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The New Luxury CruiserApril 21, 2010 By: Susan Young Travel Agent
At Cruise Shipping Miami, Cunard’s Peter Shanks shows off the Queen Elizabeth model
While traditional cruisers who want formal nights and assigned dining remain important to luxury travel agents, the recent influx of baby boomer, Gen X and Gen Y guests into the luxury cruise segment has changed the onboard mix of guests and the types of activities they seek. Dynamic and more subtle changes in the luxury marketplace were a hot topic at the Cruise Shipping Miami conference last month.
At the conference, Gregg Michel, president of Crystal Cruises, announced the luxury line would add another choice into its main dining room for 2011 voyages. The line’s new Perfect Choice Dining program will have three options. The first two—Classic Main Seating and Classic Late Seating—are essentially what’s offered now, and will satisfy loyal Crystal guests who love things the way they are.
But a third, more flexible choice, Open Dining by Reservation, will allow your clients to secure a reservation in advance for the main dining room at a time of their choice. They may even choose a different time on every night if so desired. Crystal said it prefers guests make reservations, but walk-ins will also be accommodated by the maitre d’ based on availability.
Dining flexibility was just one of the luxury trends discussed at the conference. In one luxury-focused general session, Pamela Conover, Seabourn Cruise Line’s president and CEO, explained the new norm: “As we bring new ships into the luxury segment, the new guests we are attracting are clearly younger and more active. They are less formal in dress and lifestyle.”
That trend also resulted in Regent Seven Seas Cruises’ decision several months ago to introduce a revised dress-code policy. Now, two dress codes have been established for evenings in Regent’s public1 areas: elegant casual and formal optional.
Moving forward, Amerigo Perasso, president and COO, Silversea Cruises, said he sees more working women and younger customers joining the luxury-guest mix. Larry Pimentel, president and CEO, Azamara Club Cruises, cited a huge market of first-time millionaires; he said 82 percent of those so-called “upmarket” U.S. consumers come from what’s termed “new money.”
New ships are helping drive growth. Conover said last year’s launch of Seabourn Odyssey, a larger ship for the line, delivered many new customers. Some have originated from other luxury lines, often people who previously wanted to try Seabourn but wouldn’t sail without a full balcony (now possible with the new ship). Other customers are simply stepping up from premium products. And still others are well-traveled, land-based vacationers who are not experienced cruisers at all but are ready to try a luxury product.
Knowing the type of guests may come a bit easier for the industry in future years. Silversea’s Perasso said high-quality customer data available will evolve as luxury lines customize guest experiences. Cruise lines are now learning more from guests one-on-one through line-provided concierge services and private shore-trip arrangements.
The luxury clientele is evolving geographically as well. For many years, luxury cruising attracted mostly North American guests, but now ships carry a more diverse, international mix. “The upmarket is becoming very global,” said Pimentel, adding that Azamara has a good chance of drawing 50 to 55 percent of its guests from outside the U.S. this year. He cited Australia as an enormous growth market, particularly with the stronger Australian dollar.
“The one-size-fits-all approach will also end,” noted Perasso, adding that over the long-term, Asia will replace Europe and the Americas as the biggest source market for luxury cruises. China (1.3 billion people) and India (1.2 billion) are the world’s top two most populous countries, followed distantly by the U.S. (310 million). Already a world economic powerhouse, India is poised to take over the top spot from China soon.
“Emerging markets are growing rapidly and outpacing the percentage of growth in the U.S.,” said Pimentel. He stressed that cruisers in those emerging markets will want familiar cultural attributes and cuisine onboard.
Pimentel pointed out to the audience that luxury lines must appeal to far more than simply the traditional luxury cruiser in the top 5 percent of the marketplace. Today, luxury lines are serving many more “aspirational” cruisers—and that aspirational market is more sensitive to economic hiccups. So, value remains pivotal to luxury cruising’s sales success. Those free-airs and transfers, two-for-one fares and other value-added perks will likely continue for some time.
Both Azamara’s Pimentel and Peter Shanks, president and managing director, Cunard Line, said a favorable luxury experience can be delivered on a large ship. Pimentel cited Royal Caribbean’s mega-ship, Oasis of the Seas, dwelling on its “superb” two-level suites. He said guests staying in those suites might head for Central Park and eat in an intimate 90-seat restaurant—without the other 5,000 guests.
Shanks, in turn, talked about Cunard’s Grill accommodations with spectacular suites and dedicated intimate dining facilities. He said large ships can provide luxury travelers with exclusive, highly appealing spots for their dedicated use, but also give them access to big-ship amenities open to the entire ship, such as ballroom dance floors, large libraries and even a planetarium. On the trade-show floor, Shanks showed conference attendees the new Queen Elizabeth’s luxury facilities via a new cut-away model; the ship launches later this year.
Terri Haas made her public speaking debut as chief commercial officer for Compagnie du Ponant, a French-flagged line with several intimate ships. It just opened a Miami trade office and its newest vessel, the mega-yacht Le Boréal, debuts in May.
Traveling in Europe and onboard a European brand is “certainly something that is alluring to the upscale U.S. market,” Haas noted. She also said upscale customers want a highly personalized individual experience, as well as an authentic and exclusive one. “Travel has really become more about the experiences that money can’t buy,” she added.
One interesting gleaning provided by Silversea’s Perasso was that luxury providers are changing their marketing approaches, utilizing more “left-brain” thinking. Generally, left-brain thinking is analytical, logical, sequential, rational and objective; it focuses on parts of an issue or product, not just the big picture. Right-brain thinking is more emotional, intuitive, subjective and random; it tends to focus on the whole.
One challenge for the luxury cruise industry is to get more young people into selling luxury travel. Azamara’s Pimentel said up-market clients are being served by a unique group of travel agents with an average age in the mid-50s. “I do not see young people coming into the [luxury selling] market. I have a fear of that,” he stressed.
“And I also see that the market has changed very much because of the web,” he said. As a result, he said, the value message has changed more than ever. “It used to be 10 to 15 years ago that the luxury end of the market was about thread count; now it’s become almost entirely about what counts—and that’s the experience,” he said.
Clients are looking for destination and culture and to see it in a unique way, Pimentel said: “It’s what gets people excited about travel. It’s what excited them 100 years ago and it’s what gets them excited today.”