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

[Jade13]

To those of you who insist that HAL is a mass market cruise line, there is nothing I would like better than to have a choice between cruise lines rather than being stuck with just one. If you can name one or more other lines that provide what HAL does, at no greater cost, I shall be grateful, if not eternally, at least for the rest of my relatively limited life expectancy.

 

Presently, I'm stuck with HAL for the following reasons among others; they have a school that produces a stream of excellent dining room stewards who make a visit to the MDR gracious even when it's a little slow, they're courteous to those who bring a bottle or two of wine aboard and I've never seen them harass even a whisky smuggler, they offer a choice of fixed or open dining arrangements (if one insists) for those who prefer one or the other, they offer bar setups so one can get an inexpensive start on the evening's festivities, they have a few formal nights so my wife can dress up and pretend she married a good provider instead of me, there are no drunks "sharing" dirty stories with the world while waiting for the elevators late at night (for me after 9:30 pm), and perhaps most important of all, when the recession hit, they didn't choose to sail with empty cabins to maintain their prestige as a premium-priced line, but reduced their fares so that the available cabins could stay full of people like me for our mutual benefit.

 

I do not claim to be especially well informed about the cruise business and there may be one or more other cruise lines which do all of the same things or even more at no greater cost. If you know of any, please let me and others like me know, so we can have a greater choice of ships, dates, itineraries, etc.

 

I am afraid that all cruise lines, to include Cunard apparently, have lowered their standards because of the economy, the bottom line, or some other reason. I think it is wonderful that you enjoy HAL so much, and have found everything with them to your liking. Unfortunately, I have not had the same experiences, and thus will be trying some other cruise lines in the very near future. At "no greater cost?" Nope. But for me personally, a little bit more money and the feeling that I've gotten what I paid for is worth it.

 

Celebrity is mass market. However, our recent experience on Eclipse exceeded our expectations. For that matter, so did our cruise on Century (their oldest ship I believe) earlier this year. We recognize Celebrity, like HAL, is mass market and Azamara is more money and the service even more exceptional.

 

The cost on Celebrity has always been less than HAL. Btw, our dining was open seating.

 

We have two future cruises booked on HAL. The itineraries are great and we love the crew. Hopefully they are reading these boards and service and food will only improve.

Edited December 18, 2010 by Jade13

[snorkler8]

To those of you who insist that HAL is a mass market cruise line, there is nothing I would like better than to have a choice between cruise lines rather than being stuck with just one. If you can name one or more other lines that provide what HAL does, at no greater cost, I shall be grateful, if not eternally, at least for the rest of my relatively limited life expectancy.

 

Presently, I'm stuck with HAL for the following reasons among others; they have a school that produces a stream of excellent dining room stewards who make a visit to the MDR gracious even when it's a little slow, they're courteous to those who bring a bottle or two of wine aboard and I've never seen them harass even a whisky smuggler, they offer a choice of fixed or open dining arrangements (if one insists) for those who prefer one or the other, they offer bar setups so one can get an inexpensive start on the evening's festivities, they have a few formal nights so my wife can dress up and pretend she married a good provider instead of me, there are no drunks "sharing" dirty stories with the world while waiting for the elevators late at night (for me after 9:30 pm), and perhaps most important of all, when the recession hit, they didn't choose to sail with empty cabins to maintain their prestige as a premium-priced line, but reduced their fares so that the available cabins could stay full of people like me for our mutual benefit.

 

I do not claim to be especially well informed about the cruise business and there may be one or more other cruise lines which do all of the same things or even more at no greater cost. If you know of any, please let me and others like me know, so we can have a greater choice of ships, dates, itineraries, etc.

 

Well said!!! And for those of you who keep complaining...LEAVE. Go to the other lines...and their thread. (This thread has been WAY to long and repetitive. Just my humble opinion :D)

[HappyInVan]

Repetitive? Really? Here's some additional material to work with.

 

 

Conde Nast did a survey in 2010 of its readers. Who has the most highly rated ships?

 

 

http://www.concierge.com/cntraveler/articles/502255

 

 

 

 

The small ship category is dominated by SeaDream, SEABOURN, Regent and SEA CLOUD, with Silversea bringing up the rear. That tells you who has that special experience.

 

 

Interestingly, RCL dominates the megaship category. Not a single Carnival brand ship in the top 15. Carnival's upmarket Cunard Queen Mary 2 is at an embarrassing #14. The Celebrity Solstice and Disney Wonder take the top price.

 

 

Here's the interesting part. In the broad Large Ship category (40k to 100k tons), HAL sweeps the bottom half of the top 25. The Prinsendam is rated #6 besides Oceania and Regent.

 

 

Clearly, people were impressed by their HAL cruise experience (relative to the Carnival, Norwegian and RCL competitors of the same size). But, they're not willing to pay a premium price. And, HAL isn't trying to maintain a premium price!

 

 

So, this paradox is at the heart of the differing POV (Is HAL a premium experience/line?) in this thread. What are the psychological factors at work?

 

 

http://boards.cruisecritic.com/showthread.php?t=1318690

[BruceMuzz]

Repetitive? Really? Here's some additional material to work with.

 

 

Conde Nast did a survey in 2010 of its readers. Who has the most highly rated ships?

 

 

http://www.concierge.com/cntraveler/articles/502255

 

 

 

 

The small ship category is dominated by SeaDream, SEABOURN, Regent and SEA CLOUD, with Silversea bringing up the rear. That tells you who has that special experience.

 

 

Interestingly, RCL dominates the megaship category. Not a single Carnival brand ship in the top 15. Carnival's upmarket Cunard Queen Mary 2 is at an embarrassing #14. The Celebrity Solstice and Disney Wonder take the top price.

 

 

Here's the interesting part. In the broad Large Ship category (40k to 100k tons), HAL sweeps the bottom half of the top 25. The Prinsendam is rated #6 besides Oceania and Regent.

 

 

Clearly, people were impressed by their HAL cruise experience (relative to the Carnival, Norwegian and RCL competitors of the same size). But, they're not willing to pay a premium price. And, HAL isn't trying to maintain a premium price!

 

 

So, this paradox is at the heart of the differing POV (Is HAL a premium experience/line?) in this thread. What are the psychological factors at work?

 

 

http://boards.cruisecritic.com/showthread.php?t=1318690

 

HappyInVan,

 

There are a few assumptions being made here that need clarification:

 

1. Conde Nast Magazine is somehow a good measure of public opinion.

Conde Nast readership is tiny, fragmented - and shrinking fast. Their demographic is of little interest to the major cruise lines.

 

2. Conde Nast Magazine is up to speed with the international cruise industry.

For the past several years, Conde Nast's winners in the "Big Ship" Category were not really very big at all. Conde Nast defines a Big Ship as up to 100,000 tons. That was true 10 years ago, but no longer.

 

3. There are many people willing and able to pay for a small ship cruise experience.

If that was true, the cruise lines would be building as many small ships as possible, as quickly as possible. The actual number of small cruise ships in the world today is only a few dozen (most of them very old), The actual number of new small ships built in the past decade is fewer than 10. The number of planned new small ships in the next 5 years is Zero.

 

4. Small Cruise Ship lines make money.

Despite their rather high per diems, Silver Sea, Sea Dream, Crystal, and Seabourn have never - in the history of their existence - made a penny of profit for their owners. We are extremely lucky that the families and corporations that own these companies have extremely large wallets and even bigger egos that compel them to continue bleeding money for the privilege of owning a top quality cruise operation.

 

Regent and Oceania have managed to eke out some very small profits in recent years, but not nearly enough to justify the massive investment in their ships. No sane stockbroker would ever recommend that you purchase stock in their parent company.

 

Those small cruise ship operators who insist on continuing business as a hobby or a charity deserve all the thanks we can give them. But sadly, they are never going to make significant progress in this industry.

Edited December 18, 2010 by BruceMuzz

[MightyQuinn]

Regent and Oceania have managed to eke out some very small profits in recent years, but not nearly enough to justify the massive investment in their ships. No sane stockbroker would ever recommend that you purchase stock in their parent company.

As far as I know, the parent company of both Oceania Cruises & RSSC is Prestige Cruise Holdings. PCH is a private company that was formed in '07 to manage select assets of Apollo Management LP, a private equity investment firm. I don't know how any stockbroker, sane or otherwise, could recommend purchasing stock in a private company.

 

Prestige Cruise Holdings is led by Chairman & CEO Frank Del Rio, founder of Oceania Cruises. Earlier this year, FDR announced that an IPO was "a very likely possibility" which have put them into the public domain. Nothing has come of that to date.

 

http://www.bizjournals.com/southflorida/blog/cruise_industry_report/2010/03/cruise_industry_sails_towards_ipos.html

 

Oh - and while I agree that Conde Nast may not be the arbiter of all things cruise-related, I disagree that cruise lines don't pay any attention to CN ratings. Witness the bragging of most cruise lines who receive any positive mention in a Conde Nast survey!

[BruceMuzz]

As far as I know, the parent company of both Oceania Cruises & RSSC is Prestige Cruise Holdings. PCH is a private company that was formed in '07 to manage select assets of Apollo Management LP, a private equity investment firm. I don't know how any stockbroker, sane or otherwise, could recommend purchasing stock in a private company.

 

Prestige Cruise Holdings is led by Chairman & CEO Frank Del Rio, founder of Oceania Cruises. Earlier this year, FDR announced that an IPO was "a very likely possibility" which have put them into the public domain. Nothing has come of that to date.

 

http://www.bizjournals.com/southflorida/blog/cruise_industry_report/2010/03/cruise_industry_sails_towards_ipos.html

 

Oh - and while I agree that Conde Nast may not be the arbiter of all things cruise-related, I disagree that cruise lines don't pay any attention to CN ratings. Witness the bragging of most cruise lines who receive any positive mention in a Conde Nast survey!

 

 

I also disagree that cruise lines don't pay any attention to CN ratings. That's why I never said that we do not pay attention to them. I said, "Their demographic is of little interest to the major cruise lines." Conde Nast doesn't have enough readers under the age of 1,000 to make them of any value to the cruise industry.

 

But ALL the cruise lines pay attention to ANY positive press we can get.

It matters little whether the good ratings or press come from a passe magazine like Conde Nast, Chicken Noodle News, or a "ratings for hire" magazine like Porthole.

[HappyInVan]

HappyInVan,

 

There are a few assumptions being made here that need clarification:

 

1. Conde Nast Magazine is somehow a good measure of public opinion.

Conde Nast readership is tiny, fragmented - and shrinking fast. Their demographic is of little interest to the major cruise lines.

 

2. Conde Nast Magazine is up to speed with the international cruise industry.

For the past several years, Conde Nast's winners in the "Big Ship" Category were not really very big at all. Conde Nast defines a Big Ship as up to 100,000 tons. That was true 10 years ago, but no longer.

 

3. There are many people willing and able to pay for a small ship cruise experience.

If that was true, the cruise lines would be building as many small ships as possible, as quickly as possible. The actual number of small cruise ships in the world today is only a few dozen (most of them very old), The actual number of new small ships built in the past decade is fewer than 10. The number of planned new small ships in the next 5 years is Zero.

 

4. Small Cruise Ship lines make money.

Despite their rather high per diems, Silver Sea, Sea Dream, Crystal, and Seabourn have never - in the history of their existence - made a penny of profit for their owners. We are extremely lucky that the families and corporations that own these companies have extremely large wallets and even bigger egos that compel them to continue bleeding money for the privilege of owning a top quality cruise operation.

 

Regent and Oceania have managed to eke out some very small profits in recent years, but not nearly enough to justify the massive investment in their ships. No sane stockbroker would ever recommend that you purchase stock in their parent company.

 

Those small cruise ship operators who insist on continuing business as a hobby or a charity deserve all the thanks we can give them. But sadly, they are never going to make significant progress in this industry.

 

 

Is that true?

 

 

Let's look at a hotel example. Ritz Carlton charges from $500 per nite. They have expanded to 74 properties. The property owners must be making money from combined revenues on rooms, dining and beverages. There is a business plan.

 

 

And, Ritz Carlton must be making enough as a profit center to keep its owner (Marriott) happy.

 

 

Among the luxury cruise companies, Crystal launched Serenity (new) in 2003. Seven Seas added the Voyager (new) in 2003,

 

 

Oceania has two ships Riveria/Mariner (66,000 tons) under construction. Barely making a profit? Seabourn's Sojourn and Odyssey (both new) entered service in 2009/10. Silver Spirit (new) 36,000 tons entered service in 2009.

 

 

These are 20-50% expansions in capacity for these small companies. Insignificant?

 

 

Don't have any illusions. The well-to-do know about value. They won't put up with a feeble refurbishment of an old ship. In fact, the Silversea Shadow and Whisper are radical redesigns of its earlier ships.

 

 

That said, the value-premium customers are less demanding. IMO, you could get away with a old hull and superstructure. Just add some glitter and wood. You will have to modernize the plumbing/electrical/mechanical systems.

 

 

I hear that the Ryndam is still using DOS in some of its electronic systems!

[Alcarondas]

Alcarondas,

 

 

There are enough people willing to pay for a premium experience. True, but I'm not one of them! Regent has been building all-suite ships since 2001. Oceania (since 2003) and Silversea (since 1995) have been expanding. That's nice, but I still can't afford those lines.

 

 

The distribution of income in the States and Britain has widened. The top 10% have more money than ever before. I'm not in the top 10%, and don't anticipate being there anytime soon. Congratulations to those who are. You have my envy. The luxury hotel, resort, automobile and consumer goods industries have soared.

 

 

The problem is that HAL stayed with the value-premium positioning, and over expanded. Not intentionally, I'm sure.

 

 

Some say that prices are half that of ten years ago. It's not because core customers have lost their ability to pay. Some of us have. In fact, affluent retirees have grown in numbers and spending power. Then they should find other lines that suit their budgets and cruising style, if they no longer find HAL to their liking.

 

 

Seems to me that HAL has the wrong ships in the changing market. Wrong for what? Wrong for competing with Oceania and Regent? Of course. Who said that's who they were competing with? Wrong for competing with Celebrity? Maybe, but only since the introduction of the Solstice class. There has been ample speculation on this board already about the next generation of HAL ships, and it seems that they're going post-Panamax with Solstice in their sights.

 

 

There's pressure from the mass cruise companies with the WOW factor of their mega-ships, and they are able to do it at ever lower costs. HAL cannot maintain prices (and quality levels) in their small ships using their current business model. I would add to this that I think it's also a function of the current economic situation which, I'm sure we all hope, will resolve itself eventually.

 

 

What is HAL's response. They're building larger ships (but without retiring the older ships)! There's the overcapacity. When they placed the orders for the 6 new Vista/Signature hulls, I'm sure they weren't expecting the world economy to come unravelled halfway through the project. Bad timing. Difficult times require difficult measures.

 

 

They're not willing to invest in a conversion to all-suites. I hope they don't. I probably wouldn't be able to afford to continue cruising with them. They're not able to change to a two-class clientèle. Ditto. So, they're trying to stay in the value-premium positioning. Good. I hope it stays that way.

 

 

However, their transition strategy is being crushed by the recession. Agreed. In the face of general overcapacity, HAL has not been able to maintain a premium price over the mass cruisers. Agreed. However, this will hopefully not be a permanent dilemma.

 

 

In fact, HAL prices have dropped faster than the mass market lines. In some destinations, HAL prices is the same as Carnival. That is the verdict of the market about the value of HAL's newer ships. I would add "at the present time." For what it's worth, in my 12 years with HAL, I never noticed that their fares were SIGNIFICANTLY higher than the other mass-market lines. They were slightly more, but nowhere near as much more as the premium lines are now.

 

The Carnival Liberty (2005) 7 Night Exotic Eastern Caribbean is priced at OV $100 per nite (March 5). The Eurodam (2007) 7-day Eastern Caribbean is priced at $100 per nite (March 5). Great! Choices in the marketplace! Whether someone wants the active excitement of Carnival or the subdued relaxation of HAL, it's within reach of many people's budgets! Isn't it wonderful?

 

 

Oddly, the HAL veranda is cheaper than Carnival's? Meh. Verandahs are overrated. :p

 

 

You can't squeeze blood out of stone. HAL built its value reputation based on European officers and an Asian crew. Now, it can only cut costs by hiring less experienced people and reducing staff levels. By definition, any new hire is going to be "less experienced." There will always be long-service professionals and green recruits right out of training school. This is true of any enterprise.

 

I'm sorry for being pessimistic. I wish it wasn't so.

 

In case anyone hadn't already noticed, I'm arguing almost entirely from a position of self-interest. HAL is currently offering a product I want at a price I can afford, and no one else is. The fact that other lines are offering a better product at a price I can't afford is irrelevant to me. By the same token, if there are posters in this thread who can afford the premium lines, it should be irrelevant to them what HAL is doing, because if they want the full-on premium experience, HAL isn't selling what they want to buy.

 

Many pages ago, I opined that anyone who demands a premium cruise experience at a mass-market price deserves whatever disappointment they may suffer. I stand by that opinion. That is not to make light of the very specific problems from specific cruises that some in this thread have pointed out. I firmly agree that some problems are unforgivable at any price. However, to some extent, That's Life. Things don't always work out perfectly. Anyone who cruises, on ANY line and at ANY price, will, sooner or later, have a bad cruise or two. Ship happens. If whatever the problem was is serious enough to get you to vote with your wallet and take your business elsewhere, then so be it. That's why we have a free market.

 

Overall, this has been an excellent discussion. Those who have participated obviously care very much about the issue, and the positions they have taken concerning it. While I don't presume to think I'll change anyone's mind, I think it's important to stress that "classic" does not equal "premium", and I continue to believe that there is room in the market for someone to offer a "classic" experience at an affordable price.

 

If my ship ever comes in (nyuk-nyuk), I'll probably be the first guy on the gangway for a premium cruise. But for the forseeable future, I have to keep my champagne tastes on a beer budget.

[Sailkeywest]

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.

 

Your post was very interesting to me, Alcarondas. Most of the things on your list were the very reasons (other than itinerary, ofc) that attracted me to HAL. I also really loved the looks of those SC aft suites ;)

 

P.S. Sorry if I am changing the subject as I am commenting on one of the first posts in this thread

Edited December 19, 2010 by Sailkeywest

[BruceMuzz]

Is that true?

 

 

Let's look at a hotel example. Ritz Carlton charges from $500 per nite. They have expanded to 74 properties. The property owners must be making money from combined revenues on rooms, dining and beverages. There is a business plan.

**Yes, there is a business plan. Charge $500 per night for a bed only. Everything else (food, entertainment, transportation) is extra. It's called nickel and diming in the cruise industry. Ritz Carltons - despite their elegance - cannot even manage to hit 50% occupancy at most of their properties. There are not enough people willing to pay so much for a superior product.**

 

And, Ritz Carlton must be making enough as a profit center to keep its owner (Marriott) happy.

** And Seabourn must be making enough profit ($0.00) to keep it's owner (Carnival Corp) happy.**

 

 

Among the luxury cruise companies, Crystal launched Serenity (new) in 2003. Seven Seas added the Voyager (new) in 2003,

**Crystal is owned by Nippon Yusen Kaisha (NYK), the world's largest and wealthiest shipping company. When I worked for them, we were rarely able to reach 60% occupancy on our ships. They only built Serenity after they re-cycled Harmony to their subsidiary brand. They knew that demand could not fill an extra ship. Crystal has NEVER in the history of the company made a penny of profit. Luckily the owners don't care.**

 

 

Oceania has two ships Riveria/Mariner (66,000 tons) under construction. Barely making a profit? Seabourn's Sojourn and Odyssey (both new) entered service in 2009/10. Silver Spirit (new) 36,000 tons entered service in 2009.

**Yes, Oceania is barely making a profit. Seabourn's newest ships are making 50% occupancy, despite the fact that they are truly elegant vessels. These new ships are bleeding more money than their smaller sisters. Thank God that the other Carnival Brands are so profitable and well able to cover the bleeding at seabourn.

Silver Sea had to tie up 2 of their new ships and leave them empty for most of the past decade. They just couildn't fill them. The Italian Billionaire owner of the company just cannot admit that his product will never make a profit. But he doesn't really need the money anyway.**

 

These are 20-50% expansions in capacity for these small companies. Insignificant?

**Yes a 20%-50% expansion of these tiny companies is truly insignificant. They have added a few hundred beds to the cruise industry total capacity of over one half million beds.**

 

 

Don't have any illusions. The well-to-do know about value. They won't put up with a feeble refurbishment of an old ship. In fact, the Silversea Shadow and Whisper are radical redesigns of its earlier ships.

** These are beautiful and elegant vessels that cannot even make 50% occupancy. As yet, they have never ever made a profit.**

 

 

That said, the value-premium customers are less demanding. IMO, you could get away with a old hull and superstructure. Just add some glitter and wood. You will have to modernize the plumbing/electrical/mechanical systems.

** Actually, you cannot get away with an old hull and superstructure. The new SOLAS regulations that are kicking in withi increasing speed and regularity are forcing the operators of the older ships to take them out of service. The new requirements require a complete re-construction of the vessel, costing more than building a new one.**

 

 

I hear that the Ryndam is still using DOS in some of its electronic systems!

 

At the end of the day, the small elegant lines cannot fill their very few beds on a limited number of small ships. That equates no no profit.

No profit eventually equates to bankruptcy.

[HappyInVan]

I also disagree that cruise lines don't pay any attention to CN ratings. That's why I never said that WE DO NOT PAY ATTENTION TO THEM... At the end of the day, the small elegant lines CANNOT FILL THEIR VERY FEW BEDS on a limited number of small ships. That equates no no profit. No profit eventually equates to bankruptcy

 

 

Sounds like Bruce works for a cruise line. Which one? Hope Bruce owns up! Maybe we can ask a few questions.

 

 

The luxury hotels/ships don't need to fill every bed. The Silver Cloud runs at +90% capacity. They always have a few extra rooms if guests are unhappy about their assigned rooms. After all, the Cloud is the same age as the Ryndam.

 

 

The luxury companies are able and willing to maintain their standards. They understand their business. Do you understand your business?

 

 

 

 

In the World Travel Awards (London, England), travel agents rate the best products in the travel industries.

 

 

http://www.worldtravelawards.com/winners2010-1

 

 

In 2010, these travel professionals gave the nod to RCL (Leading Cruise Brand) , Seabourn (Leading Luxury Cruise Line), Silversea (Leading Small Ships Cruise Line), and HAL (Leading Green Cruise Line).

 

 

In fact, Silversea has won awards all the way back to 2001. By comparison, the Carnival brand has few awards.

Edited December 19, 2010 by HappyInVan

[m steve]

There will be more people to book on the luxury cruise lines and I like the demographics of HAL and would not want to be sailing with a bunch of overpaid Hedge fund 20 somethings. We just had our first cruise in a deluxe suite and really felt HAL did a great job of catering to us with the Neptune lounge and their concierge staff.

[BruceMuzz]

Sounds like Bruce works for a cruise line. Which one? Hope Bruce owns up! Maybe we can ask a few questions.

 

The luxury hotels/ships don't need to fill every bed. The Silver Cloud runs at +90% capacity. They always have a few extra rooms if guests are unhappy about their assigned rooms. After all, the Cloud is the same age as the Ryndam.

 

The luxury companies are able and willing to maintain their standards. They understand their business. Do you understand your business?

 

In the World Travel Awards (London, England), travel agents rate the best products in the travel industries.

 

http://www.worldtravelawards.com/winners2010-1

 

In 2010, these travel professionals gave the nod to RCL (Leading Cruise Brand) , Seabourn (Leading Luxury Cruise Line), Silversea (Leading Small Ships Cruise Line), and HAL (Leading Green Cruise Line).

 

In fact, Silversea has won awards all the way back to 2001. By comparison, the Carnival brand has few awards.

 

Sorry, I am not allowed to divulge my employer.

 

It is true that the luxury cruise lines do not have to worry about filling all their beds. They cannot make a profit even if they do fill them all, so it becomes a non-issue.

This is a situation that everyone who can afford it should take advantage of.

 

The small Seabourn ships can carry around 230 passengers, but rarely sail with more than 150. They don't have to worry about making a profit because the profits from the big ships in the Carnival Corp fleet finance their losses.

 

It is all fine and good to win awards - but those awards do not pay the mortgage on the ship, nor dividends to investors.

I have been in the Travel Industry for over 30 years and never heard of the World Travel Awards.

However if you do a search on CLIA, you will find that they are the largest recognized organization for International Cruise Lines on the planet. They represent all the major cruise lines; that is, they are non-partisan within the industry.

If you dig a bit deeper into CLIA, you will find that Carnival Cruise Line (not Carnival Corp) has enjoyed the top Guest Satisfaction Ratings in the cruise industry for the past 15 consecutive years.

Dig even a bit deeper and you will find that Carnival Cruise Line has also been the most financially successful cruise line during that same period.

So why is it that the more pedigreed members of CLIA; Silver Sea, Seabourn, Crystal, Sea Dream, Azamara, and Oceania, were not recognized by the cruising public as superior in Guest Satisfaction or in financial success?

By the way, I do not work for Carnival Cruise Line, and have never set foot on a Carnival Ship. Nor do I plan to.

 

So if the small elegant cruise lines appeal so strongly to the growing population of affluent travelers, why is it that they have so few ships, are rarely full, do not rate very well in Guest Satisfaction, and cannot turn a profit?

[HappyInVan]

 

It is all fine and good to win awards - but those awards do not pay the mortgage on the ship, nor dividends to investors.

I have been in the Travel Industry for over 30 years and never heard of the World Travel Awards.

However if you do a search on CLIA, you will find that they are the largest recognized organization for International Cruise Lines on the planet. They represent all the major cruise lines; that is, they are non-partisan within the industry.

If you dig a bit deeper into CLIA, you will find that Carnival Cruise Line (not Carnival Corp) has enjoyed the top Guest Satisfaction Ratings in the cruise industry for the past 15 consecutive years.

Dig even a bit deeper and you will find that Carnival Cruise Line has also been the most financially successful cruise line during that same period.

So why is it that the more pedigreed members of CLIA; Silver Sea, Seabourn, Crystal, Sea Dream, Azamara, and Oceania, were not recognized by the cruising public as superior in Guest Satisfaction or in financial success?

 

 

This is interesting.

 

 

http://www.cruising.org/vacation/about-clia

 

 

The Cruise Lines International Association looks like a trade association lobby group. I have no idea what the association does, or what its internal politics look like.

 

 

What Bruce needs to do is to show the link to the guest satisfaction numbers that he mentioned. Were they done by CLIA, independent group or internal company?

 

 

I have linked the summary from the World Travel Awards (London based). Here is an analysis on the Conde Nast survey.

 

 

Let's have a careful look at the Conde Nast poll that Bruce has little regard for.

 

 

In the design/layout section, Celebrity Solstice (94.9), Disney Wonder (93.3), and Independence of the Seas (95.5) score highly. By comparison, the HAL ships score around a mediocre 80 points. Accurate?

 

 

In this poll, HAL's strong points are itinerary and service. But, dragged down by excursions and activities. Looks right to me.

 

 

Oddly enough, the Prinsendam stands out from other HAL ships. It scores among the best in itinerary, service and food. Why can't all HAL ships be this way? Any comments from Bruce?

[momatibm]

I've been reading Happyinvan on these boards and have decided that he is either a 'troll' or just a very negative person. No mattter what any one says that 'differs from him' he gets on his ' attack' sled and ignores anthing that contradicts his views. Flame away Happy -know how to figure out who is here to enlighten or just to cause 'agita'.

[BruceMuzz]

This is interesting.

 

 

http://www.cruising.org/vacation/about-clia

 

 

The Cruise Lines International Association looks like a trade association lobby group. I have no idea what the association does, or what its internal politics look like.

 

 

What Bruce needs to do is to show the link to the guest satisfaction numbers that he mentioned. Were they done by CLIA, independent group or internal company?

 

 

I have linked the summary from the World Travel Awards (London based). Here is an analysis on the Conde Nast survey.

 

 

Let's have a careful look at the Conde Nast poll that Bruce has little regard for.

 

 

In the design/layout section, Celebrity Solstice (94.9), Disney Wonder (93.3), and Independence of the Seas (95.5) score highly. By comparison, the HAL ships score around a mediocre 80 points. Accurate?

 

 

In this poll, HAL's strong points are itinerary and service. But, dragged down by excursions and activities. Looks right to me.

 

 

Oddly enough, the Prinsendam stands out from other HAL ships. It scores among the best in itinerary, service and food. Why can't all HAL ships be this way? Any comments from Bruce?

 

Prinsendam is easy.

It is a small ship that offers primarily longer cruises where the passengers and staff are together for extended periods.

Service on a small ship is automatically perceived as better, where the service staff have more time per guest; service on longer cruises is automatically perceived as better, since the staff have more opportunity to interact with the guests.

 

The other HAL ships - or any large cruise line ships - cannot be this way because they are forced to operate at a profit, to finance small ships like Prinsendam that cannot make a profit.

 

HappyInVan,

 

I notice a distinct trend here. You are enamoured of small ships that are more costly to cruise on, and offer superior services and amenities. And that's great. I agree that they are marvelous values - if you have the money

 

But you err in assuming that a large segment of the population agrees with your personal desires. You may be correct that they DREAM about sailing on those ships. But when it comes time to commit with a credit card or check, they vote with their wallets.

 

The North American cruising Public wants a Rolls Royce cruise experience, but the vast majority of them are only willing or able to pay for the Chevrolet version.

Wal-mart did not become the most successful retailer in American history due to their high quality and service.

McDonalds is not the most successful restaurant chain in the world based on great food and service.

 

If the reality was otherwise, there would be hundreds of small elegant boutique cruise ships out there.

But they don't exist -except in very limited quantities. And their owners cannot manage fill them up. And their owners cannot manage to make a profit.

 

At the end of the day, a cruise line needs to make a profit if they hope to remain in business. I hope you understand that.

[HappyInVan]

I've been reading Happyinvan on these boards and have decided that he is either a 'troll' or just a very negative person... Flame away Happy -know how to figure out who is here to enlighten or just to cause 'agita'.

 

 

momatibm,

 

 

You are mistaken.

 

 

Bruce repeatedly asserts that the small ship companies don't make money. He claims that Carnival has the high guest satisfaction ratings for 15 years.

 

 

He has provided no numbers. He has not identified the source of his authority. Is he TA, association executive, marketeer, investment analyst or cruise management?

 

 

I see no evidence that Bruce has any grasp of marketing, finance or strategy.

 

 

I don't have the numbers about the profitability of small ship companies. It is possible that Crystal and Seabourn are the subsidized ego projects of mass market companies.

 

 

Though, Carnival doesn't strike me as the type of business that would subsidize the rich. After all, would any of Seabourn's regular customers travel on or endorse Carnival?

 

 

What about the Carnival's institutional shareholders? Would they not object?

 

 

For that matter, why would Seabourn be expanding if they are not profitable? And, they are building bigger, very expensive ships ($250m each).

 

 

The Silvesea is owned by an Italian family. Would they risk this kind of money if it is not profitable?

 

 

Why would elite cruise companies be unprofitable when elite hotel properties are profitable?

 

 

In answer to Bruce's point, McDonalds and Walmart are successful not because they serve great food (McDonalds) or have the lowest price (Walmart). They are successful because they produce good value consistently. They make small margins on volume sales because their industry is very competitive.

 

 

Similarly, upmarket companies do well when they can deliver superior value relative to their competitors. They make large margins when they add value through branding, service, after-sales service and innovation.

 

 

It's obvious that the mass cruise lines serve the needs of over 95% of cruise customers. The companies that do poorly will eventually cut corners, retrench and shrink. The companies that do well will continue to grow in market share.

 

 

The point of this thread is to see whether HAL has the option of targeting some of the remaining 5%. This is a for-profit business. Management has to make the strategic decision of where it thinks it can create value of enough profitability.

 

 

Bruce asserts that the Prinsendam is being subsidized by the other ships.

 

 

Small ships are more expensive to run. But, the Prinsendam (21 days) commands a 40% higher tariff than the Eurodam (12 days) in Northern European. Can the Prinsendam cost 40% more to run? Is it really the Prinsendam that is subsidizing the bigger newer ships?

[cwn]

HappInVan"....Bruce repeatedly asserts that the small ship companies don't make money. He claims that Carnival has the high guest satisfaction ratings for 15 years.

He has provided no numbers. He has not identified the source of his authority. Is he TA, association executive, marketeer, investment analyst or cruise management?..."

I am finding this thread interesting also. I too would like to see the source of these comments made serval times by Bruce. I did google the Cruise Lines International Association website...there is lots of info on cruising in general, but I didn't see anything on the individual lines profit/loss or how many berths are empty on a given sailing.

 

I just got off a cruise on HAL and soon will board Regent. Later next year I will be on HAL again. Did a Carnival cruise this last summer. Last year I did a Princess cruise and a Seabourn cruise. So I have an interest in and feel I can comment on both mass market lines and high end lines. I look for a smaller ship and a interesting longer itinerary. We like the aft suites on the small Princess ships, the Neptune Lounge suites on the smaller HAL ships and the suites on Carnival. On the high end lines, I am happy with the entry level, so the price isn't too different for the same itinerary.

 

m steve....."and I like the demographics of HAL and would not want to be sailing with a bunch of overpaid Hedge fund 20 somethings. We just had our first cruise in a deluxe suite and really felt HAL did a great job of catering to us with the Neptune lounge and their concierge staff......"

 

So do I, but I also like all the service and the demographics of the high end lines and I assure you I am "no overpaid Hedge fund 20 something" just a retired high school teacher and I feel very comfortable with the other passengers on Seabourn as they look like a small part of any Princess or HAL ship I have ever sailed on!

[MightyQuinn]

I am finding this thread interesting also. I too would like to see the source of these comments made serval times by Bruce. I did google the Cruise Lines International Association website...there is lots of info on cruising in general, but I didn't see anything on the individual lines profit/loss or how many berths are empty on a given sailing.

It's easy to get info on the publicly-traded corporations but quite difficult to get a handle on the revenues & profits of privately-held companies. Maybe BruceMuzz has access to some "insider" info about the inner workings of the small ship lines.

 

But here's a data point that I found interesting. In a recent interview, Mark Conroy, President of RSSC, noted that Regent recorded their best year ever in revenues & profits. Occupancy is stable, rates are up & they've achieved some economies by combining back-of-house functions with sister cruise line, Oceania. He noted that he doesn't need "millions" to fill his ships - just 70,000 pax per year is his target for Regent & Oceania. While cruise line fortunes can change quickly, he's very bullish for 2011.

 

http://www.sun-sentinel.com/business/fl-regent-2011-20101217,0,3087988.story

[HappyInVan]

Thanks to MightyQuinn for the Regent article. :)

 

 

Regent carves out a profitable cruise niche

 

 

http://www.sun-sentinel.com/business/fl-regent-2011-20101217,0,3087988.story

 

 

These people understand their business.

 

 

“I see the large lines introducing cruising to probably millions of passengers a year, and they are creating a pool of experienced cruisers, and all I have to do is fish in that pool. I just have to convince them that there's a different way to go cruising — on a smaller, luxury ship, with no line at the port.”

 

 

Do not damage your brand. :eek:

 

 

“When the recession began, we were looking for what to do to get people traveling again and to get them to book early. WE DIDN'T WANT TO DISCOUNT OUR PRODUCT, BECAUSE YOU END UP GETTING A DIFFERENT MIX OF CUSTOMERS. Plus, you train customers not to pay $600 a day but to pay $300 a day, and we as a company can't live on $300 a day. So, we looked at what people spend money on and where we could offer value.”

 

 

It's possible to make money in a recession with a 'pay more for more' proposition. Oddly enough, how did Regent make more money by offering customers an all-inclusive package?

 

 

“We realized that the largest spend anyone had on board was shore excursions. So, we decided to give them away. Any tour we used to sell for $200 or less, we give away, and those that retail for more than $200, with limited capacity, we sell but without a big margin. About 80 percent of the tours that are taken now are the free ones... 2010 will be the best year in our history, and 2011 is tracking well. We look at forward bookings. Our average bookings are 240 days before departure, so we can see when things slow down and react to it. What we're seeing now, compared to last year, is that our occupancy is about the same and our rate is up substantially. … We're very profitable.”

 

 

So, President Mark Conroy is a real business hero. He didn't get sucked down by the recession. He did something different and it was a game changer for Regent. They're going to stay all-inclusive after the recession.

 

 

Who Dares Wins! :D

[m steve]

I'm impressed that a school teacher planned so well to be able to take these upscale cruises. I decided not to pursue teaching in my sr. year at college and went into sales. I guess you were more frugal in your savings plan. I just lived as high as I could when it was pouring in. I am happy your are not one of those hedge fund millionaires and have actually contributed to society rather than bleeding it.

[woodofpine]

I'm sure managers at cruiselines survey CC and get some things from it, but mainly get things that posters never intended and don't perceive.

 

They probably read this one for fun - laughs at the end of a long day. 'Hey Just THINK! These poster think they know something yet they're totally clueless of this business!' "Ha! Ha!!"

 

Regent... as to HAL... A little piece of a large private company versus a fairly good size piece of a public company. How many people posting here have ever worked in the cruise industry? Nah - me neither, so I'd not presume to know how they SHOULD do it. I drive a call - doesn't make me an expert on the auto industry (hey I worked for Ford once... still not an expert).

 

BTW - Regent and Oceania (and NCL largely) are owned by the same company... that owns Harrahs casinos, AMC theaters, as well as Coldwell Banker and Century21 realtors.

 

We either buy their product - or we don't. They don't craft it for us. As long as your sailing HAL (then they needn't do a thing). If you want to sail with Oceania or Regent (or NCL), have to!

 

The Sun-Sentinel piece is pure fluff. It tells you nothing - and there is no profit source except bean counters with Apollo (that bought both Regent and Oceania within a year or so... From owners that needed to BAIL!?? [probably])

Edited December 20, 2010 by woodofpine

[world~citizen]

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

 

Can't argue with those numbers. They are really kind of scary.

[bepsf]

Regent carves out a profitable cruise niche

http://www.sun-sentinel.com/business/fl-regent-2011-20101217,0,3087988.story

These people understand their business.

 

Yes, but once again it's far easier to do that when you're looking for only 1890 passengers to fill every berth on 3 ships every two weeks...

...which is less than 1/12th the number of berths HAL has.

 

HAL now has 6 vessels with more staterooms/ship than the capacity of the entire Regent fleet.

Considering that at least half of these 6 ships are deployed on 7-day cruises at any one time throughout the year, HAL now needs to find @12,000 passengers every two weeks for those 3 ships alone (not to mention the other 12 ships in the fleet) in the same timeframe Regent has to find 1890 total.

Edited December 20, 2010 by bepsf

[Jade13]

BTW - Regent and Oceania (and NCL largely) are owned by the same company... that owns Harrahs casinos, AMC theaters, as well as Coldwell Banker and Century21 realtors.

 

I never knew that.