The Sunshine Economy: Cruising And Commerce With MSC Cruises

Oct 15, 2017

Richard Sasso is a salesman. He punctuates a conversation about the cruise industry with a library of stories he has gathered over more than 40 years selling cruises. Hurricanes? He's experienced them. Business cycle changes? He's led companies through them.

 

He tells the story of how he got into the cruise ship business. Just out of college in the early 1970s and coming from an interview for a sales job with an airline, the elevator stopped on a floor where Costa Cruises had an office. Sasso says he got out, talked his way past a secretary and talked himself into a job. He would go on to be part of the team that launched Celebrity Cruises in 1990. Today, Costa Cruises is owned by Carnival and Celebrity is part of Royal Caribbean.

 

Sasso has been with MSC since it first started sailing part-time out of Port Everglades in 2004.

 

"I think our industry is a supply-driven industry. I think there's always room for something different, something fresh," he said on a recent Saturday afternoon aboard the MSC Divina.

 

The Divina is MSC Cruises North America's sole year-round offering for Caribbean cruises right now. In December it will be joined by the MSC Seaside, a year-old vessel the company boasts "was designed with Miami in mind." The Seaside is part of a much larger $10 billion decade-long ship-building bonanza that will almost double the size of MSC's global cruise fleet to 23. The Seaside is scheduled to be christened at PortMiami in December.

 

Sasso was joined by MSC Cruises North America President Roberto Fusaro for the interview. Fusaro moved to South Florida less than two years ago after running the company's South American cruise business.

 

WLRN: Why expand in South Florida?

 

Fusaro: The opportunities are huge. North America is the biggest cruise market in the world. And MSC is probably the best-kept secret in the cruise industry in North America. We're trying to have a presence that's in line with what we represent globally. And we think there's a big opportunity for a different cruise experience for the North American guest.

 

What does the competitive landscape look like as MSC looks to build out that North American presence from PortMiami?

 

Sasso: I think our industry is a supply-driven industry. I think there's always room for something different, something fresh. We're a family-owned company, so we really pay attention to quality and variety and innovation. And I think those components make us very competitive. I think the other guys are looking over their shoulders. I think we're going to compete very well here.

 

Roberto Fusaro and Richard Sasso on board the MSC Divina. In December, MSC Cruises North America will bring its second ship to South Florida.

  Since your competitors are large, publicly traded companies and MSC is private and family-owned, does that make the MSC business model different?

 

Sasso: I put blinders on sometimes. I'm not looking at what the other guy does. I know what we need to do. We need to invest, [decide] where the ships need to go, what kind of ships need to be there, what kind of itineraries we need, what partnerships we have to make. We invest the money readily. South Florida is the capital of the world in cruising. We need to make our home here, too.

 

How is business for the MSC Divina?

 

Sasso: Spectacular. It's easy to fill it up. It's not difficult to have a profitable operation on a ship like this.

 

It is a profitable operation here for this vessel [the MSC Divina]?

 

Fusaro: It is for sure. We are a family company, but that doesn't mean we are a charity. We are here for business and we are investing in North America because North America is very profitable for us and will be more profitable.

 

What kind of pricing discipline will MSC have on fares and onboard revenue?

Sasso: We are no different than the rest of them. I think that we're very disciplined and we're certainly eager to fill the ship up at the proper price.  But at the same time, [we're] also building a brand. So there is a need for us to be a little bit [more] flexible in who we may work with and how we may work with them and what kind of marketing we may put out there. I know the competitors always think a newcomer like MSC might change some of their pricing strategies for the industry. It doesn't work like that. We're just 2 percent of the market. So when we do something it shouldn't affect those guys even though some of them complain once in a while.

The new MSC Seaside is a ship that has been talked about being designed for Miami. Your executive chairman said, "We designed the ship with Miami in mind. When you drive from Miami to Miami Beach, you will say, 'What the hell was that?'"

Fusaro: It's a condo. If you look at the aft of the ship, it looks like a condo. It's an homage to Miami. It's also a way of having more outside space. It pays tribute to Miami. It won't be confused with any other ship in the world