Cunard Line combines offices with Princess Cruises in LA, Seabourn remains in Miami??

I had a strong feeling this would eventually happen. Next I think we will see Carnival Corp. dump Seabourn all together. I don't think they add to the bottom line any longer and the fact they are not relocating with Cunard sends a warning sign.

Ernie

Carnival Corporation & plc Restructures Cunard's North America Organization

Friday July 16, 9:00 am ET

MIAMI, July 16 /PRNewswire-FirstCall/ -- Carnival Corporation & plc (NYSE: CCL; LSE) (NYSE: CUK - News) has announced a restructuring of Cunard Line's North American organization designed to position the company for continued growth while streamlining operations and maximizing efficiencies. The line will be relocated to Santa Clarita, California, home to sister company Princess Cruises, by December 2004. In addition to the recently announced fleet operations reorganization, Cunard will share administrative, finance and IT functions with Princess.

This relocation follows the recent announcement in the United Kingdom, where Cunard's British operations were combined with those of the other Carnival Corporation & plc U.K. brands.

"Cunard has one of the most time honored names in cruising, and with the introduction of the Queen Mary 2 and the upcoming delivery of Queen Victoria, the brand is poised for growth," said Peter Ratcliffe, CEO of Carnival Corporation's P&O Princess division, which includes Cunard. "This move provides Cunard the opportunity to utilize the significant resources of one of its sister companies while retaining its unique identity."

The relocation is expected to reduce future overhead costs by approximately $20 million on an annual basis. Non-recurring charges related to the cost of the relocation of between $10 million and $15 million are expected to be recorded primarily over the remainder of 2004.

During the reorganization period Pamela Conover will remain as president of Cunard Line and will oversee the transition of the Cunard organization to Santa Clarita. Once the relocation is complete, Conover will assume the new position of senior vice president, Carnival Shared Services, a corporate office function reporting directly to Howard Frank, vice chairman and chief operating officer of Carnival Corporation & plc.

"It has been an honor to lead Cunard for the past three years, but it is quite clear that this move will further strengthen Cunard Line and will lay the foundations for further growth and success," said Conover. "In Miami we have an amazing team of dedicated staff who have been instrumental to Cunard's success over the years, and I would like to thank them for their support and many contributions, and wish them well for the future."

The line's North American Sales and Customer Services department will report to Lee Robinson, vice president of sales and customer service for Cunard, and the North American Marketing and Revenue department will be led by David Gevanthor, Cunard's vice president of yield management and marketing. Gevanthor and Robinson, together with Carol Marlow and Jackie Foggitt, the heads of sales and marketing in the United Kingdom and Australia, respectively, will report to Peter Ratcliffe once the transition is complete.

The current Cunard field sales force remains intact, and will continue to represent the Seabourn Cruise Line in addition to Cunard.

"We remain committed to continuing the proud tradition of Cunard and the unique values of its ocean liner product as the company moves forward," said Gevanthor. "Travel agents can be completely confident that they and their clients will continue to experience Cunard's renowned White Star Service now and into the future," said Robinson.

Seabourn Cruise Line will remain based in Miami and operate as an independent brand within Carnival Corporation & plc led by Deborah Natansohn, who has been newly appointed its president. She had previously been senior vice president, sales and marketing, for Cunard. Natansohn will report to Carnival's Howard Frank. In a related move, Richard D. Meadows, senior vice president of sales and marketing at Seabourn, has been named senior vice president of sales and marketing for Carnival's Holland America Line.

Carnival Corporation & plc is the largest cruise vacation group in the world, with a portfolio of 12 cruise brands in North America, Europe and Australia, comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise Line, Windstar Cruises, AIDA, Costa Cruises, Cunard Line, Ocean Village, P&O Cruises, Swan Hellenic, and P&O Cruises Australia.

Together, these brands operate 77 ships totaling more than 128,000 lower berths with eight new ships scheduled for delivery between November 2004 and December 2006. Carnival Corporation & plc also operates the leading tour companies in Alaska and the Canadian Yukon, Holland America Tours and Princess Tours. Traded on both the New York and London Stock Exchanges, Carnival Corporation & plc is the only group in the world to be included in both the S&P 500 and the FTSE 100 indices.

Any thoughts on how this may ultimately affect Seabourn? I am curious, and I might add, a bit concerned.

I do think the reason. in part, that they remain in Florida is that the CEO of Seabourn quite likes the line, but I am certain it does not, as Ernie notes, add revenue to the Carnival bottom line.

bldsld

While I am new to cruising Seabourn I do know that Carnival Corp's operation is absolutely huge in Miami. Perhaps it is just a way to streamline the bottom line. Since Seabourn is one of their smallest entities, perhaps it is easiest to keep their corporate headquarters with the largest company - Carnival. I stayed right around the corner from Carnival Corp and was absolutely amazed at the size of their operation. I notice the article didnt mention that they were moving Holland America from Seattle. Perhaps eventually they will move HAL as well. But I do agree with the feeling that Seabourn doesn't add much to Carnival's bottom line. I too will keep an eye on it, as I feel that once I try a Seabourn yacht, anything else will be hard to go back to.

My wish for Seabourn would be the 2 original owners would buy Seabourn BACK.........but I don't think this will happen. Seabourn is making money now (has been for the last year or so) and we all know Carnival is interested in "that bottom line"........I have been told and RE-assured the past few weeks that as for we guests, nothing will change........

I feel so sorry for the Cunard employees on Blue Lagoon Drive, that are now

looking for work! And the Cunard/Seabourn employees that are going to need to RE-apply to Seabourn to keep their jobs!

Many of us are very loyal Seabourn-ites.........I'm planning on staying and sailing on the Yacht's, as I really don't have anywhere else TO GO! I have many, many friends that feel as I do! We are happy and have found our "home" aboard the Seabourn ships!

Viva the Legend, The Spirit and The Pride!!!!

MB

Very nicely said Martha B.

My guess is that, for now, Seabourn will not change. i would expect, however, that running these ships independently of the Cunard/Carnival umbrella, will stretch the profitability of the line, and I would not be surprised if a few years down the road, Seabourn does not exist as we know it today, if at all.

I agreee with Martha B, it would be great to see the ships under the umbrella of the former owners (currently SeaDream), however, that idea was floated a couple of years ago, and did not materialize.

I guess we will just have to enjoy the line now, and hope that by sailing Seabourn, it will continue to survive. It truly is unique in the cruise industry, and is always our line of choice.

Regards,

bldsld

Martha, I am glad to hear that they are making a profit, as companies tend to hold on to those that are profitable. I do want to make an observation though, out of all the luxury cruise lines boards, I have never seen such a devoted group as those here on Seabourn. All of you really love cruising Seabourn and are very loyal to them. While you may choose other cruiselines on occasion, it seems that the Yachts of Seabourn are most of your "loves" so to speak. I hope to have that same feeling after the Gilligans Island cruise....perhaps if it continues to be a profitable entity, Carnival Corp will hold on to them for a long while.

We cruise on Crystal and have done so for the last 8yrs. Many of our fellow cruisers have told us to try Seabourn as they enjoy both lines for different reasons. Each line offers something the other does not...understandable.

We have cruised on Silversea and absolutly disliked the whole venue. However after reading this board and Martha's posts it sounds like you can have fun on a small intimate ship. Especially with those theme parties that Martha is the hostess with the mostess.:)

FYI Martha, your post's are very informative and entertaining. Thank You.

Thank you for your thoughtful, sweet post! Yes, Seabourn is very unique and different as to small ship sailings.......it is a 6* line, VERY friendly, seasoned sailors on a beautiful sophisticated "yacht!" We do dress in the evenings, but there is never a "stiff moment"..........I started hosting my theme parties when my 90 year old Mother first started sailing with me. Being Southern we both grew up in homes that hosted "theme events".......I decided "well, why not at sea!" The Texas Fling-Ding's were alot of fun.......my "in-suite Pajama Champagne/Caviar Socials" were a riot and big hits.........last March on the Pride Crossing we all enjoyed "The All Stars Hall of Fame Gala".......next March, again the Pride ship, I'm busily planning, "A Royal Affair" (which I heard is almost sold out) The Pride 2006 Crossing gala will be, "Tickled PINK"........some of us are already working on our "pink dress attire"........(would anyone have any ideas as to what the Captain might wear? I could only think of a pink carnation! haha) Other guests host wonderful parties......The "Stuffed Animal Wedding" was THE most fun......I believe Norm's picture album is still available to view on the CC board. Both the Hall of Fame and The Wedding pictures are there.

I've laughed and said, "On a Seabourn ship, you don't know if you're steppin' into reality or steppin' OUT......." Always memorable voyage's and for me, (as for others also) life-changing..........Seabourn anchors my spirit!

Come join us........and make memories with us! We'd love to have you!

Port Out Starboard Home

MB West Texas

Since we seem to want to analyze the move, it would be best to examine it from a business standpoint.

Seabourn has a relatively small and very focused clientele whom they have identified and are able to reach pretty well.

They likewise have a small and very focused retail distribution network--probably most of their business comes through a few hundred travel agents.

Most of their clientele are North Americans.

Cunard, by contrast, has a diverse and widely distributed clientele and distribution system and requires a much larger volume of business on a weekly basis.

Cunard, which is a three-ship (soon to be two-ship) company, can realize greater economies by sharing services with a division (Princess/P&O) that shares its characteristics and already operates a large fleet of similar ships.

Seabourn can, quite likely, operate its "boutique" operation more efficiently without having to carry the extra overhead required to co-exist with Cunard. Their calculations obviously tell them they can do it better alone. Keep in mind that they will still have the heft and advantages of Carnival Corporation in such areas as purchasing, marine and technical support, sales force etc.

As for the likelihood of the corporation "dumping" Seabourn--why would they do that? If the company can be profitable, then it fulfills the corporate goal of occupying every niche of the cruise industry. CCL is unlikely to willingly surrender the ultra luxury niche to competitors. Seabourn carries enough prestige to add luster to the whole corporation.

If you want a hobby, do some research on the cruise industry and try to find someone who would be willing AND able to buy Seabourn from Carnival Corporation. Good hunting.

Here endeth the lesson...

bgood

 

If you want a hobby, do some research on the cruise industry and try to find someone who would be willing AND able to buy Seabourn from Carnival Corporation. Good hunting.

 

Here endeth the lesson...

 

bgood

I am quite certain that Carnival would like to rid themselves of Seabourn, as well as Windstar. I've seen certain signals and read comments in various cruise industry magazines to indicate this. Whether this means they can, or even if anyone is interested in these lines is another story.

We have already seen consolidation in the mass-market/premium sector of the cruise industry, and many analysts feel that consolidation of the luxury segment will be next. Who is the big player in the luxury cruise market? RSSC to be sure. Smaller players are Seabourn, Silversea, Crystal, and possibly Oceania. RSSC has the resources to purchase any of these lines if in fact they are for sale or RSSC is interested.

Mark Conroy, CEO of RSSC has stated he wants RSSC to be the "Carnival" of the luxury segment. This means owning the majority market share (by internal expansion or acquisitions), and operation a lean, mean, profitable organization.

As for Seabourn .... well the ships are getting old, they are beginning to lack many of the features that luxury cruisers are seeking, and Carnival may be losing interest in them. If they are not profitable then Carnival will have little desire in holding on to them. I don't really think Carnival is overly concerned about losing such a small segment of it's cruising portfolio.

Ernie

Hello Eroller.

A coupla pretty healthy assumptions in your last post.

"The ships are getting old..." The most cursory scan of these threads should let you know that Seabourn's rep is based not so much on the hardware as the software. The ships are extremely well-kept and look as good as new, really. But more importantly, the level of customized service and attention that Seabourn provides is simply unavailable elsewhere. Certainly it can't be reproduced on ships carrying hundreds more passengers like RSSC's.

"If they are not profitable..." Carnival Corporation is famously un-sentimental on this topic. So while your statement is clearly true, it also answers itself.

bgood

Hello Eroller.

 

A coupla pretty healthy assumptions in your last post.

 

At this stage in the game anything you or I have to say about the future of Seabourn is an assumption. There is nothing wrong with that when it's all you have to go by. Whether or not my assumption or your assumption will prove true is anyone's guess.

I've been following Carnival Corp. (and the entire industry) for over 20 years now, and if nothing else I've learned to spot hidden signals that *might* indicate something is in the works. I'm getting these signals from Carnival's actions concerning Seabourn now, or should I say lack of action.

While Seabourn probably has a strong although small following, there is no denying that the hardware is inferior to the newer ships of most other luxury lines. The ship's are getting old, and that is not an assumption but a fact. This is especially true in an industry where having the "newest" seems to carry a lot of weight. I think part of Seabourn's appeal is the smaller and more intimate ships, but it can also be a negative for those that suffer from sea sickness (thankfully not me). The fact that Seabourn has not expanded in any way also indicates limited success to me. All the other luxury lines have added new ships over the years and grown as a company, except Seabourn.

Carnival Corp. is very interested in growth, for all it's brands. If Seabourn can't grow it's market share and increase it's profit margin then I don't think Carnival will see them as an asset. It's not just a matter of making a profit, but growth as well. Certainly Carnival Corp. has the money to build several new Seabourn ships, but they choose not to and probably for very good reasons.

Ernie