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A Conversation With Lisa Lutoff-Perlo, Celebrity Cruises' New PresidentFebruary 1, 2015 By: Susan Young
|Lisa Lutoff-Perlo recently was promoted to president and CEO, Celebrity Cruises. // Photo courtesy of Celebrity Cruises|
A 29-year travel industry veteran, Lisa Lutoff-Perlo was named president and CEO of Celebrity Cruises in December. For the past two years, she had served as executive vice president of operations for Royal Caribbean International with responsibility for launching Quantum of the Seas.
Prior to that she was senior vice president, hotel operations, for Celebrity and helped create the $3.7 billion Solstice-class fleet. We spoke to Lutoff-Perlo late last week about her first month on the job, her vision for the brand and what agents can expect.
Familiar but Different
“I jumped right in and all is going very well,” Lutoff-Perlo says, noting that given her long-time tenure with the company, she knows the people well. Coming back to Celebrity, “It feels like I never left.”
She knows, however, that her role and responsibilities have changed. “Ultimately, the commercial part is my primary responsibility,” she says, adding that, while December was a blur, January was a strong building month for future plans. “We’re learning together that the business is ever changing, the marketplace is ever changing. We have to be ahead of it every step of the way,” she says.
Will she retain Modern Luxury as Celebrity's branding? “I don’t see it turning into anything else,” she says. “I think it’s working very nicely. Everyone has embraced it. People seem to understand it and it provides the right positioning.”
|Lisa Lutoff-Perlo is shown with Richard Fain, chairman of Royal Caribbean Cruises Ltd., Celebrity's parent company. // Photo by Celebrity Cruises|
She believes the Modern Luxury branding, though, will continue to evolve and strengthen, citing Celebrity’s recent relationship with Randi Zuckerberg in a “Take Care of Your Selfie” program; Zuckerberg will encourage the line’s guests to find a tech-life balance while on vacation. The first part of the program is a new line-up of spa treatments at Canyon Ranch SpaClub.
One facet of Lutoff-Perlo's personality is to bring fun elements to the job and the product. “You can’t take yourself too seriously,” she says. “That’s the bias I come with, so do what you do, but do it in a way that’s enjoyable and fun.”
A big part of the Modern Luxury brand proposition is also hefty destination immersion. So over the next few weeks and months, “we’ll take a good strong look at the itineraries to make the destinations a bigger part of what we do with late nights and overnights," she says. “We’re going to do even more of that.”
The team has also taken a hard look at how it’s spending money, what the brand gets for its money and the crazy marketplace pricing within the cruise industry. “Celebrity has moved toward a value-proposition [for pricing], which I value and appreciate very much,” she stresses.
Celebrity is also taking a different, more integrated approach to revenue management. Susan Bonner, vice president, revenue management and onboard revenue, is now in charge of both cruise ticket and onboard revenue.
“That assures that with every time and promotion, we’re looking at how the brand benefits,” Lutoff-Perlo says, describing the revenue approach as "more holistic."
As for new ships, she describes that creative and development process as “always one of the most fun parts of my job.” For example, with her work on Royal Caribbean International’s Freedom of the Seas, she helped create the Flowrider surf concept at sea, as well as the line's strategic alliances with Johnny Rockets and Fisher Price. She also created many new features for that line's newly launched Quantum of the Seas.
Celebrity’s “Project Edge” is building two new ships for the premium line — the first to be delivered in 2018. The Solstice-class ships were a home run for the line, and “when I think about Edge, those ships have to do the same thing for us” — delivering what guests expect, she says. “Even more significantly, the new ships have to deliver against the brand pillars." Those include such facets as destinations, culinary, luxury accommodations and wellness.
But since the first new ship won’t be delivered for another three years, and the line hasn’t had a new build since 2012, Lutoff-Perlo tells TravelAgentCentral.com that continued product innovation is important; that will bridge the time and keep customers engaged until the new ship launches.
Moving forward, she also says Celebrity needs to be paid as much money as possible for its cruise experience so it’s able to meet its fiduciary responsibilities. Challenges in the marketplace? She cites the global economy, U.S. economy, events within the cruise industry the past few years and the constant need to attract new customers.
“Attracting new people into this category of vacation is critical and not easy,” she acknowledges, noting, “We have to figure that out as a brand and as an industry.” Celebrity does research and after viewing the results, she said: “That’s why for me, the first-time cruise market is so important.”
She says the confusion for first-time cruisers continues, though, as people simply don’t know about cruising. They think of a big white ship, without truly understanding the experience. “It’s so hard to get the message out,” to show why cruise lines do the things they do — and that’s where the visuals help, she says.
And, for all cruise lines, “the hardest part is that ensuring our customers — both guests and travel agents — know what makes us special and different,” she says, adding that, as Celebrity’s brand began to evolve about a decade ago, it became more relevant to guests.
“That was the catalyst for Solstice,” Lutoff-Perlo says. “So this is the Celebrity you’ve always loved, but it evolved it to a place where it was more chic, more approachable, more sophisticated and more elegant but also light and fun.”
The Solstice-class ships have proven so popular with agents and guests, the line also has “Solsticized” its Millennium-class ships. Keeping the fleet consistent is important. Celebrity Century, the line’s oldest and last Century-class ship, is leaving the fleet this year.
Will those Millennium-class ships remain in the fleet for a while? “We’re doing well in Asia, guests are looking for more places to cruise to, and we need a number of ships,” she says. “I can’t see our fleet getting smaller.”
Celebrity just announced it’s adding a new Suite Class restaurant, Luminae, on both classes of ships, starting in April. Agents can read more about that here: www.travelagentcentral.com.
While Celebrity certainly isn’t returning to the “class system” of the Golden Age of cruise liner travel, it — along with most other cruise lines — is on the hunt for more perks and spaces for those in the higher end accommodations. “Suite guests feel like they deserve more, because they’re paying a lot of money to cruise,” says Lutoff-Perlo, who notes that providing more high-end perks for those paying the big bucks in suites is being done in the hotel side of the industry as well.
“For me, it’s always a balance of listening to your customers,” she says, adding that the ships also have so many choices that all guests can feel valued and have a great vacation.
Lutoff-Perlo also doesn't see the line fitting into the premium "bucket" segment: “It’s so funny, premium guests can go on Quantum of the Seas (a contemporary segment line) and have a brilliant vacation."
Labels of contemporary, premium or luxury, for example, have less value as they mean different things to different people. She believes it’s more about the psychographics and the type of experience appropriate for the guest's specific reason for travel — an exotic itinerary, a romantic getaway or a multi-generational family trip.
From her perspective, “I really believe people are bucketing themselves less and less and it’s up to us to un-bucket them.”
|Listening to customers, not taking yourself too seriously and working with the trade are all elements of Lisa Lutoff-Perlo's work style. // Photo by Celebrity Cruises|
A plus for travel agents is that Lutoff-Perlo spent 17 years in sales for both Celebrity Cruises and Royal Caribbean International. She served as a district sales manager, as well as an associate vice president of national and corporate sales. So she knows the turf, the opportunities and the challenges.
The vast majority of Celebrity’s sales are through the trade and “Celebrity has always had a strong relationship with the trade,” Lutoff-Perlo says. “That’s how the brand started.” She also notes that Dan Hanrahan and Dondra Ritzenthaler have strongly contributed to the agent loyalty that continues today. “That won’t change,” she stresses.
Immediately after her appointment as president and CEO, Lutoff-Perlo reached out to all the cruise line’s top accounts and their executives to assure them of Celebrity’s continuing trade commitment. "Lisa spent several years in sales so she clearly understands and appreciates the importance of the trade," says David Crooks, senior vice president, product and operations, World Travel Holdings.
He agrees that Celebrity has always been "incredibly trade focused" and said that "Lisa now being President is a clear indication that trend will continue going forward.”
“It’s really nice to see that the relationship with the trade is so strong,” says Lutoff-Perlo. She knows how much agents do for the line’s guests and said that Celebrity understands that without the trade, it can’t be successful.
She also says travel advisors have helped the line know it’s on the right track with its promotions and programs. She cites the “1-2-3 Go” value-added promotion.
Who are Celebrity’s guests? Most are in their late 40 years of age and up, although the line is drawing younger guests and many multi-generational groups. While Millennials aren’t Celebrity’s primary target audience right now, Lutoff-Perlo acknowledges that they’re important to every company with an eye toward the future.
So, Celebrity will continue telling its story in the way younger guests like. Millennials and Gen-Xers are very destination focused, very active on social media, Instagram, and the line will continue to promote in that way. “But we really need like-minded people, regardless of age,” she notes, and to attract them based on the line’s brand pillars.
The new Espresso reservations system goes “live” in March and in a limited trial, trade customers loved it, according to Lutoff-Perlo. “We’ve been doing Webinars with the trade, a six-city training tour and we’re working hard to get the message out ... Espresso addresses a lot of things the trade have been asking for over time. “The new global reservations system is designed to make partners more efficient and to reduce the number of steps needed to make a booking – from seven to five," she says. (Agents can read our story about the launch announcement here: www.travelagentcentral.com.)
More Nights, Overnights
With so much focus on the destinations, have cruisers totally lost the pleasure of sea days? “It used to be what people did — sailing five or six days across the ocean,” she says, noting “that’s not how it is anymore, as the destination is really important.” Celebrity’s guests say they want to spend more time in port, stay later and see and do more, “So we’re using the destination as a feature and playing it up more."
That said, cruisers taking a European trip with a port a day in such cities as Venice, Rome, Florence and so on, often say they’re absolutely exhausted. So, in reality, Lutoff-Perlo believes “the overnights and double overnights eliminate them being so harried.”
Guests feel they have more time to do what they want to do, they don’t need to all rush off the ship at once early in the morning, so the cruise itself has become more relaxing. “There is less of a need to inject the sea days,” she says.
But she also acknowledges that “the ship really comes to life when you’re at sea,” so it’s the right combination of the two — plenty of destination time and a sea day here or there — that makes a good itinerary.
Celebrity’s new Vacation Stay packages also offer a new approach and a new strategy to destination immersion. For example, the packages combine a river cruise on the Danube River followed by a Mediterranean cruise on Celebrity Eclipse.
“Early indicators look good, but we’ll see how it works in the long-term, but more than likely it will continue,” says Lutoff-Perlo about the Vacation Stay program.
This is Celebrity’s 25th anniversary year so "there's more to come” that's new, she says, noting that they don’t want to announce details too soon. However, she adds, “Watch the entertainment space.”