CLIA’s Terry Dale moderated the panel of cruise executives at Luxury Travel Expo in Las Vegas
Increasing cruise fares as well as rising passenger totals may both be on tap for 2010. Speaking on a cruise executive panel at Luxury Travel Expo in Las Vegas early December, Mark Conroy, president of Regent Seven Seas Cruises, told agents in attendance that he expects his line’s pricing to increase about 8 percent in 2010. In addition, nearly 70 percent of Regent’s 2010 inventory is already sold.
Terry Dale, president and CEO, Cruise Lines International Association (CLIA), moderated the panel, which in addition to Conroy also included Pamela Conover, president and CEO, Seabourn Cruise Line; Torstein Hagen, CEO, Viking River Cruises; Gregg Michel, president, Crystal Cruises; and Peter Shanks, managing director and president, Cunard Line.
Dale told the audience that CLIA member lines will likely hit the organization’s original projection of 13.4 million passengers for 2009; that’s 300,000 more cruise passengers than what the lines carried collectively in 2008.
Conroy talked about “Tracking the Luxury Customer” and what makes that customer tick. He noted that the luxury cruise customer wants greater choice and diversity in dining options.
A big trend this year is that guests, previously into collecting expensive “stuff,” are now focused on collecting memorable “experiences” instead, he said. Other trends in luxury cruising include a younger demographic and a move toward a casual, more relaxed onboard atmosphere. Conroy said even older guests are now far more active. “On vacation, they’re now in the gym working out,” he noted.
Crystal’s Michel tackled the topic of “Showcasing the World.” He stressed that Europe—including northern Europe, the Baltic and the Mediterranean—remains popular. One reason is that the lines have created new experiences in popular destinations, such as Rome, where he said people could literally stay a month and not run out of things to see and do.
World cruises continue to do well, Michel noted. Exotic locales, including the Middle East, Africa, Southeast Asia, Australia and New Zealand also remain popular. Most importantly, “people want to learn,” he emphasized. So, many luxury lines bring notable experts onboard, continue to focus on experiential travel and develop cruises to wine and golf regions.
Viking’s Hagen, addressing “Going Ashore,” said guests are now keen on more cultural and meaningful shore excursions. River cruising is “all one big shore excursion,” he quipped, noting the ability of river lines to sail into the heart of major cities and culturally rich areas and to offer inclusive packages.
One benefit from Viking and a few other lines is that agents are paid commission on a highly inclusive fare that includes the shore excursion portion of a sale. Hagen reported that a typical commission for a 2010 sale on Viking River Cruises now runs approximately $1,110 per river cruise booking.
Cunard’s Shanks spoke about “Back of House” trends. “All lines do deliver outstanding service to our guests,” he said; this builds loyalty for future bookings. He also said online systems create efficiencies, and joint advertising between lines and agents is effective in engaging with potential prospects.
“We have to work together to find new guests,” said Shanks. Helping train agents are line-created webinars and webisodes (short videos). Those bring to life some element of the product experience, he said.
Seabourn’s Conover tackled “Growth in the Luxury Segment,” noting that both Seabourn and Silversea Cruises have taken delivery of new ships this year; in Seabourn’s case the new Seabourn Odyssey is the first of three such ships. She said overall luxury cruise segment capacity had increased 20 percent between 2008 and 2010 and characterized this as “a huge opportunity in terms of all of you [the agents],” while noting “there has never been a better time to sell luxury.”
The new 450-guest all-suite Seabourn Odyssey in Venice
Looking Ahead to 2010
Conroy said that Regent’s inclusive fares are creating happy customers and agents alike; he estimated that the line is now paying commission on 90-91 percent of what the customer spends on a cruise.
At Crystal Cruises, which celebrates its 20th anniversary in 2010, “we know guests want a cruise experience with a good reputation,” Michel said. “Reputation and consistency of the product are the main reasons people book with Crystal.” The Crystal Symphony recently underwent a $25 million refurbishment.
For 2010, Crystal has a pricing incentive, including two-for-one fares, free air and a simple sales message, including “As You Wish” inclusive perks. It is also offering a price guarantee: If the line reduces prices on any cruise, it will positively impact both new bookers and customers already booked. Also in the works are more pre-boarding booking options for everything from Vintage Room reservations to computer classes.
Viking’s Hagen compared the growth of ocean vs. river cruising. “Over the past eight years, river cruising in the U.S. [market] has grown 23 percent per annum,” he said, noting CLIA’s typical increase annually is about 7 percent.
New this year, Viking River Cruises has inducted the fuel-efficient Viking Legend into its fleet. “It has become the model for the future,” he said. Viking is also actively talking to contacts in China about debuting a new state-of-the-art riverboat there in 2012.
Despite the recession, Cunard believes it will “end up doing a little bit better than expected” this year, according to Shanks. Cunard is celebrating its 170th anniversary but has the youngest fleet in the industry, he said.
Having three ships in the fleet—starting next summer—will also give Cunard more flexibility in itinerary development. One highlight for the line and agents will be January 13, 2011, when the line will have Queen Mary 2, Queen Victoria and the new Queen Elizabeth (launching next summer) all in New York Harbor at the same time.
Conover said the launch of the new 450-guest Seabourn Odyssey “has been a huge hit with repeat guests.” She calls it a game-changer for the line and the luxury segment. It’s the first of three new, all-suite Seabourn luxury ships. While the Seabourn Odyssey is three times the size of the line’s other ships in tonnage, Conover stressed that it’s only twice the guest capacity.
To incentivize both agents and guests for booking the line’s Asia itineraries, Seabourn will soon launch a free business-class air offer for sale through February 2010 for Asian cruise bookings from June to August 2010.