Gregg Michel, Crystal Cruises president, spoke to an audience of top
producing travel retailers and media—including Travel Agent magazine—on Friday
about Crystal's
"State of the Industry." Michel said revenue for 2005 was up 29
percent over 2004, with a 22.5 percent occupancy increase and a 6.5 to 7
percent price increase. When adjusted to take into account the line's reduction
to a two-ship from a three-ship fleet, advance sales were up 22 percent up for
2006, versus the same time last year, and up 29 percent for 2007, again
compared with the same time frame a year ago. As the ship sailed from Amsterdam to Hamburg,
Germany,
Michel's presentation in the ship's theater also showed agents the challenges
of the cruise business. Fuel increased by 45 percent last year, even after an
offset of a fuel surcharge, with Michel calling fuel hikes "really the
home wrecker of the 29 percent revenue growth. But despite challenges, he said
2005 was a very good year for operating results. In 2004, Michel said there
were 337,500 luxury cruises sold by all cruise lines to passengers 55 and
older; in 2007, he projects there will be 512,000 cruises sold, a nearly 15
percent compound growth rate from 2004. He sees tremendous growth in the boomer
segment of that market and told the agents that three cornerstones of Crystal's product that
will help them sell to all customers are consistency, execution and constant
innovation. "It's really innovation that reinforces our product and
innovation that keeps us in the hunt," Michel said. What influences a Crystal customer to book?
First, he said, it's the cruise line's reputation, then the destination, then
the cruise date and length, all followed by value, price, and recommendations
of friends and travel agents. In 2007, he pointed out that Crystal has designed many "career
friendly" voyages that begin or end on a Friday, Saturday or Sunday, many
voyages with overnights in port, and 11 voyages of seven days or less to appeal
to working professionals. He gave the audience a sneak preview of the 2008
World Cruise, and while the itinerary is not yet final, he said Crystal was
looking at probably departing from Los Angeles, then sailing to the South
Pacific and Southeast Asia, perhaps back to India for the first time in four
years on the world cruise, and then sailing through the Suez Canal and probably
finishing up in Southampton, England. As far as a new ship, Michel said the
line is still planning to build one, it does have a shipbuilding team, it has
talked with yards, but it wants to "expand in a smart manner and buy
right." He said the slippage of the dollar doesn't bode well, but the line
will eventually add to its fleet. Right now, he said, the line has more than
2,000 luxury berths and is poised to capture a bigger share of the baby boomer
market moving forward.