CES 2020 Preview: How Carnival Uses VR and AI Aboard Cruise Ships

Delta Air Lines will become the first major airline to give a keynote at the Consumer Electronics Show, but it isn't the first travel brand to make waves at the annual tech dog-and-pony exhibition in Las Vegas. In 2017, Carnival Corporation's CEO Arnold Donald unveiled the Ocean Medallion, a tiny, coin-like wearable device that connects voyagers to various hospitality amenities throughout a cruise ship. Think of it as a key that unlocks a "smart ship" to make your trip easier. For example, it allows guests to track their loved ones aboard a ship, open their cabin doors, and even order a margarita and have it brought to them, wherever they are on the ship. John Padgett, Carnival's chief experience and innovation officer, is the creator of the Ocean Medallion, as well as one the key figures behind Disney's MagicBand, which serves as the playland's digital ticket and much more. He spoke with Adweek about his experience at CES, what the travel industry gets out of it, and what he plans to talk about on his CES 2020 panel, "AI and VR in Travel." This interview has been edited for clarity. Could you tell me a little bit about your panel? What are you planning to talk about? Padgett: AI has become the industry buzzword as it relates to, 'you've got to be doing it or you're not on-trend.' But the reality is it's not like buying a software package off the shelf, implementing it and saying all of a sudden you're AI-driven. At the end of the day, AI is not unlike traditional computing. It's a broad term. The reality is that AI is only as good as you train it to be. You have to have really smart people that are engaged with innovative processes and models to train AI models to reduce the burden. I was watching a commercial that said, 'We produce AI experiences,' and I was like, 'What's an AI guest experience?' I've never heard of that. We need to cope with the growing amount of incredible information that is being produced through connected guest experiences, and use that information in real time to power guest experiences. That's how we're using AI: We have every guest using Ocean Medallion connected to the ecosystem of the ship. It's a very contemporary and popular word, but it's still only as good as the clarity of the strategy you're trying to achieve. Are consumers savvy to these buzzwords? Do they know when it's being used authentically? I think they've been so prolifically used with the big brands like Microsoft, Amazon, Verizon, AT&T. There's been so much messaging around the terms, I think they're commonplace. I don't think consumers and guests really care. They care about their experience, and if those tools are used to create better experiences, that's wonderful. They don't care if there are 1,000 people back there or one computer. VR is interesting in the sense that it's been thus far a gaming experience. It's not actual virtual reality when you think about the term; it's actually fake reality. It's not a virtual version of the reality you're in—it's putting you in a different reality. VR has been used as a gimmick or an attraction as it relates to travel. You put on VR goggles and you're isolated to yourself and we know that, at least on a cruise experience, that's not usually what people want to do. I don't see VR really structurally changing anything as it relates to the consumer experience. For Carnival or for the travel industry overall? The travel industry overall. You're seeking to travel to experience the real world: people, places, cultures and immersions. Why you'd want to go on vacation and then virtually immerse yourself in someplace other than the vacation seems to be an oxymoron. We are using VR from a Carnival Corporation standpoint in non-guest-facing applications, non-novelty applications. We have a true digital clone of our ship in space and time and experiences that allow for much more industrial effectiveness, efficiency in optimizing the work, which then makes us more productive. Our focus as it relates to VR is on the industrial applications, not the consumer side. As in, how the ship is built? Not only how they are built but how they run on a real-time basis. Let's just say a ship has 3,500 guests and there are 1,500 crew on the ship. Everyone is there to provide an experience or consume an experience. We can more effectively match the supply and demand of experiences and services through an overall more productive ship platform as it relates to labor, crew members, labor costs, energy costs, fuel costs. All those things become empowered with real-time intelligence. Since unveiling the Ocean Medallion in 2017, how has your job changed? Are you still fine-tuning? It has shifted. Once you've proved that it works, you need to have the guests love it. After you get there, you have to ask if it'll scale. So far, we've scaled to five ships this year, which is fairly dramatic. Now, we ask, how can we expand it? So, it becomes a pace game vs. will it work. What does CES mean to the travel industry? CES is a great stage. I increasingly laugh about it, and I think it should be called the Consumer Experience Show because the novelty has worn off of the hardware, electronics and equipment that used to be the focus of the show. Now, it's about experiences being created from all the hardware and software. People go to understand the landscape, to understand the competition. Largely the CMOs, the CIOs are going there to see where people are going, what they are talking about. But most are thinking about angles to accelerate their progress. Carnival broke into the space in a big way to show that we, as almost a complete city [a cruise ship], can actually orchestrate all the things you guys are talking about because we own the entire platform.

CES

CES 2020 Preview: How Carnival Uses VR and AI Aboard Cruise Ships

Chief innovation officer John Padgett on how technology is changing the travel industry

Ryan Barwick

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Ryan Barwick