The market reality behind Encore’s design

[mikegw2]

I embark the Encore on February 2, so I’ve been reading the posts about the ship design with some interest.  We have all known (or should have known if we can read and look at diagrams) how the Encore was designed—so passengers have little reason to be surprised or indignant. To my point, there are some pretty dramatic market realities driving new ship design and it has nothing to do with the people who think they should be the center of NCL’s ship-design universe.

 

First, NCL would have been stupid to build Encore with the same features that they offer on other ships sailing the same waters at the same time.  Anyone who understands marketing strategy knows that you drive growth through differentiation and appeal to a wide range of market segments. No company grows by being the same or staying the same. And, NCL is not going to grow by catering to small and shrinking group of cruisers that must have pool and deck spaces as a primary ship feature.

 

Please read market research and commentary by industry analysts, cruise industry trade groups and companies like JD Power that measure consumer satisfaction. The outdoor cruise crowd is a small and declining group while the family segment has driven industry growth for the past 10 years.  Passenger traffic has grown 7% per year average, with 100% of the growth coming from families headed by millennials and GenX’rs.  The outdoor pool-side & open deck passenger segment has dropped from 11% of cruisers down to 6% over that same 10 year period.

 

When 11,000+ cruise purchasers were asked in a 2018 survey what was important or very important in selecting a cruise ship and destination, here’s what they said (the survey excluded passengers on high-end luxury lines):

 

42% - onboard family activities (racetrack, water slides, laser tag, VR & arcades, kid’s programs, etc.)

19% - family friendly ports, excursions & on-shore activities

16% - adult & special interest excursions and activities

11% - onboard adult entertainment & activities (shows, parties, spa, casino, etc.)

10% - indoor public spaces (bars, thermal suite, atrium, observation lounge, Haven)

6% - outdoor public spaces (pool deck, sun decks, VIBE, Spice H20, etc.).

 

Only 6% of cruise purchasers indicated outdoor public spaces were important and they were equally divided – 3% who preferred quiet spaces and 3% who preferred more lively spaces (pool area, Spice H20).  My guess is that the 3% who want quiet spaces are willing to pay to get away from the 3% pool party crowd, so VIBE was born…

 

Why would NCL continue to build ships with features that only 6% of passengers want most and ignore what 42% of passengers want most? 

 

I’m speculating here, but I believe that space utilization may be an increasing consideration for cruise lines. I read in one of the CLIA reports that the global industry average across all fleets is 131 days per year/per ship where open decks and pools are usable and 234 days per year where the pool and top decks can’t really be used (rain, snow, too windy, too cold, rough waters, etc.).  Since the pool area & open decks can only be used 35% of the time, depending on how a ship is deployed these are very likely money losers in terms of revenue per square foot.  I’ve been on a seven day Caribbean cruise and a seven day Bermuda cruise where the pool was empty and the chairs stacked for the entire length of the cruise—not a single outdoor day out of 14 days and people were crammed into the few indoor spaces available.

 

Lastly, only 4.5% of US adults has ever set foot on a cruise ship (11 million adults), so NCL’s big job is to attract the 258 million adults in the USA who have never cruised (and more than that from other countries).  NCL has four Jewel class ships with tons of pool deck and upper deck space, they have a couple year-around party ships, and they have four BA & BA+ ships with large pool decks, Spice H20 and free upper deck space – are they really going to attract any of those 258 million potential new cruisers by building more of the same?  Hardly….

 

The entire global cruise industry only earns 2% of the world’s leisure/vacation travel expenditures, so while many of us here on CC might really like cruising the cruise industry is really small potatoes. NCLH and other cruise lines have a lot of work to do to compete with other travel options, and that’s likely to remain their focus. They will build what most people want to buy…

[gmbhardy]

Great post!!!

[BirdTravels]

I really don’t understand the OP’s point. 
 

if the OP has been reading the “complaints”, the Encore maximizes features in category 1 while minimizing the last category. 
 

With the Encore, NCL is catering to the top market interest, NOT the bottom. 

[Steff79]

I think escape is much more family friendly then Encore. 

have you a source how much people like

nickel and dime on board? The encore is the queen of nickel and dime. 
It sounds like a marketing article from

ncl.  

Edited January 30, 2020 by Steff79

[david_sobe]

Someone is really excited for their upcoming trip and has too much time on their hands 😆

[tx121]

I agree with the OP about the shift of the cruise industry going towards a more family friendly environment. However what happens during school months when families aren't cruising and the majority of cruisers are adults? The venues such as lazer tag, go karts, VR, etc are underutilized and the pool deck space becomes very limited. 

There's a reason why the Vibe passes are selling out and why people are complaining in their reviews that they cannot find a space to lounge out in the sun in the free area. 

NCL is a business and is trying the maximize their profits with this ship and see how far they can go. Basically the OP and NCL are saying, if you don't like what we are doing with this ship, there are other ships in the fleet to choose from. 

I will also be cruising on the Encore this Sunday and will see how this cruise experience goes. I do not plan to use the go karts, lazer tag, vibe or VR room since those things do not interest me.

I think the OPs survey was polled by just families. I bet those numbers would be MUCH different if they were asked by every demographic.

 

 

 

 

 

 

Edited January 30, 2020 by tx121

[luv2kroooz]

39 minutes ago, tx121 said:

I agree with the OP about the shift of the cruise industry going towards a more family friendly environment. However what happens during school months when families aren't cruising and the majority of cruisers are adults? 

Great point. I am reminded of my recent Canada/New England cruise on Dawn. The entire back area had dinosaurs, waterslides and spray fountains. Granted the weather wasn't great for swimming, but there were no kids onboard and the area was not used for the entire cruise. 

 

All other things equal, its one of the reasons that we'd consider HAL or Princess or Jewel class.  Just aren't interested in waterslides, go-karts, roller coasters, ropes courses, flowriders, etc.

Edited January 30, 2020 by blcruising

[BirdTravels]

We still would choose one of the big ships, even if we don’t partake in laser tag. We we to be entertained at night and having only the Bliss Lounge or the tiny Magnums bar as entertainment space is VERY limiting. 
 

The Encore has broadway entertainment, the District, Cavern, Q, Malting, Sugarcane, Skyline, the Observation Lounge, the Social and more with great live entertainment every night. And if you just want to chill, movies on Deck many nights. 

[bkrickles1]

I just got off Encore 1/26 and for 7 days we never even walked over to the go-karts, laser tag or VR as we had no interest.

In fact, except for taxes in port for drinks, shore excursions and dsc, we had no extra expense charged to our account.

We were not nickle and dimed at all. 

We enjoyed the incredible amount and quality of "free" entertainment that was available everywhere on this very beautiful ship.

There wasn't enough time in the evening to get to it all, but we tried. Lmao!

The Encore is a mega ship in the truest sense of the word. If you are confused about what you want out of a cruise or are unprepared for the twists and turns of a modern mega ship, it could be highly frustrating.

[RedwingHockeyFan]

The numbers are a bit misleading for a couple of reasons.  1. Outside deck space is really only important for warm weather cruises.  2. When booking a cruise, people would assume that there is outside deck space so they would be looking for the other intangibles to make their decision. 

 

The outdoor deck space was more of a question of yes or no but not size.  It won't take long for it to become a higher percentage when more and more ships start reducing the size.

[mikegw2]

8 hours ago, BirdTravels said:

I really don’t understand the OP’s point. 
 

if the OP has been reading the “complaints”, the Encore maximizes features in category 1 while minimizing the last category. 
 

With the Encore, NCL is catering to the top market interest, NOT the bottom. 

The point isn't that NCL is catering to the top market versus bottom. The point is that there has been a huge shift to attract families where 100% of the market growth has been for the last 10 years.  Cruising is no longer an adult only activity and new ships are reflecting that in their design--and a lot of people here on cruise critic apparently think this is the end of the world.  My wife and I are in our mid-60's so the family-oriented stuff doesn't appeal to us, but we still prefer the larger ships because of the variety of restaurants, bars, entertainment, thermal suites, etc.  We just ignore the chaos around the water slides, racetracks, and other venues and focus on what we want to do...

[SeaShark]

3 hours ago, Steff79 said:

The encore is the queen of nickel and dime. 

 

I haven't been on the Encore so I'm curious as to what is behind that statement.

 

Could you elaborate as to why this is? What do they force you to pay for on the Encore that is free on other ships? What free items has NCL taken away on the Encore?

 

[Cruisercl]

Hi OP,

Very interesting post to say the least. 

It appears to be a `marketing` post. Using biased, descriptive statistics offers, not much credibility to your input/point. All of your references are, well, marketing driven. We all know how marketing works getting people to purchase a product.

Anyone in research knows that surveys are the weakest tool used, as the response rate is usually low and often completed by those wanting to complain.  Very one sided and also biased. Qualitative research is burdened with this so not as robust and is viewed as such.

This is how marketing research is done, I have worked with it, so take all of the marketing analysts data results with a grain of salt or with eyes open to bias.

This is my opinion based on experience but I do respect your opinions.

Safe sailing all! ☺

 

[mikegw2]

2 minutes ago, RedwingHockeyFan said:

The numbers are a bit misleading for a couple of reasons.  1. Outside deck space is really only important for warm weather cruises.  2. When booking a cruise, people would assume that there is outside deck space so they would be looking for the other intangibles to make their decision. 

 

The outdoor deck space was more of a question of yes or no but not size.  It won't take long for it to become a higher percentage when more and more ships start reducing the size.

I agree with your point about deck space in warm weather cruises and that relates to the part of my post about year-around space utilization problems.  The Caribbean cruise season is only 5 months long, so what do you do with a ship the other 7 months if it's been designed for warm weather cruising. Cruise lines have tried to design ships for specific markets (Joy, Bliss) but that rarely works out well.  

 

I don't think people should assume anything when they book a cruise--if they are complacent and don't do any homework then there is a good chance they'll be disappointed. The good news is that there are still a lot of great ships with tons of outdoor space, so everyone can still get want they want most. Those of us loyal to NCL probably have expectations that each ship they build will be suited to us.  However, 85% of cruise passengers aren't loyal to a specific cruise line - they buy based on the ship, the itinerary and budget first and the particular cruise line may be irrelevant for them.

[luv2kroooz]

14 minutes ago, SeaShark said:

 

I haven't been on the Encore so I'm curious as to what is behind that statement.

 

Could you elaborate as to why this is? What do they force you to pay for on the Encore that is free on other ships? What free items has NCL taken away on the Encore?

 

No one is being forced to do anything. The point is that there are tons of activities and things being added to the cruise ships. But, if you want to enjoy them on the vacation, you'll have to pay for them. Laser tag, go karts, etc. A dollar here, a dollar there....this is considered by many to be a nickel and dime approach. Not agreeing or disagreeing, just helping you understand the theory.

Edited January 30, 2020 by blcruising

[mikegw2]

3 hours ago, Steff79 said:

I think escape is much more family friendly then Encore. 

have you a source how much people like

nickel and dime on board? The encore is the queen of nickel and dime. 
It sounds like a marketing article from

ncl.  

I haven't sailed the Escape, so I can't compare the two ships. My post didn't have anything to do with "nickel and diming", but I'll address that anyway.  When I first started cruising NCL they had no drink package, no dining plans, no free internet, no shore excursion credits, no free airfare and we had pay to use the thermal suite.    For a seven day cruise, my wife and I would spend $800 to $1000 on soda and alcohol, $400 to $500 in the specialty restaurants, $300 - $400 on thermal suite passes, and on occasion full price shore excursions through NCL.  Now, even paying the gratuities on the drink package and dining plan, we save about $1,500 from what we used to spend on a 7 day cruise.  Our last cruise we were "nickeled and dimed" for $37 because my wife likes to drink sidecars that weren't in the basic drink package and she wanted something in one of the restaurants that was a $4 upcharge.  I'll take the $1,500 savings vs the $37 upcharges anytime. It's not always a direct comparison, but I am spending about $900 less on a seven day cruise than I was 10 years ago.   

[mikegw2]

3 hours ago, david_sobe said:

Someone is really excited for their upcoming trip and has too much time on their hands 😆

I wish.  Just two really bad sleepless nights...

[RedwingHockeyFan]

37 minutes ago, SeaShark said:

 

I haven't been on the Encore so I'm curious as to what is behind that statement.

 

Could you elaborate as to why this is? What do they force you to pay for on the Encore that is free on other ships? What free items has NCL taken away on the Encore?

 

 

I can't speak for Steff but from what I have seen is that compared to the Escape, Encore has removed the ropes course and min-golf which were free and replaced them with the race track and laser tag which are not.  And they removed Spice which was free and expanded Vibe which is not.

[mikegw2]

36 minutes ago, Cruisercl said:

Hi OP,

Very interesting post to say the least. 

It appears to be a `marketing` post. Using biased, descriptive statistics offers, not much credibility to your input/point. All of your references are, well, marketing driven. We all know how marketing works getting people to purchase a product.

Anyone in research knows that surveys are the weakest tool used, as the response rate is usually low and often completed by those wanting to complain.  Very one sided and also biased. Qualitative research is burdened with this so not as robust and is viewed as such.

This is how marketing research is done, I have worked with it, so take all of the marketing analysts data results with a grain of salt or with eyes open to bias.

This is my opinion based on experience but I do respect your opinions.

Safe sailing all! ☺

 

I do a lot of customer and market research in my job and I agree with you that a lot of what gets published is flawed or total garbage.  I used only data from investment analysts and cruise industry trade groups, and none of this is from NCL.  It really applies to all companies in the cruise industry.

 

I cruise NCL now, but I've also cruised Carnival, Princess and Celebrity in the past and liked a lot about their product.  I also own stock in RCL, Carnival and NCL so I don't really don't have any bias as long as the whole industry does well. Bias would also suggest I have a bent or hidden agenda towards my preference and that's clearly not the case.  I'm 64 years old and don't use any of the family-oriented features they are putting on cruise ships, so why would I argue against my own position with false or biased data?

[SeaShark]

46 minutes ago, blcruising said:

No one is being forced to do anything. The point is that there are tons of activities and things being added to the cruise ships. But, if you want to enjoy them on the vacation, you'll have to pay for them. Laser tag, go karts, etc. A dollar here, a dollar there....this is considered by many to be a nickel and dime approach. Not agreeing or disagreeing, just helping you understand the theory.

 

That kind of just kills the theory. Nickel and diming has to be forced. For example, a forced 20% gratuity on your specialty restaurant meal is nickel and diming. You have a choice of whether or not to pay to eat at the restaurant (this is an option), but you are forced to pay a gratuity regardless of the level of service received (this is nickel and diming). Having options or even offering a wider variety of options is never nickel and diming because the consumer always has the choice.

 

When we cruise, we are all given a sign and sail card to charge purchases, unlock our cabin door, and for use as ID in leaving the ship. These cards are necessary and they are included. IF the cruise line were to tell you at check in that there was now a $5 fee to get your card...which you HAVE to pay because you HAVE to have a card...that fee would be nickel and diming as it is NOT an option.

 

Otherwise, how would you react to the local shopping mall where EVERYTHING has a price tag? Never heard people say that the mall was nickel and diming.

[luv2kroooz]

46 minutes ago, mikegw2 said:

 For a seven day cruise, my wife and I would spend $800 to $1000 on soda and alcohol, $400 to $500 in the specialty restaurants, $300 - $400 on thermal suite passes, and on occasion full price shore excursions through NCL.  

Man, did you get ripped off. Holy cow!! Today's prices must look like bargains to you!!

Edited January 30, 2020 by blcruising

[mikegw2]

12 minutes ago, blcruising said:

Man, did you get ripped off. Holy cow!! Today's prices must look like bargains to you!!

Well, the pricing structure certainly was different then--partially offset by lower cabin costs, I suppose.  Sodas @ #2.50 each, wine @ $7 to $9 per glass and cocktails @ $10 to $12, it adds up fast.  Five or 6 meals in specialty restaurants for $400 to $500 wasn't too bad considering appetizers, salad, entrée and desert and tips for two people--about the same as eating out at home.  I do think NCL's new pricing approach makes it easier for people to stay on budget...

[Crazy planning mom]

i agree with OP.   I have lived in a cooperative community with an outdoor pool for over 20 years and have a 17 year old son.

When he was younger, he loved the pool but now he has no interest.   Our pool used to be filled with kids but now i rarely see a kid there over 10 because they are all on their devices..    Its mostly an adult crowd now.

[ksmcdonald]

53 minutes ago, SeaShark said:

 

That kind of just kills the theory. Nickel and diming has to be forced. For example, a forced 20% gratuity on your specialty restaurant meal is nickel and diming. You have a choice of whether or not to pay to eat at the restaurant (this is an option), but you are forced to pay a gratuity regardless of the level of service received (this is nickel and diming). Having options or even offering a wider variety of options is never nickel and diming because the consumer always has the choice.

 

When we cruise, we are all given a sign and sail card to charge purchases, unlock our cabin door, and for use as ID in leaving the ship. These cards are necessary and they are included. IF the cruise line were to tell you at check in that there was now a $5 fee to get your card...which you HAVE to pay because you HAVE to have a card...that fee would be nickel and diming as it is NOT an option.

 

Otherwise, how would you react to the local shopping mall where EVERYTHING has a price tag? Never heard people say that the mall was nickel and diming.

 

 

You are 100% correct!  I think the "nickle and diming" expression comes from people who have cruise for 30-40 years, when going on a cruise, there was no charge for anything except drinks and tips at the end.  There really was no cash registers on the ship to take your money, for anything!  It truly felt all inclusive.  Times have changed but the price of the cruise really hasn't.  I just pulled a receipt from a cruise we took for our honeymoon 32 years ago.  It was $799 per person for a balcony on the Carnival Holiday (7 day) in Sept (hurricane season).  Prices really haven't gone up that much in 30 years.  Instead of raising the price of the cruise, the cruise line now make their money on casino, excursions, laser tag, vibe, spa, etc.  This is keeping the price of the cruise down for people that don't want those extras, yet offering extras for the people that would like to partake in these activities.  It is not fair to now say, "they are nickel and diming" us, they are giving people options.  Don't buy the extras if you don't want it.  

 

[tx121]

1 hour ago, ksmcdonald said:

 

 

You are 100% correct!  I think the "nickle and diming" expression comes from people who have cruise for 30-40 years, when going on a cruise, there was no charge for anything except drinks and tips at the end.  There really was no cash registers on the ship to take your money, for anything!  It truly felt all inclusive.  Times have changed but the price of the cruise really hasn't.  I just pulled a receipt from a cruise we took for our honeymoon 32 years ago.  It was $799 per person for a balcony on the Carnival Holiday (7 day) in Sept (hurricane season).  Prices really haven't gone up that much in 30 years.  Instead of raising the price of the cruise, the cruise line now make their money on casino, excursions, laser tag, vibe, spa, etc.  This is keeping the price of the cruise down for people that don't want those extras, yet offering extras for the people that would like to partake in these activities.  It is not fair to now say, "they are nickel and diming" us, they are giving people options.  Don't buy the extras if you don't want it.  

 

 

If you consider inflation, $799 was worth a lot more in 1988 than today. If you go on several websites that provides an inflation calculator,  most prices come out to this amount below, give or take.

$799 in 1988 equals $1,739.47 in 2019.

So back then you didn't feel nickle and dimed because the cost was already included in your cruise fare since you were paying a lot already upfront. The food quality in the MDR back then was the same as what you get in the specialty restaurants now, the drink package didn't exist because it was all inclusive with the cruise. 

On a side note, I kind of chuckled when I saw Carnival Holiday. Imagine with the inflation rate if you asked someone to pay $1700+per person (balcony) for a Carnival cruise today? lol! There are a lot more options and ships to choose from now which is why the prices have to be attractive and competitive. 

Yes you will probably end up spending this much on the cruise anyway with all the extras, but that's how marketing tricks us in to thinking we are getting a good deal when in fact, you are still spending as much as when things were inclusive if YOU choose to.

 

 

 

 

 

 

 

 

 

Edited January 30, 2020 by tx121