Corporate mindset: X vs. HAL

[lysolqn]

Found this interesting post on the HAL boards.

 

"I read this in the CC.com news section today:

'Interestingly, opinions on pricing strategies varied across the board. Dan Hanrahan, CEO of Celebrity and Azamara Cruises, indicated his discomfort with offering the Celebrity brand in the marketplace below a certain price. He noted that Celebrity won't take business if it'll hurt "pricing integrity" or adversely affect the brand image. On the flip side, Holland America's Stein Kruse countered: "It's simple. Not filling our ships does not make sense; our business model is based on [filling ships].'"

 

Guess it's a matter of how low do you go to fill ships and at what point does the quality of the product suffer?

 

Comments, anyone?

[BroncosFan2010]

Wow! That actually makes me want to sail with Celebrity more!

[usha]

Wow! That actually makes me want to sail with Celebrity more!

My sentiments, exactly!:)

[Denny01]

According to an article on SeaTrade Insider, last Fall saw a large number of cancellations, but it's back to normal and bookings are OK. It states 'promotions' are filling the berths so pricing is not deteriorating. Not sure what the difference between a 'promotion' and lower pricing is. I guess they keep the SR price set and give OBC's or free insurance and so on.

 

It also reported that although bookings are down this year, more people are booking closer to the sail dates 'without further price reductions'.

 

Interesting. We have a cruise in Nov 09. A B2B Med Cruise and TA on Solstice, and thought about cancelling the Med leg and only going TA. But we want to stick with it, and just reduce other options, such as lowering our touring costs and fun-money expenditures. We got our TA Balcony CC in Nov at less than what it is now.

 

Denny

[Karynanne]

What a joke! Celebrity has cut prices drastically, just like HAL and all the other cruise lines.

Here is a Celebrity cruise for about $50/night.

 

http://www.onlinevacationcenter.com/special_deal.cfm?email=ob&specialsID=14995&TSID=5&encldid=B826F037-0B2E-40D9-95C0-B2B05A4F2539&logid=18179

 

Celebrity is still my 1st choice, but everyone is dropping prices.

 

If I'm doing my math correctly, this cruise is for 15 days @1399.00/pp. That's $93.27 per day, not $50.00.

[Route6A]

Prices seem to be dropping dramatically on some Celebrity cruises close to departure date. I have moved up two categories on my next cruise due to this, and the reductions both came within the past week. I am sailing in the same suite on the same ship for more than $1,000 less than I paid in 2005...and the cruise is one day longer. Same basic itinerary. A bargain.

[hcat]

My sentiments, exactly!:)

 

me too!

[cruzendude]

What a joke! Celebrity has cut prices drastically, just like HAL and all the other cruise lines.

Here is a Celebrity cruise for about $50/night.

 

http://www.onlinevacationcenter.com/special_deal.cfm?email=ob&specialsID=14995&TSID=5&encldid=B826F037-0B2E-40D9-95C0-B2B05A4F2539&logid=18179

 

Celebrity is still my 1st choice, but everyone is dropping prices.

 

X is dropping prices a bit BUT this isn't a good example, repositioning cruises have ALWAYS been relatively cheaper cruises.

[Veronica13]

Dan's full of it!!!

"Discomfort" hasn't kept him from slashing prices for the last several years and tearing down the good name of Celebrity. Haven't all of you noticed all the NEW Celebrity people around here? That's because they can afford it now!! I'm sure he experiences no "discomfort" receiving his huge bonus checks every year for squeezing out every penny from the ships.

 

Read it again people - it's PROPAGANDA. Celebrity has been and will continue to lose it's reputation and continue to drop prices.

 

THANKS DAN.....NOT!!!!

:mad:

PLEASE STEP DOWN and let someone bring Celebrity back to it's Celebrity Status.

[SusaninCali]

Veronica13, do you really think there's a LOT of new people to Celebrity on price alone? How much have prices come down?

 

I've just booked my first cruise ever (the 14-nt 10/3 Medit. sailing of the Summit). DH and I really wanted to go on Oceania but their good itins didn't mesh with our schedules. And Regent's were too short.

 

Anyway, I don't think I'm getting a super deal on my CC cabin but that's the best itin we saw. I've seen posts here that indicate the same itin on X last year was cheaper than what I'm looking at right now. From what I've read, looks like X is really lowering prices in the Caribbean and offering great deals to UK residents.

 

I think you're one of people who have mentioned that X has slipped in areas other than food. In your opinion as a very experienced cruiser what are those other slips, when did they start, and what's coming next?

 

What do the rest of you think?

[pseudochicken]

X is dropping prices a bit BUT this isn't a good example, repositioning cruises have ALWAYS been relatively cheaper cruises.

 

Which doesn't make sense to me since they seem the most interesting to me. I enjoy Caribbean cruises, but I would get bored real fast if I took one more than once every 3-4 years or so.

[Karynanne]

Which doesn't make sense to me since they seem the most interesting to me. I enjoy Caribbean cruises, but I would get bored real fast if I took one more than once every 3-4 years or so.

 

Repostioning cruises have always been a great value. There are usually quite a few sea days in a row, and you don't always have ideal weather. The beauty of this type of cruise (crossing) is along with the some ports, you have very relaxing sea days.

[TomTN]

If I'm doing my math correctly, this cruise is for 15 days @1399.00/pp. That's $93.27 per day, not $50.00.

 

Please revisit this site and read the details. It is 15 day @ $699 as of 9:05 pm edt.

[Karynanne]

Please revisit this site and read the details. It is 15 day @ $699 as of 9:05 pm edt.

 

I apologize. I didn't scroll down to see the Cat. Z price. Quite often a cruise is advertised at a low rate for an inside guarantee cabin.

[hubofhockey]

Dan's full of it!!!

"Discomfort" hasn't kept him from slashing prices for the last several years and tearing down the good name of Celebrity. Haven't all of you noticed all the NEW Celebrity people around here? That's because they can afford it now!! I'm sure he experiences no "discomfort" receiving his huge bonus checks every year for squeezing out every penny from the ships.

 

Read it again people - it's PROPAGANDA. Celebrity has been and will continue to lose it's reputation and continue to drop prices.

 

THANKS DAN.....NOT!!!!

:mad:

PLEASE STEP DOWN and let someone bring Celebrity back to it's Celebrity Status.

 

I may be one of the new people. I see decent pricing on Solstice Med cruise next 4th of July. I hope having people on Celebrity like me and my wife doesn't ruin the reputation of Celebrity. Maybe you'll luck out and I'll go on Royal Caribbean or Princess. But Solstice looks like a better ship and itinerary than Voyager of Seas.

[The_Big_M]

Haven't all of you noticed all the NEW Celebrity people around here? That's because they can afford it now!!

 

Yes, it's such a disgrace that an eXclusive club has been opened up to outsiders. I really don't know what Dan was thinking by letting the price in some trips fall such that new cruisers would select the line. Perhaps he should have just restricted promotions to Captains club members and a limit on new cruisers (introduced from word of mouth only) of no more than 5% per sailing.

[Cruise Junky]

The only reason we're sailing HAL is May is the dirt cheap price. We had a trip planned for the same week to the BC wine country. If the price wouldn't have been so enticing, we wouldn't be cruising. Is HAL losing anything by offering this cheap price? would they have been better off not having a potential new fan and sailing 1/2 empty? Hell No!

[Denny01]

Veronica 13 – This is probably one of the first times I've responded directly to someone. I try to keep my posts more general – direct responses usually don't turn out well. But I just have to ask a few questions in response to your statements:

 

You seem upset that Celebrity's lowering prices has brought all these 'New people' on Celebrity CC.

Question: Not sure what you mean by 'new'. According to your info, you joined cc in July 08 – doesn't that mean you are one of these 'NEW' people of 7months? I've only been on cc for 14months and don't think of myself as an old-hand. I'm still kind of new at this. So who are these 'New' people?

 

'Question: You said 'They' can afford it now. Who is 'They'? I don't think there are a lot of people who go around looking for expensive cruises just because they are expensive. I for one, like to get my money's worth and do look at prices. Cruising is the best for the money for vacations, and Celebrity provides, for me, a good value for the price. I've sailed Celebrity (plus 3 other lines) since 1994 and haven't seen that big drop in quality some seem to see. Sailed Carnival this last Thanksgiving on a 5-dayer that would, I guess, attract 'Them'. Lovely cruise and lovely passengers. Even 'Them'.

 

Question: you accuse the Celebrity CEO of squeezing every penny out of every ship. Isn't that the point of any business? In my company, we review our outlay and income every month. Evaluate what is productive and what isn't. It's called business. If you cut back on what you provide and you then loose your base – big mistake. If you find ways of providing quality at less outlay – good deal. My subjective opinion is Celebrity still provides a quality experience.

 

The trouble with emails, and posts such as your's and mine is we are not talking face-to-face and may miss what the true meaning of phrases such as 'New People' and 'They can afford it now', and so on. We can easily read into these statements more than what is meant. I hope I've read too much into your comments.

 

Denny

[Andy]

Hi Everyone !

 

This debate reminds me of the chicken and the egg discussion :). It must be extremely difficult to maneuver any business through such difficult economic times.

 

For those who are quick to bash Mr. Hanrahan, I feel it should be noted that similar comments were made by Mr. Fain (Chairman & CEO of Royal Caribbean) in Late January. This seems to be the message the entire corporation intends to deliver. Management can say they want to try and keep prices up, but will it happen ? I have to believe that supply and demand will ultimately dictate the pricing. Another point to consider, is that passengers are shopping price more than ever, and you should not want your loyal passengers looking to book your competition.

 

Getting back to the question, from a business standpoint, it's hard for me to understand the logic of sailing a ship at anything much less than full capacity. An empty cabin does not buy drinks, photos, shore excursions, souveneirs, nor do they gamble in the Casino.

 

Another thing that frustrates me, is that onboard revenue is critical right now, and Celebrity should do more to generate it. I believe that bringing value to the customer is the way to go. Why not look for ways to get customers to spend, where they might say "that's too much" ? Trying to sell a 40.00 Solstice Polo Shirt in the Gift shop and having them collect dust... and watching the employees stand around all week, is not going to get it done. Why not sell the Shirt for 20.00, watch them fly off the shelves.... make a decent profit, and keep the register ringing ? Why not charge 5 or 6 dollars for a drink instead of 7-9 dollars ? Why not add a few extra coupons to the Captains Club perks, to bring more value to their customers ? I believe this would bring a great deal of mileage such as added revenues, profits, and most importantly, customer loyalty.

 

For a Parent company that asks "Why Not", I believe My version of "Why Not" makes a great deal of sense :)

[Veronica13]

Hi Everyone !

 

This debate reminds me of the chicken and the egg discussion :). It must be extremely difficult to maneuver any business through such difficult economic times.

 

For those who are quick to bash Mr. Hanrahan, I feel it should be noted that similar comments were made by Mr. Fain (Chairman & CEO of Royal Caribbean) in Late January. This seems to be the message the entire corporation intends to deliver. Management can say they want to try and keep prices up, but will it happen ? I have to believe that supply and demand will ultimately dictate the pricing. Another point to consider, is that passengers are shopping price more than ever, and you should not want your loyal passengers looking to book your competition.

 

Getting back to the question, from a business standpoint, it's hard for me to understand the logic of sailing a ship at anything much less than full capacity. An empty cabin does not buy drinks, photos, shore excursions, souveneirs, nor do they gamble in the Casino.

 

Another thing that frustrates me, is that onboard revenue is critical right now, and Celebrity should do more to generate it. I believe that bringing value to the customer is the way to go. Why not look for ways to get customers to spend, where they might say "that's too much" ? Trying to sell a 40.00 Solstice Polo Shirt in the Gift shop and having them collect dust... and watching the employees stand around all week, is not going to get it done. Why not sell the Shirt for 20.00, watch them fly off the shelves.... make a decent profit, and keep the register ringing ? Why not charge 5 or 6 dollars for a drink instead of 7-9 dollars ? Why not add a few extra coupons to the Captains Club perks, to bring more value to their customers ? I believe this would bring a great deal of mileage such as added revenues, profits, and most importantly, customer loyalty.

 

For a Parent company that asks "Why Not", I believe My version of "Why Not" makes a great deal of sense :)

 

All true. The price cuts started years before the recession, hence my ability to afford CC verandas solo now. I wish they had kept the prices the same, as you say kill over "hidden" sales ripoffs on board and kept the QUALITY.

 

Like you say, chicken and egg....kill quality experience and lose loyality or maintain full ships. Seems like a short term, bad business decision. While it may keep them "afloat" for awhile, what happens when the recesssion ends and they are left with a spoiled rep? IMO

 

In my company, I maintain my premium prices for a premium service. Will I suffer in the short term? Yup. But my loyal clients will still be there when this all shakes out.

[TomTN]

Found this interesting post on the HAL boards.

 

"I read this in the CC.com news section today:

'Interestingly, opinions on pricing strategies varied across the board. Dan Hanrahan, CEO of Celebrity and Azamara Cruises, indicated his discomfort with offering the Celebrity brand in the marketplace below a certain price. He noted that Celebrity won't take business if it'll hurt "pricing integrity" or adversely affect the brand image. On the flip side, Holland America's Stein Kruse countered: "It's simple. Not filling our ships does not make sense; our business model is based on [filling ships].'"

 

Guess it's a matter of how low do you go to fill ships and at what point does the quality of the product suffer?

 

Comments, anyone?

 

Mr Hanrahan is stuck between a rock and a hard place. When I reread the original post it says he "indicated his discomfort with offering the Celebrity brand in the marketplace below a certain price"

 

I imagine he is in a lot of pain(discomfort) right now because he has no other choice other than lower prices and lower expenses. Otherwise his ships will not stay afloat. I might be RCL who has dictated lowering prices, but they have been lowered.

 

I suspect that the quality has suffered for all cruise lines as they have less revenue.

[TomTN]

I may be one of the new people. I see decent pricing on Solstice Med cruise next 4th of July. I hope having people on Celebrity like me and my wife doesn't ruin the reputation of Celebrity. Maybe you'll luck out and I'll go on Royal Caribbean or Princess. But Solstice looks like a better ship and itinerary than Voyager of Seas.

 

Welcome Ljberkow. I believe you will enjoy your Solstice cruise next summer, although I have never been on that Celebrity ship. Those Med cruises are typically so port intensive that any ship will do. You'll be plumb tuckered out after a day at Florence, Amalfi, Athens, etc.

 

The current economic situation has given us a time where those who can cruise are looking at price and value. Many people are choosing different lines. I have always felt that Celebrity was the best value for what is important to DW and I.

 

FWIW, I sailed on Princess last fall for the first time. Comparable to Celebrity, but different. I suppose you could make a list of 100 items to compare the lines, and find slight differences on 70-80% of those items. Nonetheless I had a great cruise, and a new experience which was great.

The same is true for HAL. Alike, but somewhat different.

 

Enjoy your cuises.:)

[snowglobe]

I disagree with Veronica's assessment that the new Celebrity cruisers who recently popped up on the CC boards have been lured to the X brand strictly by cheaper prices. Simply not true. I could never cruise before, always wanted to, and now I can - the cost of cruising being a total non-issue as to why.

 

I booked my first upcoming cruise back in June 08 and joined CC immediately thereafter. What lured me specifically to the Celebrity brand is their non-smoking policy. When HAL introduces a strict non-smoking policy and offers a cruise I would like to book, I'll gladly give them a try too. I also suspect that I am not alone to finally be introduced to cruising (thanks to Celebrity) because of the ability to breathe clean air (and not be ill) during our vacation. :D

 

I feel saddened by Veronica13's POV. She directly bemoans the diminished "quality" of the cruisers themselves (her infamous "pig" comment on the buffet thread...). Her problem, through repeated posts, is indeed her perception that Celebrity is no longer an exclusive "Premium" club. I happen to represent the very worse of the new cruisers she so vehemently abhors: inside cabin, non-smoker, and cruise newbie - "the world gone to heck in a handbasket" to quote her own words... :rolleyes:

 

Everyone knows that any business thrives in the long-term with a balance of new as well as repeat customers. I am a new customer, about to become a loyal one, since Celebrity's non-smoking policy has finally opened up cruising vacations for me. How each company weathers this period remains to be seen. I personally hope that Celebrity will be around for a long time - I've got a lot of cruising to catch up to! ;)

[Sky Sweet]

In any economy there are two types of consumers - people who are looking for the cheapest price and those who want a very good product at a reasonable price (value).

 

The latter was the key to Celebrity's success in the past because its passengers felt that they got a much best product for a slightly higher price. Then Celebrity decided to expand their share of the market by competing on price, even before the economy slipped, and is now considerably less expensive than most of the other mass market cruise lines. If Celebrity continues to cater to the former, they will be attracting passengers who will literally jump ship whenever a competitor has a lower price. At the same time their traditional passenger base will erode if they feel that the Celebrity product is not what it use to be, and other cruise lines offer a better "value"

 

As bad as the economy is, it will recover, but once a company earns a reputation for cutting corners, it is very hard to turn that image around.

 

With this in mind, I think Celebrity should charge enough so they don't have to cut corners, even if it means not sailing at full capacity.

 

I realize that Celebrity is still more formal than other mass market cruise lines, as well as most of the luxury ones, and for some people that is so important that they will overlook everything else. However, that segment of the market is not as great as one would think from reading these message boards. After all, if it was Celebrity would not need to cut their prices to fill their ships.

[Shirley and Les]

...[/size]Haven't all of you noticed all the NEW Celebrity people around here? ...

 

Since Cruise Critic posters represent a small fraction of the cruise ship market' date=' what happens around "here" isn't very important in the big picture.

 

When Celebrity is both replacing 1400 passenger ships with 2800 passenger ships and adding new ships to their fleet, they better be looking for [b']NEW[/b] people to fill those extra cabins.

 

Having things stay the same isn't compatible with Celebrity's survival in the marketplace. They better be pulling new customers from other cruise lines and the all-inclusive beach resorts.

 

To me, the CEO's comments are more of a commercial than a business plan. They have to fill these ships with paying customers. I don't think there are many alternatives other than a competitive pricing policy to get people on board.