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It's Official -- Viking is Entering the U.S. River Cruise Market in 2017February 25, 2015 By: Susan Young
It’s official. Viking Cruises, a major European river player that’s also starting an ocean line this year, will launch Mississippi River cruises in 2017. It will become the first major European competitor to enter the U.S. river cruise market with dedicated vessels.
Louisiana Governor Bobby Jindal and Viking Cruises Chairman Torstein Hagen announced on Tuesday that the line has chosen New Orleans as the home port for Viking’s first cruises in North America. The two leaders had met earlier this year at Viking's operational headquarters in Switzerland to solidify plans.
“We’re proud to welcome Viking River Cruises to New Orleans,” said Jindal. “This investment will not only bring great new jobs to our state, but it will also showcase Louisiana and the Mississippi River to the rest of the world.”
Hagen had alluded to the potential for his line to enter the American river cruise market at several industry events over the past two years. "The Viking team is very proud to partner with the state of Louisiana, and we are grateful for the support of Governor Jindal,” Hagen said. “We are excited about the prospect of bringing modern river cruising to the Mississippi, a river that has been traveled by explorers for centuries.”
Viking will construct six new U.S. river cruise vessels over the next three years at an estimated cost of $90 million to $100 million per vessel. The river boats will be built in U.S. shipyards and crewed by U.S. citizens, the line said.
All vessels sailing under the Viking flag in the U.S. will be owned by Tennenbaum Capital Partners, a Los Angeles-based alternative investment management firm. They’ll be dedicated vessels that are time-chartered to Viking.
The Viking announcement is exciting on a number of fronts, according to David Crooks, senior vice president of product and operations for World Travel Holdings, parent of CruiseOne and Cruises Inc. “First, Viking is entering a market that isn’t oversaturated providing a new business opportunity. Next, they have a product that has proven to be high quality and consistently comes out on top in our customer surveys.”
In addition, Crooks says that Viking is a lucrative product to sell because the line provides agents with a fully commissionable product at a high price point: “This news is a win-win-win for us, the customer and the agent community.”
Linda Garrison, cruises expert, About.com, told TravelAgentCentral.com: "In general, having new cruise options on the Mississippi River is terrific news for the cruise traveler. Viking’s reputation on its other river cruises should serve two purposes — it will introduce another great river of the world to those who have sailed with the company in the past, plus introduce more American travelers to river cruising."
What's the competitive situation that Viking will face on the Mississippi? Michelle Fee, CEO and co-founder of Cruise Planners, an American Express Travel Representative, views the Viking entry onto the Mississippi as “healthy competition” that’s good for the industry. “River cruise ships traditionally have small inventory, so there is room for growth within the industry,” Fee stresses.
Already sailing on the Mississippi and throughout America's heartland are American Queen Steamboat Company’s American Queen and American Cruise Lines’ Queen of the Mississippi and American Eagle (launching this spring).
While Viking is a new player within the U.S. market, the line has expanded rapidly overseas. In fact, Viking is the world's largest river cruise operator with 60 vessels, many of them modern Long Ships launched in Europe the past three years. Viking plans to deploy two boats per year on the Mississippi River, with six boats in the first three years.
That launch will certainly come with promotional muscle -- which may actually benefit all competitors. How so? Other European river lines acknowledge they all benefitted to some extent with increased consumer demand when Viking launched its PBS partnership a few years back.
The high visibility spots the line has run in conjunction with Downton Abbey and other Masterpiece shows have increased consumer awareness of European river cruising as an appealing vacation choice. That could have a similar impact if Viking places a spotlight on American river cruising in such promotions. Exactly how Viking will promote, though, is as yet not known.
As for competitors, American Queen Steamboat Company operates a traditional paddlewheel vessel and its American Queen product plays heavily into the Mark Twain era and the fond connection Americans have with that chapter in American history. Onboard decor has a historical flair, although amenities for guests are modern. American Queen is also the biggest riverboat on the river, carrying 436 guests.
In contrast, American Cruise Lines' two vessels have paddlewheel design, but more modern propulsion and, thus, can cover a bit more territory. The interior of the ships is contemporary in design. These vessels also are smaller -- serving just 150 guests.
Viking's passenger count will fall in the middle. It announced that its American riverboats will host up to 300 passengers and feature luxury amenities. In Europe, Viking typically operates a modern, contemporary Long Ship product with clean lines and cookie-cutter design that's very similar from ship to ship.
"Competition is always good for the market," believes John Lovell, president, Travel Leaders Franchise Group, Leisure Group & Vacation.com. "The more choices consumers have, the better each competing line will have to be in order to attract their business."
Viking’s Mississippi River cruises will operate from docking facilities near New Orleans' French Quarter. "We are thrilled by the choice of the Port of New Orleans as Viking’s initial entry into the North American market,” said Gary LaGrange, president and CEO, Port of New Orleans.
La Grange said the port’s board of commissioners had been working with the Viking team for nearly two years to determine the proper venue for the new ships within the port and along the Mississippi River.
The new cruises will have port calls in St. James, East Baton Rouge and West Feliciana parishes in Louisiana. The cruises will then continue further into the U.S. interior to such ports as Memphis, TN; St. Louis, MO; or St. Paul, MN, depending on the season.
“Culturally rich itineraries will be great for the U.S. market – especially out of New Orleans, which already has a historic, European flair," Fee added. She likes Viking’s reputation for service and its European flavor.
"We know our passengers will enjoy the rich history, culture and cuisine of all the great cities and towns along the Mississippi River from New Orleans to St. Paul," said Hagen. "Together with our U.S. partners, we take great pride in the economic benefit that river-cruising provides to the regions our guests visit, from the shipbuilders to the local businesses.”
Jindal and Hagen said the Viking initiative will result in more than 780 new direct and indirect jobs in Louisiana. Of those, 416 will be new direct jobs for Louisiana-based operations and vessel crews; the average salary will be $40,000 plus benefits.
The line’s customers are expected to travel to New Orleans from across the U.S., Europe and beyond, bringing new business to New Orleans' hotels, restaurants, museums and other attractions. More than 90 percent of sales created within Louisiana by the new Viking project is expected to come from out-of-state customers.
“New Orleans is on a roll, and this investment is yet another example of the continued growth across industries in our city,” said Mitch Landrieu, mayor of New Orleans.
"Since its launch in 1997, Viking River Cruises has connected its passengers to Europe and Asia’s most scenic landscapes and cultural landmarks," said Jindal. "With today’s announcement, the picturesque Mississippi River and the beauty of New Orleans, Baton Rouge and other great cities of the American South will join the list of the company’s journeys as Viking River Cruises launches its first North American cruise.”
Viking is “an excellent company that travel agents – and by extension their customers – know and trust,” Lovell added. Given the line's leadership in river cruising elsewhere, he believes the company's entry into the U.S. market should be welcomed by the industry.
Many officials say Louisiana was chosen as a home port choice because of the state’s positive business climate, workforce and port infrastructure. The state of Louisiana also offered Viking a competitive incentive package that includes a $4.5 million performance-based grant for site preparation at the company’s docking locations in Louisiana.
Viking also will receive the customized solutions of the state’s workforce development program, LED FastStart, which will include partnerships with the Louisiana Workforce Commission and local educational institutions.
Founded in 1997, Viking first expanded into the U.S. market by establishing its U.S. headquarters in Los Angeles. In November 2013, the parties began discussing potential Viking interest in starting the voyages from New Orleans.
“Having the top river cruise company homeport in New Orleans will be an outstanding chance to tell the story of the Louisiana renaissance to the world,” said Michael Hecht, president and CEO, Greater New Orleans Inc. He said the decision of Viking to come to New Orleans demonstrates great teamwork at the state, regional and local levels.
Stephen Perry, president and CEO, New Orleans Convention and Visitors Bureau, also gave his support, noting that “Viking is synonymous with elegance and class, and they will bring a diverse domestic and international clientele” to the cruises and thus to New Orleans.
Viking is on an expansion kick. In addition to its growth in river cruising across the globe, it's launching its first oceangoing ship, the 930-guest Viking Star, this spring. Two additional ocean ships, Viking Sea and Viking Sky, are also on order.