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Travel Agents and Execs Sound Off on the Norwegian-Prestige DealSeptember 4, 2014 By: Susan Young
Earlier this week, Norwegian Cruise Line Holdings told the trade it was acquiring Prestige Cruises International, parent of Oceania Cruises and Regent Seven Seas Cruises.
That gave the firm a larger portfolio of brands, and should help it compete more effectively in the future with the cruise industry's "Big Two" companies, Carnival Corporation and Royal Caribbean Cruises Ltd.
Since the deal was announced, agents have been offering "their take" on the deal and the relationships between the firms. Here's a sampling of those comments.
Roger Block, president, Travel Leaders Franchise Group
“While I hadn’t heard any rumors about this move, I’m not surprised by the announcement due to the common ownership, said Block. “ The scale of a combined Norwegian Cruise Line and Prestige Cruises International – compared to the scale of the two large competitors in the market – makes sense in the bigger picture.”
Block believes that Norwegian has worked very hard during the past few years to improve its relationship with the travel agent community. “My hat’s off to Kevin Sheehan, Andy Stuart, and Camille Olivere for being approachable, open and forthcoming with where they are as an organization and where they are headed,” he said.
“I think Norwegian Cruise Line buying Oceania and Regent Seven Seas is a very positive move for the travel agency community,” Block said. “NCL, Oceania and Regent have been great partners of ours. They have done a very good job enhancing the products that they offer to the end-consumer, as well as the travel agent community – and I see that continuing.”
Leslie Richardson, owner, Cruise Planners, Missouri City, TX
“My first reaction was surprise. Then I thought, it’s a brilliant business move for Norwegian Cruise Line. It definitely makes them a stronger competitor with Carnival Corp. and Royal Caribbean International since both of them already have upscale lines within their family of brands.”
Richardson also said the acquisition could be a good move for both Prestige brands, if Norwegian lets the brands run independently of each other. “When Holland America was bought by the Carnival Corporation several years back, it had a negative impact on the product and loyal passengers,” she said, citing a situation in which included gratuities were no longer included.
Norwegian’s stance of business as usual? “It’s smart since it minimizes any compromises when it comes to the overall product of each brand for each line’s loyal customers and travel agents,” says Richardson. “Hopefully, Norwegian will look at previous acquisitions and learn from those mistakes and turn them into successes.”
She thinks the deal will be good for her business. How? “It may make it easier to upgrade those clients loyal to Norwegian to Oceania and possibly Regent in the future,” she notes.
David Crooks, senior VP, product and operations, World Travel Holdings
Norwegian Cruise Line conducted a Webinar for travel agents this week, explaining the transaction and discussing impact for the trade. Crooks, whose company fields the CruiseOne and Cruises Inc. brands, watched and listened to that Webinar, noting it was similar to other Norwegian webinars – "relaxed, fun and informal."
Andy Stuart from Norwegian and Kunal Kamlani from Prestige participated in the discussion. “Kunal and Andy came across as approachable and their exchange seemed genuine,” said Crooks, who said their easy tone helped to ensure the agency community’s comfort with the changes. “All three lines are very trade-friendly and Norwegian has proven it with its commitment to ‘Partners First,’”
As for major changes? “I would expect that any integration will take place more so in the ‘back of the house’ and I would be surprised to see any major guest- or trade-facing changes,” Crooks stressed.
Ruth Turpin, owner, Cruises Etc., Fort Worth, TX
Turpin’s reaction was very positive, because she recently had very positive dealings with some of the executives of Norwegian Cruise Line. Andy Stuart, Camille Olivere, Liz Finn and Glen Rothe are all very “pro” travel agent, she believes. “I have been impressed with their dedication to have a really great product,” said Turpin.
“I have also been very impressed with their newest ships, Norwegian Breakaway and Norwegian Getaway, as they are both wonderful ships and have the great Haven concept.” She stressed that the Haven concept is very close to her heart, because it gives luxury travel advisors a true luxury product to sell in the seven-day market. “I know they plan more of these ships for the future,” she says.
Turpin also said she met and spoke to Kevin Sheehan, Norwegian’s president, at the Norwegian Breakaway inaugural. “He is very dynamic and forward thinking and also a friend of the travel agent community,” she said.
Michael Consoli, owner, Cruise Planners, Atlanta, GA
"My immediate response was ‘Wait? What?’” says Consoli, but then he realized that the companies had previously worked together somewhat via their affiliation with Apollo Management, so then I was a bit less shocked.” He believes the service and quality levels of the three companies are geared toward their specific markets and “my hope is that these levels will not change.”
He also thinks the deal will allow Norwegian to use some of the resources and buying power of the three brands to bring down the cost of operations and procurement and, hopefully, pass those savings on to the consumer. For his business, specifically, he hopes all three entities will continue to support the home-based travel agent channel with their individual support teams and not limit it to one representative for all three lines.
In addition, “I hope that since travel agents earn more commission on the all-inclusive products with RSSC and semi-inclusiveness of Oceania, we will continue to see Norwegian offer agents the ability to make more money by selling the ‘all inclusive’ packages they offered last month,” says Consoli.
He said that during the past year, “we have seen the cruise lines shift their model from discounting to adding value to sell cabins,” citing Celebrity Cruises’ 123 GO promo and Royal Caribbean’s Buy-One-Get-One-Half-Off promotion, which he characterized as successful. So he believes that Norwegian’s new “all inclusive” package offered last month, seems to indicate that more lines are now looking to add value to the product rather than offer discounts.
“Instead of discounting heavily, we are seeing them wrap value into the price and therefore providing excellent value to the guest, while giving travel agents the opportunity to sell cabins that are higher priced than last year,” says Consoli. “RSSC and Oceania have been doing this for years and it’s a win-win for everyone.”