Last week, Viking’s Chairman Torstein Hagen unveiled the company’s new expedition product during an elegant, high-profile event at the Beverly Hilton, Beverly Hills, CA. Top trade executives and travel advisors attended the gala program, which unfolded in the hotel’s International Ballroom, home to the annual Golden Globe awards.
“We’re going to perfect expedition voyages – that’s our mission,” Hagen told the crowd. The first expedition ship, the 378-passenger Viking Octantis, will launch in January 2022, on voyages to Antarctica and North America's Great Lakes, followed by a sister Viking Polaris, debuting in August 2022 and sailing to Antarctica and the Arctic.
It’s yet another step in Viking’s fast-paced brand progression. Founded in 1997, today Viking has 72 river vessels and six 930-passenger oceangoing ships. It is expected to generate $3 billion in annual revenue for 2020.
Viking also has 10,000 Viking employees or crew members across the globe, according to Hagen’s daughter, Karine Hagen, Viking’s executive vice president. She also told the audience that 500,000 guests sail on Viking every year and that “culture is at the core of most of what we do.”
Travel Agent gathered a list of “top takeaways” from Torstein Hagen, both at the Beverly Hilton event and a press briefing later that night, plus feedback from a travel advisor (with more trade feedback early next week in another story) about the new expedition product.
Here are gleanings of those and Hagen’s “philosophy” and approach to building his brand.
Talking about a gathering seven years ago in the same locale, Hagen said trade partners and media gathered to learn about Viking’s yet-to-be-built ocean ships, “which were only drawings on a piece of paper.”
He said, the line said to itself, “here we are, the giant river cruise line of the world, and now we’re going to tell the big cruise line guys how to do their business.” The line had a nice brochure, but “people said you must be nuts,” said Hagen. “There’s a limit to what your ambitions can be.”
People said the line wouldn’t be able to build, finance, operate or make money with the ocean ships. But the line’s first ocean ship was delivered in 2015, and there are six now, including Viking Jupiter. Hagen also said six more are under contract or construction.
He also alluded to the potential for more new ships, noting that “20 would not be an unreasonable number.” The line has shipbuilding options not yet exercised.
Hagen also urged the audience to know where the line now stands in the eyes of the consumer, putting up a slide showing Viking named “best ocean cruise line” for 600-2,199 guests by Travel + Leisure in August 2019 (as well as the three previous years), beating all major luxury lines.
“People ask which segment Viking is in,” and Hagen talked about his past working experience with the legendary Warren Titus, founder of Royal Viking Line and Seabourn: “Whatever I may have learned about cruising, I learned from him.”
Hagen said Titus told him, “Tor, never use the word ‘luxury.’” While Royal Viking was definitely luxury, Hagen was told, “don’t use that word because it means so many different things to different people.”
For example, many people confuse luxury with opulence – “more and more, and pile it on thick,” Hagen stressed. Yet in his mind, “it’s simplicity and make things simple. Don’t overdo it. You can still be elegant.”
In addition, “one of the characteristics of luxury for me is to be calm and quiet,” he said, adding “not so shouting.”
The 930-passenger Viking Sea's Explorer Suite and its outdoor veranda is shown above.
That’s what today’s Viking is about, but the line still doesn’t call itself luxury, “but maybe it’s luxury what we are,” he conceded, citing industry sources who’ve judged the line in that segment with other major luxury players. From his own perspective, "I think we have a damn good product and we’re very proud of it."
Hagen gave an overview of some of the oceangoing itineraries. The line, not surprisingly, operates combination Norwegian fjords and Baltic itineraries, as well as the “quiet Mediterranean,” and the line believes it’s possible to operate in the Mediterranean year-round.
He quipped that the other day the temperature in Rome was warmer than Los Angeles, which was having a bit of a cold snap, and said this time of year is also good without all the normal tourists.
In the Caribbean, the line operates a bit differently, “because we don’t like the big transport distances from Miami” for Caribbean season cruising, with Viking instead sailing from Puerto Rico, he noted.
Wherever the line sails, though, it’s about the destination. Hagen described Viking’s guests as 55-plus years of age, English-speaking, well-educated, affluent, curious and active, and interested in history, science, culture and music.
Described as "the thinking person’s cruise,” Viking features small ships, a destination focus, understated elegance, a quiet and calm voyage approach, a family feeling among staff, extensive enrichment and all-inclusive value, said Hagen.
Differentiating that from many big ship cruises, he stressed: “It’s not to be there to get drunk and ‘slosh’ in the sun and so forth.” That resulted in an eruption of clapping from the trade partners and other guests in the audience.
Hagen also stated that it's not about the ship itself being a destination with such big ship elements as rock climbing walls and bumper cars: “They say, ‘the ship is the destination.’ We say no, the ‘destination is the destination.’”
Again, he stressed the line’s focus on simplicity, giving a humorous example of a TV remote that requires a teenage son to operate. He showed how simplistic the line’s showers are to operate and mentioned that some high-end luxury shampoo bottles used in the industry are “impossible to open” and how the line’s accommodations are designed with simple in mind: “It’s practical, it’s elegant, it’s easy to use. And that’s luxury to me.”
What the line isn’t about as a brand is also important, he said, citing no children under 18 onboard, no casinos and no nickle-and-diming.
On the kids’ side, “people maybe like their grandchildren, but they don’t like other people’s grandchildren,” he said, eliciting chuckles from the trade partners in attendance.
River Cruise Market Share
Hagen said Viking has spent over a billion dollars in marketing river cruising as a vacation option, and that’s helped both the line and its competitors. But it’s definitely been worthwhile, he said.
“Our marketshare has increased from 32 to 50 percent…I think 50 percent is a good number to stay at,” Hagen emphasized. “You should have some competition to stay honest – but not too much.”
On European rivers, the line now has a fleet of Longships and 74 docking places. A photo of the river line's Aquavit Terrace is shown above.
Coming up in May, Hagen said the line will be showing off the docking location that it will have for the next 15 years adjacent to the Eiffel Tower in Paris.
“And we are at the Karnak Temple in Luxor so we will have no trouble docking on the Nile,” he said.
“It all began when Viking was started in Russia [in 1997] with two guys and two mobile phones,” he quipped. In fact, his favorite river cruise is still Moscow to St. Petersburg.
Bookings for 2020
In terms of advance bookings for 2020, Hagen put up a slide showing that 88 percent of the line’s ocean capacity is already sold for this year. River sales for 2020 are currently at 77 percent of capacity, so the line is entering the year in a well-booked position.
“So, I’d like to take this opportunity to thank all of you in this room and many others,” he said, citing travel agents, media, Viking’s staff and investors.
The line doesn’t like the use of the terminology of expedition "cruises," as it's not a typical cruise. "So, we will call it Expedition Voyages for the time being,” Hagen said, with the ambition of “perfecting expedition voyages.”
He said the line started looking at developing an expedition ship as far back as 2013, but the original design was abandoned for a new one, which has a bow viewing area so people can get up close to the environment and wildlife.
The original design also incorporated helicopters, which the line has now abandoned as an activity concept. “It’s not very friendly for the environment so we decided against it,” Hagen said.
In addition, the line originally thought it would power the vessel by LNG, but decided against that. Many people believe LNG to be a better, cleaner fuel, Hagen acknowledged, but stressed that LNG is a greenhouse gas.
So, his perspective is different than many in the cruise industry who push LNG as environmentally friendly. Instead, Hagen describes LNG as “a clean fuel from the lack of sulphur and nitrous oxides but from a greenhouse point of view, it’s the worst you could do.”
He says he’s trying to get the industry as a whole to recognize the negatives about LNG and that “we’ve done scientific studies on this."
That said, it's not a view shared by all, obviously, as many brands are introducing new LNG-powered ships as more environmentally friendly.
Expedition Ship Design
Flagged in Norway, the new 30,150-ton expedition ships will carry 378 passengers, more than some other expedition lines, but fewer than many oceangoing ships that sail to polar regions.
The expedition vessels will have a crew of 260. Expedition ships will be PC6 ice-class rated, and the ships will be registered in Longyearbyen in Svalbard, Norway.
They are a bit larger than other expedition ships, and “a larger ship is much more comfortable” in terms of motion, he noted. That said, Viking believes this size ship will allow it to do the landings needed for an expedition product.
The ships will have dynamic positioning, so they can stay in a place without anchoring, plus a new concept called U Tanks, which, in the simplest of descriptions, hold 450 tons of water under and along the sides of the ship.
“Stabilizers work only when the ship is sailing more than six knots,” Hagen stressed, but noted that when the ship is in expedition mode, it’s in one spot and not going that speed. “Then it wobbles…so it’s very important to have some dampening.” U-Tanks can stabilize the ship and create less motion.
In addition, expeditions can launch and return directly from the ship on a RIB (Rigid Inflatable Boat). Guests won’t have to go outside the ship to get on, and the RIB will simply slide from inside the hull down into the water.
In addition, the ship will carry two yellow submarines, and the redundancy provides a safety back-up, with one being able to rescue the other if needed.
On the enrichment side,The Aula, named for the University of Oslo’s ceremonial hall where the Nobel Peace Prize has been historically awarded, is where guests will arrive for lectures, debriefings and entertainment. What’s special is that it will have floor-to-ceiling windows – which can be opened on a good weather day for guests to behold spectacular scenery.
Attending the Viking presentation, Christy Scannell, travel designer and franchise owner, Dream Vacations, San Diego, CA, said “during the unveiling, my awe moment was seeing the 3-D video of how The Aula auditorium will lift the screen to expose a window on the world. It will be so exciting to watch a film about the Arctic and then have that wall open to show you the actual Arctic before your very eyes.”
The line has also done what Hagen terms a “somewhat radical design” on the staterooms. “On a ship like this you don’t need an outside balcony,” he said, “so we’ve brought that inside and then we have a clean big window so you can see as much of the nature as you can.”
Part of the window will come down, “so you can stand there with your arms on the ledge,” he said, and it will create an optimum way of seeing what’s outside yet maintaining interior comfort as needed.
Also, “people get wet so we are building in floor-to-ceiling drying closets in all the cabins,” he noted. That will allow gear and clothing to dry out.
Bathrooms on the expedition ships will be basically the same as on the ocean ships. Hagen told the audience that guests shouldn’t have “to rough it.”
“I think we will have the greatest hardware,” Hagen told the audience, and also said the line has a great leadership team too. Among those people are Jorn Henriksen, expedition operations, who has spent most of his life in the Arctic and brings 25 years of expedition management experience to Viking.
Another is Dr. Damon Stanwell-Smith, who will head up science and sustainability; he brings experience from a 27-year career on expedition-based research in polar, temperate and tropical locations.
Antarctica & Svalbard
Hagen has long had an ambition to do something in Antarctica, and the first six 2022 season expedition cruises there -- open first for sale to past guests -- have sold out. Clearly, past guests have the interest.
“So, we’ll open up more,” he said.
The line also will go to Svalbard, Norway, which Hagen visited for the first time recently with his daughter and enjoyed. “We saw reindeer but we didn’t see polar bears,” he said. “It doesn’t always happen that you see polar bears.”
But they’re there, he said, noting that the previous week the line’s photographer had been there and he put up a spectacular photo taken of a polar bear on the big screen for the audience to “ooh” and “aah” over.
“That’s for real,” Hagen said. The ships will also do repositioning journeys from Arctic to Antarctic.
Great Lakes Bound
But the big news is the line's decision to go to the Great Lakes. “You’ve seen that the ships look a little bit long and narrow,” he told the audience. “They’re designed for something quite special.”
Because guests like cruising afar, but also closer to home, the line will introduce Great Lakes cruising. While New York to Toronto can be done by larger ships, going beyond is not possible for many due to the size limitations of the Welland Canal.
The new ship’s size will allow it to go through that canal and on to Mackinac Island, Milwaukee and Thunder Bay, Ontario, Canada, among other places. So, guests will explore much more of the region from early spring through September.
“We haven’t been able to find arrangements to come to Chicago yet, but that may happen,” he noted.
From a trade perspective, Cannell says she's thrilled about the Great Lakes announcement. She spent the first 30 years of her life in the Midwest and “I think travelers will be surprised at how much they love the history and beauty of this region.”
Hagen obviously believes the region has great potential and adds: “I believe it has been served by sub-standard ships and I think we can certainly improve [that].”
Summing it Up
Will Viking new expedition voyages bring in new, younger guests to the brand, much as has happened with other companies such as Crystal? Travel Agent asked that question in the press conference.
Hagen said the fact that it sold out all the first season Antarctic voyages shows that the regular Viking guests are very interested. But, he suspects it’s possible that such voyages might also bring in some younger guests too.
How concerned is Hagen about over-saturation in the expedition market? “We are not because we have the guests,” he said, “but there could be reasons for that with lots of smallish operators” who don’t have the large passenger base to draw from. “It’s fine for us because the guests are there,” he said.
Today, Viking has itineraries on seven oceans, 20 rivers and soon-to-be five Great Lakes. But he’d also add on two Russian lakes, which “aren’t too shabby either.”
Hagen, who declined to reveal the cost of the expedition ships, said he was “very excited” about what the line was doing, and hoped that he had shared that excitement with the audience.
Travel Agent asked many consortia leaders and travel agents for their post-event perspective. Look for more on that early next week.
Possibility for the Future?
During Hagen’s presentation, one person yelled out “Mississippi River,” to which Hagen said, “the guy sitting next to me is from Louisiana and that’s all I can say.”
The line had said several years back it wanted to introduce Viking’s river product to U.S. rivers, but that has not yet come to pass. Strict Jones’ Act regulations on foreign-flagged ships make it tough for new U.S. operators to sail interior waterways, as a foreign port call is required.
Other rules, too, come into play, even for U.S.-flagged vessels, such as having a U.S. crew.
That said, one staffer from a Mississippi River-area CVB recently told Travel Agent (not for attribution) that Viking just asked the CVB again for detailed shoreside activity information and touring options.
As for now, Hagen isn't saying much. But clearly the interest is still there. Time will tell.