The luxury cruise ship business has been hit harder than almost any industry during the pandemic. Fleets of huge and expensive cruise ships are stuck in harbors around the world.
But Carnival hasn’t given up. The owner of cruise ship lines such as Princess Cruises has continued to retrofit its fleet of ships with Medallion Class experiences, meaning it is outfitting the ships with internet of things capabilities so they can serve up an outstanding time for guests when — and if — those ships can ever get out of the harbors again. The fleet is more than 100 ships, and 11 of them are outfitted now. By the end of 2021, Princess expects the whole fleet to be ready.
It all revolves around a wearable called the Ocean Medallion. First unveiled by Carnival CEO Arnold Donald at the CES 2017 tech trade show, the Ocean Medallion has been in the works for years. I saw what the Medallion enabled for passengers aboard the Royal Princess ship when it was docked in San Francisco last year.
The Royal Princess was one of the retrofitted Princess cruise ships that have been upgraded with more than 7,000 sensors, 4,000 interactive digital portals, and a couple of datacenters. Those devices are connected with thousands of guest smartphones and Medallion wearables. And they are synchronized through multi-constellation satellites to the cloud.
Cruise ships were previously self-contained as far as computing went, but now they are backed up on the cloud. The wearables let you order a drink and have it delivered to you anywhere on the ship. They also let the cabin crew know when to make up your room because they can see whether you are inside. And it enables better safety because the captain can keep track of every person on the ship in case there is ever an emergency. Those ships are a microcosm for what the world will be like when everything around us is smart and trackable.
I spoke with Carnival chief experience and innovation officer John Padgett, who said the company added five more Medallion Class ship upgrades during the year. But it hasn’t been easy, as the ships can’t be moved and the staff available to upgrade them has to travel to the different ports.
Convincing people to go on cruises again will be another challenge, given the nightmares we’ve seen when COVID-19 spreads on ships. But Padgett said the company is doing everything it can to use technology to make the ships safer. Things like keyless entry and touchless communication are the norm on the Medallion Class ships. I’m going to watch this closely to see how it all unfolds. We’ll see if the cruise industry can take us back to a life where we all live happily ever after.
Here’s an edited transcript of our interview.
VentureBeat: How are things going for Carnival during the pandemic? I know the cruise industry has been hit so hard.
John Padgett: The trauma in the cruise industry is second to none. This has been absolutely devastating. Fortunately, the Carnival corporation had the strategic commitment to stay with the strategy of continuing to progress through the ships. In fact, we stayed completely on schedule. We transformed five ships this year, so now we have a total of 11. We’ll be finishing the Princess fleet here in 2021.
With guests not on the ships, it certainly makes it easier to transform the ships. That’s not an opportunity that you get very often. Or ever. What became a paramount effort was how to traverse the globe and access the ships. When you think about engineering talent, the supply chain, the equipment, all the individual countries having different restrictions around the world, how to navigate all that to get the team together to execute the job, that was not a little harder. It was exponentially more difficult. But it just became the challenge for the year. That’s what we did.
We’re coming back with more ships, but the biggest theme is the same technology and intelligence-driven experience that was being purely used to enhance the guest experience — they’re also the same tools that now make a ship more healthy and safe. As you know, more than most, it’s all about intelligence. Everything is about information. Everything is about intelligence. With Medallion Class fundamentally being built around individuals, guests, and crew, and all of those interactions driven by real-time intelligence, it puts you in a better position to respond to whatever the case may be.
VentureBeat: Were you able to try to accelerate the transformation of some of the ships? Or did the pandemic slow you down too much?
Padgett: We did not accelerate nor decelerate. We just stuck completely on our plan. We executed, in 2020, which is synonymous with this shutdown period, exactly what we’d planned.
VentureBeat: But I guess there was an opportunity cost to having a ship in harbor, not making any money.
Padgett: Exactly. Inherent to your point, the cruise ship transformation has tremendous opportunity cost if not precisely executed. That risk didn’t exist during that time at all.
VentureBeat: The way your teams work, did you have to do one ship at a time, or can you do more at once?
Padgett: The way we work, we work on between two and four ships, generally about three ships simultaneously at different depths. We have a first wave team that comes in and works on the deepest infrastructure, the compute, the storage, the connectivity, the networks, the physical equipment installation, IoT devices, all of that. Then we have the second wave, when you lay the digital experience across the ship and activate all the digital services and digital experiences on top of that. Then the third wave is the education and training of the crew. That becomes the true activation stage. On some of these ships, because the crew is very limited at this time, we’ll go back and reactivate the ship as the ship reactivates overall.
VentureBeat: Do you yet see any light at the end of the tunnel as far as when business can start again?
Padgett: There still seems to be a tremendous amount of uncertainty. I don’t have any more insight on that than you would. We’re hopeful, from what we’re seeing, that the vaccine will open up global travel and hopefully we’ll return to normal in the not-too-distant future. A lot is predicated on what the CDC ultimately decides. The fact that they’ve outlined preliminary conditions — all the brands are marching toward that. But there have been no definitive dates at this time.
The cruise industry is working diligently and aggressively to return to service. We’re somewhat separate from that because our ships will return to service as a part of the overall brand coming back.
VentureBeat: If it is going to be a long time still, do you operate on the same plan, converting ships as you can?
Padgett: Our 2021 plan was to complete the Princess fleet in its entirety, and we’re sticking to the same plan. Again, hats off to Carnival on that. Maintaining that consistent focus and staying with our strategy is a compliment to our board and our CEO. That’s key. Now the strategy yields a greater result. The intelligence that’s created to support decision-making on the ship as it relates to enhancing the experience and mitigating health risk is second to none.
VentureBeat: As far as rules that operate on ships going forward, does the technology help in some way now? Can you do things like enforce social distancing because you know where everyone on the ship is?
Padgett: Here’s how we think about it. The Medallion Class experience itself was created to be personalized and simplified location-based services. When you think about what that means, it means whatever I want, whenever I want it, wherever I’m at on the ship. I’m not moving in large groups in a traditional cruise format. In essence, the Medallion Class experience is very advantaged in all these requirements that came with COVID-19. They’d largely been accommodated by our experience design because we were always focused on creating that individual experience.
If you think about the rest of the world now, looking at everything we’ve done to adapt to closing businesses and capacity constraints and social distancing, many of those sound like what we’ve already done with our Medallion Class experience. We were fortunate to be well-equipped — I don’t want to say by design, although it was by design in regards to making things turn out great for our guests. But it also proved to be very accomodative to our emerging requirements.
VentureBeat: If you look at the competition, do you feel like you’ve gone ahead of them here? Is the whole industry making this conversion to new technology?
Padgett: It’s hard for me to tell too much, with the industry on pause. I know that Princess Cruise with Medallion Class is an industry leader by far in all these dimensions. We’ve stayed consistent with our strategy. I expect it will continue to be the apex in the cruise space. But there’s also no doubt that other lines are pursuing different connected experience types of technologies to head in the same direction. I’m just glad we’ve been working on it for six years.
VentureBeat: If you’ve done five ships this year, how do you do something like 90 ships next year?
Padgett: That’s honestly a hard one to comment on. That’s all about scale and manpower and things of that sort. The technology itself is infinitely scalable. It’s about the plan. The cruise industry, the impacts have been dramatic. Obviously, liquidity and cash are major concerns in the cruise space. You just have to plan very carefully. It’s not my space. But the company will plan all that accordingly.
VentureBeat: As far as the technology, has it moved forward as well?
Padgett: Absolutely. From a technology basis, we’ve advanced at every level. We’ve advanced our IoT equipment, where it’s cheaper, quicker, faster to install. We’re now on our third generation of Medallion, which is more efficient, more cost-efficient, more technologically effective. It has more inherent capabilities. We’ve advanced the entire fundamental ecosystem: hardware, firmware, software, and our ability to deploy.
On the experiential side, there are all types of enhancements and improvements that we’ve made across our portfolio. We haven’t introduced a new product per se. We have our core products, which is our media space, the on-demand services, the person-to-person wayfinding integration. We have overall guest view that provides real-time information to the crew for their interaction. We have the casino as it relates to mobile gaming or digital banking or your stateroom TV and the physical device.
Overall, what we’re doing is — the enhancements are more focused on a completely seamless ecosystem. Every product, service, and experience available on every digital surface, and everything aware of the guest so they can do more personalization and get better immersive experiences. Our investments are about reinforcing the ecosystem model because it’s paying off for us.
Many of these lines have a much more complicated landscape that they’re seeking. They have a mobile app, and that app is an aggregation of their different lines of business. The guests themselves — they don’t have an ecosystem built around the identity of the individual. Now they’re doing contact tracing with other tied devices, so now you have the complication of a wearable device that’s enabling your experience. You’re wearing it, but it’s not doing anything for you as the guest, while you use the mobile app for your other services. In some ways, it can get more complicated for guests on some lines. But with Princess and Medallion Class, we’re fortunate to not have to inherit that complication. The device does everything for the guest.
VentureBeat: On the enterprise side, I’m curious about how transformational it’s been for the company. How does all this data coming in from the ships change things?
Padgett: It’s fundamentally transformational. A ship was previously considered a disconnected platform. It comes into port. You load it up with supplies and provisions, guests and crew. Then it goes away. It’s fully self-contained. The notion of real-time awareness of everything going on in the ship was nascent in the crew space.
With Medallion connectivity and the amount of intelligence we create, all in real time, the biggest transformation is there are no blind spots in the execution and orchestration of a fully connected city. You’re not talking about a theater or a restaurant or a bar or a gym. It’s all there. For all of that to be connected, and to have awareness of all of that, all the time, anywhere in the world, that level of intelligence and insight fundamentally shifts your mindset. I can’t tell you the result of it, because it’s so fundamental, that level of intelligence. It’ll take years to digest.
VentureBeat: How does the conversation go inside the company, where you could have the people running your datacenter saying, “We have to store a lot more stuff. Why is this useful to the corporation? Why should we have all this information? How does it pay off in terms of more insight?”
Padgett: What you just pointed out is a big difference. The intelligence we’re generating is used in real time to advantage the guest and the operation in real time. It’s completely transformational, to use your word, compared to traditional business intelligence big data, where data is created and stored and then analyzed and put in reports to go back and potentially change the way decision-making is happening at the enterprise level.
VentureBeat: So in a sense, the ship is the datacenter, and that’s going to the crew.
Padgett: All the time. If you produce that data, you benefit from that data. I’m not sure I would be excited about a connected experience that didn’t benefit me. If it was benefiting the next person who was going on vacation a year from now, maybe? But the reason we have 99.7% of people participating is because the connected guest benefits from that connection in real time. They feel it. They see it. They realize it. That’s why the ecosystem model works.
If it was just about harvesting data to then run through data scientists and produce reports to management, I would question the power of that. I know that’s the conventional way it’s done with big enterprises, but I would argue that you have only a fraction of the value coming back to the actual guest in their experience with that kind of offline report mode.
The real-time effect has been amazing. I have an interaction with the crew member. The crew member notes that interaction and appends that to my profile. The next time I interact with a crew member I don’t have to reintroduce myself. They’re already aware of my preferences. It becomes so natural and so easy and so personalized. All that results in a higher perceived value to the overall experience.
You can’t really put your finger on it when you’re in the middle of it. But when you go back to the real world, you think, “Why do I have to have all this? My car keys, my credit cards, my loyalty cards, my phone.” Interacting with the world on a daily basis is very complicated. We just get used to it. All that complexity just drops out of our experience. It’s gone.
VentureBeat: On the AI side, with so many advances happening now, are you able to bring a lot of that into the ship operation?
Padgett: Where we’ve gone with that is the creation of a real-time digital clone to power decision-making. Academics and great software salespeople do a wonderful job of selling the power of AI. People think that if we just take big data and throw in an application, all of a sudden it will yield a personalized experience. But humans are extremely complex. Human preferences, desires, interactions — the complexity of it is beyond most people’s imaginations, unless you deal with it consistently.
We find that by using all of our intelligence to then create a digital clone, by which a human then has a view of the reality and can help direct and orchestrate actions, that’s much more effective. Do we have AI? Absolutely. But I’m never a person that says, “Drop in an AI package, plumb it to big data, and you’ll be successful.” It’s not that easy at the scale we run. And definitely when you’re dealing with humans.
Different guests have different personas on different vacations as they interact with different people. When they’re traveling with their spouse, it’s one thing. When they travel with their parents, it’s another thing. It could be a business trip. It could be with their college friends. All those things, the individuals change themselves. If you don’t have a human that can understand that and help orchestrate those interactions, you could mess up. Personalization is great until you get it wrong. Computers still get it wrong a lot.
VentureBeat: If there’s a message to consumers out there now from the company, what would it be?
Padgett: The consumer message, to us, is that we want to provide you with the best value vacation in the world. It’s personalized. It’s simplified. And now, more than ever, it’s safe. Everything we’re doing as it relates to our Medallion Class experience and driving that through this connected ecosystem is reinforcing maximum value for your vacation through personalization, simplicity, and always keeping you safe.
Personalization in this case is also giving the guest more control to decide how they do things on board, which is more important than ever. It’s always something we’ve emphasized because part of personalization is personal choice, choosing how they’re going to consume a product, service, or experience. We want our guests to consume experiences the way they want.
When we come back — when you think about the COVID-19 world, forgetting cruise ships for a minute, you think about what COVID-19 has done to businesses that provide consumer experiences. It’s going to create a giant divide. There will be one group that says, “Now I have to do all these things, so I’ll force my guests to do things this way.” They’ll be the ones that lose. There will be another group that says, “I need to provide more individualized experiences. I need to provide more choice, more access, more flexibility. I need to do all those things to enable the consumer to thrive in this post-COVID-19 world.” Those will be the people who win.
The challenges and restrictions and capacity constraints and all those things that people now have to consider with social distancing and monitoring capacity, you can deliver all of that in an artistic way that’s great for the guests, or you can deliver it in a heavy-handed way that is all about rules and regulations and restrictions. The great brands with connected experiences that can adapt to provide individual experiences will be the winners.
VentureBeat: When your customers push back and say, “How is it safer now?” what’s the answer you can offer? At least as it relates to the technology.
Padgett: To me it’s about enhanced information and real-time intelligence to deal with any situation. That’s what we have in our Medallion Class experiences. We have the connected guest. We can communicate with them. We can provide them services at their discretion, when, where, and how they want them. We don’t force any group settings. We don’t force lines. None of those things are fundamental to our experience. It’s about you. What’s comfortable for that guest within our ability to operate is what we’re focused on delivering.
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