The Takeoff Episode 03: Why Team and Culture Matter for Travel Startups Sponsored This content is created collaboratively with one of our sponsors.
The cruise lines have realized that allowing its customers to communicate while traveling is good marketing and good business.
For cruise lines, the past 15 years have been a period of constant evolution around customer-facing communications and information technologies.
Where travelers once boarded cruise ships with the expectation of complete communications blackout from their daily lives, they now board with the expectation of total 24/7 connectivity — nevermind that they’re bobbing on the ocean, hundreds of miles beyond range of the nearest networks.
To meet customer expectations and drive brand penetration, cruise lines and their service providers are innovating communications and information technologies within a set of constraints that have no parallel in the land-based resort business.
To gain deeper insights into how cruise lines are adapting to the cultural shift toward mobile technology, Skift spoke with Bill Martin, VP and Chief Information Officer at Royal Caribbean Cruises, Ltd., parent company of Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, and European lines Pullmantur, CDF Croisières de France, and TUI Cruises.
Last week we released our new Skift Trends Report, The Rise of the New Connected Cruise which looks at how cruise lines are rethinking on-board connectivity to deepen relationships with cruisers as well as connect with future customers. Below is a short extract. You can get the full report for in-depth analysis and context, and interviews with CIOs of Norwegian Cruise Line, Royal Caribbean Cruises, and Carnival Corporation.
Skift: People are now used to 24/7 connectivity in their daily lives — at home, at work, and on the go. Yet the cruise industry has been saddled for more than a decade with very, very slow internet connections. What are you doing to address that problem to meet guests’ changing expectations?
Bill Martin: Connectivity is huge, and this is a story that’s interesting for us to tell because we’ve done an incredible amount of work in this space.
Several years ago, we started looking at new ways to build incremental connectivity on the ships. It was one year ago this month that we completed a transition of all our major, North American brands from MTN Satellite Communications to our new satellite services provider, Harris CapRock. By working with them and structuring how we connect our ships’ telecommunications differently, we actually increased the capacity to our fleet by about eightfold.
Skift: That’s a lot. What accounts for the big jump?
Martin: This really gets into regional coverage instead of per-ship coverage, and dynamically shifting capacity between vessels in the region — really just thinking about it very, very differently. And the result of that has allowed us to fundamentally change how we offer internet service. It also required us to change the software we use to grant access to the internet to our guests, and that will be completed over the next several months.
Skift: You’re talking about the portal software that guests access to get onto the internet, pay for their minutes, etc.?
Martin: Yes. The new software is actually software-as-a-service, delivered by cloud. The servers don’t sit on our vessels; they actually sit shoreside and use the same satellite link to drive connectivity, pricing, packaging, and so on. It’s already on eight of our vessels, and it’s very rapidly rolling out to several ships a month over the next several months.
So the bottom line for the guest is a faster, higher capacity connection to the internet — and, we’re offering it not at a metered price, but at a daily or weekly rate, which is a pretty significant change in our industry.
Skift: What would those daily and weekly rates be?
Martin: We’re charging about $179 for a 7-day package and, depending on the cruise, $49 to $59 a day, to have the entire day. That’s an unlimited connection for the day, but it’s obviously much higher than what someone would pay at a landside resort.
Part of the reason for that is that we still have to go through geostationary orbit satellites, and it’s only about an eightfold increase in the capacity [with the new Harris CapRock solutions]. While that’s enough capacity to give people unlimited daily or weekly connections, it’s still pricey.
But the story doesn’t end there. Even while we were doing the transition to the Harris CapRock environment, we’re also engaging a startup company by the name of O3b. It’s an acronym for the “other 3 billion” people on the planet who don’t have access to high-speed internet. And the idea that they came up with was to move the satellites closer to earth, putting them in what’s referred to as a low- or middle-earth orbit. And by moving them closer — almost four times closer than geostationary satellites — you can get a very focused, concentrated capacity, and because the distance has been cut down so dramatically, the latency [data transmission time] actually starts to rival the latency of fiber.
Skift: How does the new capacity compare to the old?
Martin: With what I’ll call “legacy” connectivity, the typical vessel has anywhere from one to as much as four megabits of download capacity per vessel, and that connection is shared across however many thousands of guests there are aboard the ship. And the latency is roughly 800 milliseconds, which is almost a full second of wait time for every package going across the internet. In the satellite communications game it’s really about the latency more so than the capacity, because the latency prevents you from being able to do a lot of things.
Fiber speeds are more in the neighborhood of 100. So, as you can imagine, that’s why the connectivity [on ships] is so bad. It’s slow, there’s not enough capacity, and it’s very expensive because the pricing is there to limit the amount of demand people will have for the product [so the system does slow to a crawl from overuse]. That’s why it’s priced the way it is, not because the cruise lines want to make a lot of money on it.
Skift: How about with O3b? How does that compare?
Martin: With O3B, we are now on board Oasis of the Seas only, in a test phase, and we’re seeing over 500 megabits in capacity coming down to the vessel, at a latency of about 120 milliseconds. So we’re getting incredible speed — and that’s even with steep look angles to pick up the satellite because there are only four in orbit right now.
Skift: What’s your plan as far as extending O3b coverage across your fleet and brands?
Martin: Right now it’s only on Oasis of the Seas. We are not selling it commercially yet. What we are doing is, each week we are offering it for free to a select group of guests, because as you can imagine, the technology is very new. O3B was designing for land-based installation, using ground antenna to track and acquire the satellites as they pass overhead — similar to a cellular network.
At sea, that becomes more complicated because not only do you track and acquire based on where the satellite is, you also have to track and acquire based on the ship’s movement, both in the water and as it moves from port to port. It’s a little more sophisticated algorithm — not terribly difficult, but it needs to be worked through.
Skift: Let’s pivot to that. People used to go on cruises to get away from it all. Not so anymore?
Martin: People want to be connected, and nowhere, we believe, is that more true than when they’re on vacation: The one time you want to be on social media, and sharing, is when you’re on vacation.
Whether you’re tweeting, or Instagramming, or sharing on Facebook or Pinterest or any of the other social media platforms, you want to show the pictures of the new experiences you’re having, whether you’re on the Flowrider surfing simulator, or rock climbing, or ice skating, or any of the other things we do on board.
But on cruise ships today, that’s limited because people don’t want to either pay the price or share it when they get back home, because that’s too late. In this real-time, right-now world, seven days after it happened is ancient history. People won’t bother.
Skift: Is encouraging social media sharing of the cruise experience an element of your push for better, more constant onboard connectivity? It seems like that could be a potential marketing goldmine.
Martin: Social media sharing is certainly a part of our thinking. We believe real time sharing — think of it as testimonials — of the amazing vacation experience we provide represents some of the best advertising possible.