekly intelligence reports. The reports will feature everything from security warnings, health warnings, travel warnings, political reviews and port and marine updates to travel and tourism reports covering airports, airlines and holidays worldwide. The CoCE will include an itinerary management division, crew logistics management, cost control, feasibility, clearance, risk assessment and planning, as well as a hull survey and inspection service and measuring the quality/quantity of bunkering.

Inchcape have master mariners, technical professionals and teams that can cover multiple topics from marketing destinations, spacing in terminals for optimized operations to equipment and services provision. Grant points out that “with global ISO compliance, nobody else in the cruise industry has this kind of footprint. Our intelligence and consultancy services can especially benefit more niche cruise lines that have recently downsized”.

Disbursements process

Another rationale for setting up the CoCE was to build a best-in-class disbursement accounting (DA) process. Inchcape have streamlined the Cruise DA process to make life easier for the cruise lines, which are somewhat nuanced in their accounting processes. Inchcape’s approach is to apply the most efficient model possible for each respective cruise line regardless of size. They have trained their people accordingly, so they understand each line’s invoicing, how to manage discrepancies and to ensure swift payment and cash flow.

Crew logistics hub

Building on their crew logistics expertise – Inchcape transferred 98,000 crew in total during 2019 across all shipping sectors – the new Inchcape Cruise Crew Desk provides a 24/7 hub service for logistics and support with a single point of contact. Covid-19 emphasized the need for immediate crew repatriation, which can be complex and involve multiple agents. Cruise lines with fewer people in the office may no longer have the resources to handle this. If it happens again, Inchcape can provide everything they need at the global scale – and are the only company doing it in such a way, targeting 60,000 crew transfers from the first year of launch.

Strong cruise culture

Inchcape’s approach has changed massively over the last few years. They are now a strong cruise company with a strong cruise culture. They have dedicated cruise POCs (Points of Contact) in the Americas, Europe, Asia Pacific and MESAA (Middle East, Southeast Asia and Africa) focusing on regional strategy. The CoCE’s role is to ensure Inchcape delivers at a strategic level with consistency and full accountability.

Grant Holmes sums up that “recovery is just a question of timing and I am optimistic for the future, especially for 2022 when we are likely to see a full recovery. There are plenty cruise fans out there who can’t wait to get back on a ship. The key thing for our industry is to come back and get things right from the outset in regards to health management, operational efficiency and sustainability. Inchcape will be there all the way.”

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