HAL strategy wrong? Go upmarket, better than going down market?

[HappyInVan]

Folks,

 

 

I've been conned by HAL's promise of 'signature of excellence'. For the price I paid, I thought I was getting a bargain. Instead, I was outsmarted by HAL.

 

 

After cruising 21 days with HAL, I have some doubts about the wisdom of HAL's current marketing strategy, and its viability in the long run.

 

 

The environment is tough for the larger cruise lines. The American and European markets are in recession, and likely to remain weak for an indefinite time. The mass cruise lines have been adding megaships, reminisce of the property bubble.

 

 

Each 4,000 passenger megaship adds @1.2 million cruise nites per year (4,000x300) to the market. This means that prices have to fall far enough to attract very large numbers of first-timer cruisers. The cruise lines are competing against Disneyland and Puerto Vallarta (all inclusive) for the hordes of $100 per day vacationers.

 

 

“Gods, you can't do it cheaper on your own!”

 

 

Many of the budget travelers won't take ship excursions, and won't pay for the ship's soda/drinks. They don't add much to profit margins.

 

 

In this situation, HAL is vacating its executive niche (>$200 per nite). Instead, it is ($150 per nite and falling) closing in on the mass cruise lines ($100 per nite).

 

 

Fact is that the executive niche is strong. Compare the strength of the stock market versus the national (real) unemployment rate of @15%.

 

 

Why is HAL vacating a niche where it can be profitable, to compete in markets already owned by the mass cruise lines. Yes, every month HAL needs to fill its ships (ala last minute deals). But that is not a long term strategy for a market that has changed.

 

 

How will HAL's smaller ships compare with the latest and greatest megaships?

 

 

Adding the Retreat play area may be a nice marketing point. But, is that enough to compensate for the relative poverty of facilities and programs?

 

 

Will HAL's core customers remain loyal? That is, the people willing to pay $300+ for suites.

 

 

What is the alternative? Should HAL build on its reputation and go up market? Can they refit the smaller ships and compete with the executive-plus cruise lines ($300+). Perhaps, steal some customers from the luxury lines ($500+). Can they change the game in the $250-$450 market?

 

 

HAL could also run more cruises in exotic locations like the Arctic, Antarctica and crossing the Horn. All these things can be done with smaller ships.

 

 

Why is HAL taking the easy way out, and destroying the brand it has taken so long to build?

 

 

Let's have your thoughts! Hopefully, HAL is listening. Are you willing to pay more for more. Or, prefer paying less for less?

 

 

Please, there's no need to flame each other. We're trying to help HAL.

[iancal]

HAL already is a mass market cruise line.

 

Having said that, I think they could be headed for troubled waters. It seems to me like they 'don't know what they want to be when they grow up'. I suspect that they are stuck in neutral.

 

I agree, HAL needs to get off the dime, define themselves, and move forward.

Edited December 6, 2010 by iancal

[bob brown]

I agree that HAL is a 'mass market' line. They try to define their niche within that market with a more refined, traditional type cruise experience that emphasizes the itinerary rather than the ship itself as a resort, and tends to attract an older demograhic. HAL has to try to walk a fine line to retain their loyal following, but at the same time attract some new business if they hope to survive. So far it looks like Carnivals plans for them have proven to be successful. Just look how much HAL has grown over the era of Carnival ownership.

[tcook052]

HAL could also run more cruises in exotic locations like the Arctic, Antarctica and crossing the Horn. All these things can be done with smaller ships.

 

Having just booked clients on a 30 day Rotterdam sailing in '11 aboard the Rotterdam called Incan Empires and knowing HAL aren't doing summer Caribbean in '11 I would contend HAL is trying new & in many cases "exotic" itineraries.

 

FWIW I like the "premium" brand market position HAL occupies at the moment and contend there are as many risks in moving upmarket as downmarket. That's just MHO.

[billie5]

Every major travel writer classifies HAL as a mass market cruise line, generally on a par with RCCL and Princess, but below X.

 

How would HAL hope to compete with Oceania, for example, although I imagine the larger (than Oceania) HAL ships might be favored by some who are seeking something between the mainstream and the luxury lines? The financial verdict on Azamara Cruise Line (now Azamara Club cruises), also seeking a place between mainstream and luxury, is still out, especially as they seem to have found it necessary to raise fares (passenger count down, but revenue up, so far).

 

IMO, HAL has no choice but to stay mainstream. I suggest, though, that their somewhat smaller craft could enable them to sail more exotic itineraries. That would certainly excite me, for one.

 

Bill

[Pam in CA]

As a cruiser mostly with Princess, I find the two lines very similar in product; mass market with more elegance and charm than Carnival and NCL. So, why do I cruise HAL instead of Princess, where I get unlimited free laundry, free Internet packages, etc.? For the itineraries, and in some cases, the ships. I rank three HAL cruises among my all-time top five cruises.

 

I can only speak for myself but I think HAL offers better itineraries than Princess sometimes; and, in some parts of the world, a better cruising experience. For instance, I'd done the Buenos Aires to Santiago cruise on the Golden Princess and came away thinking that the ship was just too darned big for some of the ports. So, when a friend wanted to do a similar cruise and include Antarctica, we priced a HAL cruise and I'm so glad we did. MUCH better cruise experience in the smaller ports since there were about 60% fewer passengers to accommodate. It was one of the best cruises I've ever taken.

 

Am I typical? Probably not but I thought I'd give my perspective and reasoning why I cruise HAL.

[Philip217]

Nobody has ever lost any money under-estimating the taste of the American Public.

 

The most wildly successful company in American History is Wal-Mart.

They make all their money by going for the lowest common denominator.

 

The most wildly successful Cruise Line in history is Carnival.

Once again, lowest common denominator.

 

What happened to those great elegant cruise lines like Royal Viking, Sea Goddess, and Royal Cruise Line?

Their owners claimed that they would NEVER lower their standards - even if it killed them.

Rest in Peace................

 

Why is it that really great cruise lines like Seabourn, Sea Dream, Silver Sea, and Crystal have NEVER made a penny of profit in their entire histories?

Because the cruising public is more interested in Quantity over Quality.

Everybody claims that they want the quality, but when it comes time to ante up, lowest price always wins.

 

Thank goodness that the owners of the truly great cruise lines have such large egos and large pocketbooks they can continue to operate at a loss.

[m steve]

I don't think HAL prices are much different than in the past. We are getting a real deal this coming week but by Jan. prices are back to where they usually are. I also don't think they are lowering their standards but changing some things to improve the cruise as well as the boottom line. The HAL demografic seems to remain the same with older, more experience cruisers making up the majority of guests and each cruise the Mariner brunch seems to get bigger, now being offered twice that day.

The only things that seem to change are the number of cabins the steward team must handle and the smaller inventory in the duty free shop. I'm not sure how they do in the luxury jewelery store as I rarely see anyone in it and the prices are very high. I guess they are hoping for a big winner from the casino to come in.

[happy cruzer]

Remember cost per night depends on cabin selected. All the major lines vary a great deal on cost per night based on providing a range from suite to inside cabin.

 

Cruiselines tend to make more on the larger cabins and sell insides at cost.

 

The luxury lines (Oceania and Azmara are in the middle somewhere) offer larger cabins and the per diem does not vary as widely as the mass market.

 

Many cruisers can not handle that they paid 3k for their suite and get almost the same experience as the inside cabin cruiser who paid 600. The service levels are very similar, you are just paying to rent more square feet. That is supply and demand at work.

[Taxguy77]

I was also led to believe HAL offered a better product than it does, but not to a great degree. The room, beds and linens were much better than I had experienced on other lines! :)The Rotterdam is a beautiful ship, and the art in the halls made just walking around a delight.

However the 'as you wish dining' was as They wish and service in the anytime MDR was slow and only equal to a midpriced chain lunch place on land. :( Azamara was crowded and worse! :eek:

The saving feature at mealtime on both was the buffet, altho I don't normally eat in a buffet if I can avoid it.

Edited December 6, 2010 by Taxguy77

[GeriatricNurse]

I was also led to believe HAL offered a better product than it does, but not to a great degree. The room, beds and linens were much better than I had experienced on other lines! :)The Rotterdam is a beautiful ship, and the art in the halls made just walking around a delight.

• However the 'as you wish dining' was as They wish and service in the anytime MDR was slow and only equal to a midpriced chain lunch place on land. :( Azamara was crowded and worse! :eek:
  

The saving feature at mealtime on both was the buffet, altho I don't normally eat in a buffet if I can avoid it.

 

The "as you wish dining" to which you refer is actually "Open Dining"! :)

[DRWhit]

Since HAL is owned by Carnival, you have to look at it as what is good for Carnival rather than what is good for HAL. Carnival already owns Seaborn, so an upscale of HAL to luxury might just compete with that line. Plus, it would be hard to fill all of HAL's ship on a luxury basis, I would think.

 

But who is to say all HAL ships have to be in the same market? I would think they could look at how The Prinsendam is doing and judge how effective converting other ships to that model might be.

 

Since CCL also owns Cunard, Princess and HAL, it seems to me that with HAL they are just more interested in controlling total overall cruise market share, rather than some specific niche.

[bob brown]

Nobody has ever lost any money under-estimating the taste of the American Public.

 

The most wildly successful company in American History is Wal-Mart.

They make all their money by going for the lowest common denominator.

 

The most wildly successful Cruise Line in history is Carnival.

Once again, lowest common denominator.

 

What happened to those great elegant cruise lines like Royal Viking, Sea Goddess, and Royal Cruise Line?

Their owners claimed that they would NEVER lower their standards - even if it killed them.

Rest in Peace................

 

Why is it that really great cruise lines like Seabourn, Sea Dream, Silver Sea, and Crystal have NEVER made a penny of profit in their entire histories?

Because the cruising public is more interested in Quantity over Quality.

Everybody claims that they want the quality, but when it comes time to ante up, lowest price always wins.

 

Thank goodness that the owners of the truly great cruise lines have such large egos and large pocketbooks they can continue to operate at a loss.

Lowest common denominator? Maybe.

But then how do you account for the wild success of Apple?

It's computers and I-things, are the top priced in general, yet they seem to be the most successful.

[Crazy Gramps]

HAL has defnitely gone down in the period I've been sailing it and that's not over a long period of time.

If I thought I could, I'd cancel my next cruise. But my beloved bride would do something horrible to me.

 

 

 

Next cruise is Regent or Crystal

Gramps

[bepsf]

I've been saying this for years - HAL has been slowly moving downmarket while advertising an upmarket experience...

...and most of this change has occurred since the retirement of Kurt Lanterman - That man knew how to run a successful business.

The biggest problem is that HAL simply has too many ships.

It's easy to place yourself upmarket when you have a mere 2100 berths on three ships to fill (Oceania) - it's a bit tougher to do when you have 6500 berths to fill (Cunard)

...yet it's nearly impossible when you have 15 ships and 22800 berths to fill.

[Traveller-man]

I agree, where it not for the staff on their ships they would be a three star cruise line.

[iancal]

I think that the comments are reasonable. Our first cruise on HAL was only a few years ago. This recent exposure often made us wonder why people referred to HAL as being upscale or premium. We did not find this to be the case. It is a very good cruiseline, but we find it very comparable to Princess or Celebrity. The only exception being that we think X's new S class ships have really raised the bar. DW is already asking about another S class cruise vs another cruise in general.

[MightyQuinn]

In my view, HAL was in an excellent position a few years ago to capture that niche between premium mass market & luxury. They already had an excellent base with mid-sized ships, tasteful décor, flawless service & excellent dining. They had a defined style which commanded a premium price. But in the recent past, HAL has homogenized its product & enlarged its ships to the point where they are just another player in the crowded cruise market.

 

I think HAL is at the top end of mass market & I don’t think they can easily move upward now. That space is ably occupied by Oceania & Azamara, who recognized the need for a truly premium cruise product that costs a little more. They’ve been rewarded with tremendous growth, passenger satisfaction & loyalty.

 

There is very little left that distinguishes HAL from other mass market lines. That once saddened me, but now I just accept that HAL has made a decision to compete in the upper mass market. And they do it very well. Rather than lament, I now look elsewhere when we want a a premium cruise experience.

[Philip217]

Lowest common denominator? Maybe.

But then how do you account for the wild success of Apple?

It's computers and I-things, are the top priced in general, yet they seem to be the most successful.

 

You're joking, right?

 

Apple is the Chevrolet of the computer world.

Low price, mass produced, one size fits all.

 

They try to give away the IPhone in Asia, but nobody will take them - even for free.

[Alcarondas]

I don't think HAL is even trying to be "premium" or "upscale" anymore, despite what their ad copy might say.

 

What distinguishes them from all the other mulitple-large-ship lines is a slightly more dogged adherence to Tradition. What exactly that means is up for debate, but much of what HAL does seems to keep half an eye on the past, to the ocean-liner days of yore.

 

-ships that look like ships, and not shopping carts, condo blocks or amusement parks;

-wood and brass rather than space-age fibers and unobtainium;

-the availability (although now diluted) of fixed-seating dining;

-low-key entertainment, and encouragement for passengers to quietly amuse themselves;

-emphasis on civility and enrichment, instead of excitement and adventure

-half-hearted attempts to maintain a (semi-)formal atmosphere, rather than abandoning it completely.

 

Considering this, it was probably no mistake that the CC pros named HAL their "Best Line for Classic Cruising".

 

Also, none of the items listed costs any more or less to present than the alternative (except perhaps the entertainment, where HAL should be saving $).

 

So, HAL can compete price-wise with other mass-market lines while still offering a slightly different product for a different consumer. The trick comes in understanding the product. It's not premium, it's not exclusive, it's not upscale. It's "classic" and "traditional".

 

IMO, there is a place in the market for an accessible mass-market, price-point-driven cruise line that still remembers what ocean travel used to be about, and is willing to provide a reminder of that experience for those customers who want it but can't (or won't) pay the premium rates commanded by the small-ship lines. HAL, with its almost-140-year history, is ideally suited to fill that slot. CCI realizes this, I'm sure. HAL can't move too far upmarket, or it will begin to cut into Cunard's slice of the pie.

 

The only way I can think of to appeal to both ends of the market (and this goes for all lines, not just HAL) is to bring back class-segregated ships. That way, different passengers can truly have different experiences on the same vessel. Those willing to part with the most cash can enjoy the best facilities, cuisine and service, while the mere "tourists" can get by with simple accommodations and low expectations.

 

Of course, the modern sense of egalitarianism revolts at the very thought that some people might be treated better or worse simply due to their economic situation, so I doubt if we'll ever see it. Therefore, any ship is going to have to be either entirely "First Class" or entirely "Tourist". Anyone who expects First Class service and accomodation while paying Tourist-Class rates deserves to be disappointed, I think.

 

As always, these are only my own opinions.

[Pettifogger]

Before I became aware of HAL a little more than two years ago, I expressed on one of CC's other boards the need for a cruise line about 25% better and 25% more expensive than the mass market lines; I was not yet aware of premium as a category. Someone suggested HAL which suited me perfectly, so I agree with tcook 052 that "I like the 'premium' brand market position HAL occupies at the moment and contend there are as many risks in moving upmarket as downmarket."

 

I also agree with one of Alcarondas' very perceptive remarks that premium and traditional become somewhat confused when evaluating HAL, but the graciousness of the staff, which is the biggest difference between HAL and the mass market cruise lines, seems to me to be more premium than traditional.

 

Since the recession started, some posters have pointed out economies that HAL may have introduced; none of them has interfered substantially with my enjoyment of HAL's cruises, so I now I feel fortunate to be booking premium cruises for no more than a mass market price, and sometimes less.

 

I too am concerned that, in the future, HAL may not give sufficient attention to that segment of its loyal clientele who would prefer not to have to stop and rest on their way from the dining room at the stern to their cabin near the bow, but I think the recession may have the unexpected benefit of preserving our favorite ships longer than might otherwise have been the case.

[ROZO'SBEAU]

Classic and Traditional...I see myself that way (humbly)...and HAL fills that bill just fine. Teak decks, fixed seating, late dinner option, subdued decor, fabulous itineraries, no hairy chest or wet tee-shirt contests. I would call it a niche, but I can understand why others wouldn't. I do agree the staff service is what truly sets HAL apart from all others in their category.

[tcook052]

I think HAL is at the top end of mass market & I don’t think they can easily move upward now. That space is ably occupied by Oceania & Azamara, who recognized the need for a truly premium cruise product that costs a little more. They’ve been rewarded with tremendous growth, passenger satisfaction & loyalty.

 

Agree completely. HAL & PCL IMHO aren't the same and like CEL is to its sister RCL feel HAL is that little bit ahead of PCL. Just MHO.

[HappyInVan]

Having just booked clients on a 30 day Rotterdam sailing in '11 aboard the Rotterdam called Incan Empires and knowing HAL aren't doing summer Caribbean in '11 I would contend HAL is trying new & in many cases "exotic" itineraries.

 

 

 

Ah!

 

 

Must be the one I was recently aboard. FYI, cruise.com was flogging a last minute special of $600 off a OV. That's $79 per nite.

 

 

http://boards.cruisecritic.com/showthread.php?t=1313423

 

 

So, are you willing to pay more for more, or pay less for less. You can be sure that HAL can't maintain standards while charging less.

 

 

Anyway, I was told by my ex-travel agent that HAL was four stars. Say what?

 

 

I couldn't believe that HAL could be four stars (Marriot) for that price. I was thinking maybe three stars (Holiday Inn). Lo and behold, I was right.

 

 

There's nothing wrong with three stars. The problem is that they are unable to consistently deliver even that standard. The most irritating aspect of HAL today is that they over-promise and under-deliver.

 

 

For example, the menu looks great. Very promising. Then, they deliver food that would embarrass a neighbourhood eatery.

 

 

There is a lot of stress for staff on the ship. Marketing sets the grand charade. Then, the pitiful workers have to deliver the best they can with what resources they are given. This is not a signature of excellence.

Edited December 6, 2010 by HappyInVan

[bob brown]

You're joking, right?

 

Apple is the Chevrolet of the computer world.

Low price, mass produced, one size fits all.

 

They try to give away the IPhone in Asia, but nobody will take them - even for free.

I don't know how it is in China, but here in the US, the I-Phone and I-Pad are the most coveted ones for sale. And the MacBook Pro line is also in demand by those who can afford them.

 

The only way I can think of to appeal to both ends of the market (and this goes for all lines, not just HAL) is to bring back class-segregated ships. That way, different passengers can truly have different experiences on the same vessel. Those willing to part with the most cash can enjoy the best facilities, cuisine and service, while the mere "tourists" can get by with simple accommodations and low expectations.

 

Of course, the modern sense of egalitarianism revolts at the very thought that some people might be treated better or worse simply due to their economic situation, so I doubt if we'll ever see it. Therefore, any ship is going to have to be either entirely "First Class" or entirely "Tourist". Anyone who expects First Class service and accomodation while paying Tourist-Class rates deserves to be disappointed, I think.

 

As always, these are only my own opinions.

 

It seems that there is already a slight trend in that direction on some lines. On Cunard, cabin grade has always determined which dining room you are assigned. The higher grades get better menu selection as well as open seating. They also have an exclusive lounge for the top grades. And they are also spreading to exclusive outside deck areas.

NCL's recent ships have what amounts to a 'ship within a ship', with upscale dining, lounge, pool, etc. exclusive to suite level guests. And other percs like reserved section of showroom.

So this may indeed lead to a return somewhat, of different classes on the same ship.