Viking Cruises' Torstein Hagen Talks Ocean Plans and River Growth (SLIDESHOW)March 24, 2014 By: Susan Young
|Torstein Hagen, chairman and CEO, Viking Cruises // Photo by Susan J. Young|
Torstein Hagen, chairman and CEO, Viking Cruises, told reporters onboard the Viking Forseti river ship in Bordeaux, France last week that his new ocean line launching in 2015 will deliver a far different experience than that of other premium or ocean lines – with shore time of more than 12 hours per port, versus six to 10 hours in port for many other lines.
He also reiterated the line's plan for a fleet of ships. Viking Star, the line’s first 930-passenger ship will be delivered in April 2015. It will operate Baltic/Scandinavian cruises from Bergen, Norway (with one night overnight there) to St. Petersburg, Russia in summer. During winter, it will sail the Mediterranean.
Hagen said the second ship will launch in 2016; financing is completed for the first two vessels. While financing negotiations are still in process for the next two ships, Hagen hopes for a third ocean ship to debut in the second half of 2016 and a fourth in the first quarter of 2017.
|Aquavit Terrace onboard Viking Star // Photo by Viking Cruises|
Appealing to Guests
Hagen says 50 percent of all ocean cruisers book their voyage on a premium, upper premium or luxury product. That’s the target audience for oceangoing Viking Cruises.
He also told reporters that cruisers have many complaints about today’s ocean cruise experience. Based on feedback from the line’s river guests and the line’s own research, here are the complaints:
- Ocean ships are too big;
- Guests spend too little time in the destinations;
- Ocean cruising isn’t as good a value as thought when purchased (given the added fees for this and that);
- Small ships are far too expensive; and
- Small ships are often old and outdated.
Therefore, Hagen and his team have developed seven guiding principles for the new Viking Cruises. First, the destination is the absolute key to the voyage experience. Second, small ships provide great value. Third, ships should be designed for function -- yet comfortable with understated elegance.
Fourth, Hagen believes ocean ships should offer great food that’s locally inspired; he doesn’t like to use the word “gourmet” to keep guest expectations realistic but he does use “great.”
Fifth, he said Viking is developing shore excursions that are culturally enriching experiences. Sixth, Viking is committed to not “nickel and diming” oceangoing guests.
And finally, it’s important not to be everything to everyone, Hagen stressed.
|Deluxe veranda stateroom onboard Viking Star // Photo by Viking Cruises|
Clients for the new ocean line are likely 55+ in age, English speaking, well educated (45 percent will have a graduate degree, Hagen said), affluent, curious, active and interested in history, culture and music.
Hagen stressed that his line will be able to keep fares more affordable than other upscale products, despite having a small ship product. That's accomplished through design innovation and propulsion efficiencies. “We’ll deliver the Oceania experience at the Princess price point,” Hagen stressed.
Design-wise, none of the staterooms including balcony cabins will have tubs; instead they’ll have a large shower. As a result, Hagen said the ship will gain space for more accommodations -- contributing to lower pricing -- yet maintaining the small ship aura and spacious feel. Suites, though, will have tubs plus showers.
One of the biggest changes from normal cruising on existing premium, upper premium and luxury lines is that Viking Cruises will ban children from all sailings. “It will be couples only, no children and no grandchildren,” Hagen said.
While a no-kids policy bucks the trend of multi-generational travel, it also creates a product differentiator.
Onboard, Viking's ocean guests will have open seating in a main dining room and also access to an Aquavit Terrace, similar to the popular space the line offers onboard its Viking Longships. Windows in that aft restaurant venue can be opened in good weather, providing an al fresco feel. Outside tables and a walk-around promenade are other perks.
Guests will enjoy an infinity pool onboard the ship. All guests will have some complimentary Wi-Fi time onboard. Cruisers also will enjoy complimentary beer, wine and soft drinks at lunch and dinner, as well as free specialty coffees and other beverages.
Other inclusions? Port taxes and fees, plus ground transfers will be included within the cruise fare. Below-market airfares will be available. Shoreside, one complimentary shore excursion will be offered at each port.
Time ashore is another differentiator, emphasized Hagen. He said Viking typically will spend 12.1 hours in port on its itineraries, while as of May 2013, Viking’s research showed that Oceania Cruises’ Nautica spent 10 hours in port, while Celebrity Eclipse spent 7.8 hours, Emerald Princess 7.5 hours, Holland America’s Rotterdam 8.9. hours and other ships much less.
Guests on the new Viking Cruises will spend $421 a night on average when all the inclusions in the fare are included. Hagen said that compares with $710 per night on many other upscale lines (when adding extra charge items plus the cruise fare – in comparing the same experience between the lines.)
Talking about the value of a small ship, Hagen said ships under 1,000 passengers are in demand even as they age while cruise lines building 5,000 passenger mega-ships will one day be left with lots of unsellable old ships.
Last week, the line christened 18 new ships across Europe – 16 new Longships in Avignon, France; Amsterdam, The Netherlands; and Rostock, Germany; as well as two other smaller, Longship-styled vessels in Porto, Portugal.
Hagen also talked to reporters about the five-year growth in river cruising. He said ocean cruising grew 5 percent in that period, “other river lines” about 11 percent combined. During that same period, Viking’s capacity grew 31 percent.
Much of that growth is from the introduction of the Longships – 190-passenger vessels that sail the rivers of Europe.
During the christening week, Travel Agent was onboard two Longships -- the new Viking Buri, christened in Avignon, and the Viking Forseti in Bordeaux, France. Stay tuned for upcoming print stories on the product in Bordeaux.
In total, North American river cruise capacity has jumped from just 214,000 total berths in 2007 to 512,000 planned for 2015.
Showing just how much the line has grown, Viking’s share of that North American market for river cruises has increased from 19 percent in 2007 to what is expected to be 50 percent for 2015.
Viking will continue to add capacity -- 12 more new Longships to sail the Rhine, Main and Danube rivers in 2015, while two new ships will sail the Elbe River. Hagen described Viking’s Longships as having clean, modern lines as well as a light, airy feel.
What do passengers think of the river cruise product? More than 96 percent of past Viking river guests rated their cruise experience as far above expectations (64.9 percent) or above expectations (31.3 percent).”
Hagen said the company has spent $400 million on advertising since its inception as a company, far more than others. The result is high brand awareness -- 76 percent, far above any other river line, per a chart Hagen showed to reporters. Grand Circle ranked in second place at 17 percent and the rest of the industry each at 15 percent or less.
It should be noted that no fewer than three consumers stopped us while we were transiting two U.S. airports with a tote bag from a past Viking christening. The questions: "Have you sailed on Viking?" "What's it like?" Is river cruising a good idea? I've seen it on TV."
After talking to the consumers, it appears the Masterpiece Theater ads during Downton Abby are having a big effect. Viking is helping itself and other lines reel in those important first timers, people who haven't a clue about river cruising but are eager to learn -- and in droves.
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