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Jumat, 17 Juli 2009

Seabourn and Silversea Cruise Lines - Are They Really Competitors?

At first blush this may seem like worse than a naive question, but one that is just silly. I mean, how could the two largest true luxury cruise lines not be direct competitors?

Yesterday I learned some very interesting statistics. Silversea claims that it actually has more former Princess passengers on it ships than Seabourn guests. More Holland America passengers. More Cunard (actually the highest percentage). More Crystal. In fact, when providing the statistics Seabourn wasn't even mentioned; and clearly isn't in its top four sources of prior cruisers.

When first faced with this surprise I was, frankly, shocked. Of course Seabourn had to been in the mix, didn't it? But then I started thinking...as I do.

Silversea provides a very upscale product; no question about it. It has gone through, and probably will continue to go through changes, while it struggles with its present situation. However, Silversea has stressed that it is not cutting back, but rather adding value through essentially keeping the product the same and lowering prices. (I do not acknowledge that to be true - I don't have personal knowledge - but that is the company line.)

Seabourn also provides a very upscale product, but what I experience and what I hear consistently - even with the launch of the Seabourn Odyssey - is that it is the staff that makes Seabourn Seabourn. (How many expressed concerns abouth whether Seabourn could deliver the same quality service on its larger ship? I have not heard a single person say Seabourn hasn't succeeded.)

Aside from opinions about cuisine and service levels (or, better, style differences) the ships are markedly different. The Seabourn triplets with only 208 guests are yachtie and the 450 passenger Seabourn Odyssey provides the same yacht-like service. Silversea, however, provides a large platform for all its ships (which are medium to medium-large). Is that why Silversea mentions passenger to space ratios rather than differences in service? Probably.

So with the similarity, and knowing that many cruise these lines to be on the ships first of all and itinerary second, why isn't there more cross-over? My experience tells me that I have a much more prevalent move to Seabourn from Regent and Celebrity (and a bit from Oceania). I have had Seabourners try Holland America or Cunard...once. But not so much the other way round. I do have some serious Crystal clients that happily swing between it and Seabourn.

One interesting observation: Seabourn's ships are sailing pretty full this summer. In fact, Seabourn is running into situations where it is oversold. Silversea, on the other hand, ha thrown everything it has (butlers, $1,000 onboard credits, deep discounts, etc.) to attract more guests...and its ships still have significant space available.

With such great deals (and they are) why aren't more Seabourn guests giving Silversea a try? I believe that at this level the guests know what they want and it is not necessarily about getting the best deal...when measured solely by the dollar/pound/euro.

Backtracking to the move-up clients, it would appear that it is a bit more in what the style of service is provided (or, in some instances, marketed) in the mass market/premium market that a particular person latches onto and becomes comfortable with. Every line tries to pitch some sort of service difference and, it would seem, that comfort with the "hint" given on Princess may build a natural acceptance to Silversea's marketing, while the "hint" on Celebrity favors Seabourn.

Regent is a whole 'nuther kettle of fish which I will address another day. Suffice it to say, as I recently discussed with a client, Regent seems to be more of a premium line with great suites; rather than a luxury line with great service and cuisine. It is when those that have been trained that what is truly faux luxury discover what luxury cruising is truly about, the change to Seabourn or Silversea happens. My experience is that there is no real trend toward one or the other. In that respect, I guess, Seabourn and Silversea do directly compete.

I guess, then, it is not so ironic as a top seller of Seabourn cruises I also tend to sell more Celebrity and Oceania than I do Silversea, Princess or Cunard. Mind you I sell them all, and am very familiar with each, but I cannot ignore the trend.

Funny thing, "This is My Yacht" and "Starring You" do have some symmetry.

Kamis, 04 Desember 2008

Cruise Lines' Fuel Supplements Suspended by Carnival Corp.

With oil prices having plummeted to $46 a barrel, Carnival Corp. has suspended (not eliminated) its fuel supplement for all of its major brands: Seabourn, Cunard, Holland America, Princess, Costa and Carnival.

This is how it will work:  A refund of the fuel supplement will be made in the form of a shipboard credit for all bookings within the final payment period for departures on or after December 17, 2008. All bookings outside of the final payment period for departures on or after December 17, 2008 will be adjusted to remove the fuel supplement and guests will be provided with a revised final payment amount.

I am confident the other cruise lines will follow suit shortly. 

Now, if only for the airlines!

Sabtu, 01 November 2008

Carnival Corp.'s Response to Anticipated Cash Flow Reductions: Shareholders, Not Passengers, To Feel the Pinch

Carnival Corp. (owner of Carnival, Princess, Costa, Holland America, Cunard and Seabourn) announced yesterday that it was suspending the distribution of dividends for 2009; not because of a lack of profitability - Carnival's products are, and are projected to remain, profitable - but because of a change in cash flow and cruising habits on most of its brands.

Even though Carnival reports it is sitting with over $1.3 Billion dollars in cash, it is anticipating that (as occurred immediately post 9/11) (1) people are not as easily committing to cruises 6-9 months or longer in advance, so the immediate cash flow from the deposit payments is reduced; and, (2) people are not willing to travel as far to get to their cruise vacation (and the increases in air fares and reduction in airline service doesn't help). 

What this also means is that people are going to be booking more of the less profitable Caribbean cruises than the higher profit European cruises on most of the Carnival brands.  Ships are being repositioned as we speak; with, for example, Baltimore announcing it will be a home port for Carnival, Royal Caribbean and Celebrity on an extended (almost year round) basis.  [Note:  Seabourn is not taking these steps.  It has, in fact, announced its expansion into Asia and its commitment to finding additional unique European ports.  More to come on this.]

One other thing to consider, there will not be many new ships added to order books.  So what is seen as a lack of shipyard capacity today, may result in an overcapacity situation in a few years.  To me this is a classic example of how the economy is grown from the bottom up.  If the consumers aren't spending money...or even just aren't spending it as fast...the businesses contract, the investors get less in the short term and industry retracts. 

With Exxon Mobil announcing $13.8 Billion dollars in profits in the 3rd Quarter, one wonders what the effect of shorter cruising itineraries (driving first by the outrageous oil prices and now by reduced/changed itinerary demands) will have on the 4th Quarter 2008/1st Quarter 2009 profits.  We have all seen the drastic effect a 5% drop in U.S. driving has done on the price of a gallon of gasoline, so the cruise lines' changes will most definitely have some affect.  I think those investors - who have been extremely happy over the past few years - may see a bit less in the way of dividends and stock value increases.

While I am not thrilled with the concept of Carnival suspending dividends to its shareholders for 2009, in the long term (as Mickey Arinson asserts) this bit of fiscal conservatism (rather than gimmicks) is designed to assure Carnival will remain fiscally strong in the long term.  (Now reflect on some of the short term gimmicks I wrote about earlier in the week and you can better understand why I see some of them as Red Flags.)

Jumat, 10 Oktober 2008

Carnival Brands Drop Fuel Surcharge For New 2010 Bookings- UPDATED

In a move that I felt was long in coming...as I felt was the drop in oil prices...Carnival Corp. has announced today that effective October 31, 2008 it will eliminate the fuel supplement charge on all new 2010 bookings on any of its lines (Seabourn, Cunard, Holland America, Princess, Carnival and Costa) and will, instead, institute a modest price increase. 

If you have booked a cruise with a fuel supplement you may be entitled to an onboard credit dependent on the future price of fuel.  Essentially, for any 2008, 2009 or 2010 cruise where a fuel supplement has been charged, if the price of light sweet crude oil on NYMEX (a primary oil trading exchange) remains below US$70 per barrel for 25 consecutive days ending 5 days before your cruise departs you will receive an onboard credit equal to the fuel supplement already charged.  But if the price fluctuates above US$70 a barrel for even one day during the period, the fuel supplement remains.  Put another way, starting 30 days before your cruise if the price stays below US$70 until at least 5 days before you cruise, you get your money back.

Considering that (a) most people just want to know the price of their cruise and do not care about the breakdown of the cost, and that tacking on a charge that has normally been included in the cruise price seems a bit offensive (even thought it was necessary), and (b) the cruise lines do not want to be seen as profiting from the unanticipated fall of artificially inflated oil prices, this reversion to the "old ways" makes a lot of sense.  Hopefully the other cruise lines will follow.

Jumat, 12 September 2008

Travel Consortiums: Ensemble Travel, Virtuoso, etc.

Ensemble Travel Group calls itself, "An International Collection of Expert Travel Agencies with Exclusive Offers That Make Your Travel Dreams Come True".  Virtuoso takes that a step further and has established an impressive international network of high end/luxury providers and, admittedly, is the tops when it comes to marketing itself and providing the ultimate in luxury offerings.  There are other travel consortiums as well, such as Signature (also focused on the upper end of the market) and Vacations.com (focused more on the mass market).

These travel consortiums of travel agents use their joint marketing and purchasing power to work with travel suppliers around the world in an effort to bring added value, better pricing and more information to their clients.  You should also be aware that in order to be a member of one of the upper level consortiums (Ensemble, Virtuoso, Signature), membership requires (aside from the payment of fees) that the agency not only be legitimate, but that it have a history of producing a very significant amount of revenue.  That requires, obviously, each travel agency to have established itself for a number of years and that it has a substantial client base. 

I digress for a moment to let you know/disclose I am a member of Ensemble. Years ago I was a member of Vacations.com, but as I will explain, it wasn't a good fit for me or my clients.

What do these consortiums do for a travel agent and, ultimately, for you?  They provide travel agents with a network of travel providers (whether they be cruise lines, hotels, tour operators, etc.) that cooperatively allow the agent to offer its clients - on occasion - special pricing, or added value (onboard credits, complimentary tours, a room upgrade, included breakfasts or dinner, or similar).  They also provide marketing programs, so that the travel agent can cost-effectively send out not only postcards and flyers, but glossy catalogs and magazines to its clients...and those dreaded emails (which I try to avoid sending unless it is something really good!).  And they provide the travel agent with information.

One thing that I find interesting is how the cache belonging to a consortium is directly proportional to the cost of the vacation. As a former Vacations.com agency, I do not recall any clients caring (and most not knowing) that I was a member.  For my luxury clients there really was little benefit, while those sailing on Carnival or Princess did benefit from some onboard credits (and, to be sure, they do add percentage-wise a much greater value on a lower priced cruise).  So it was a really poor fit for me and a very short term relationship.

On the other hand, there are those that believe using a Virtuoso travel agency is akin to wearing a Rolex; it is a status symbol.  Virtuoso provides its agents and their clients with some really good stuff, but at least for me as I write this, I do not find the value to be there.  That is, in large part, because of my involvement in the superyacht industry.  Many of the contacts and access Virtuoso affords its member agencies I already have.  Much of the information it provides is already in my knowledge bank because I have actively traveled all over the world for decades.  I have never been one to be impressed with hype (heck, being in the superyacht business, if I was swayed by "flash" I would have self-destructed years ago!), so I have looked at what works best and is the best value for me and my clients. 

I readily acknowledge that Ensemble Travel does not have the cache of Virtuoso.  But there are so many similarities between the two that other than Virtuoso having higher quality marketing materials and the aforementioend access, I find little useful difference.  As an Ensemble Travel agency, I am able to provide similar (or even identical) hosted tours and cocktail parties, some great European hotel upgrades and/or benefits (complimentary breakfasts, wine, etc.) and more.  One benefit that I believe Ensemble has over Virtuoso is that because its focus is not so much on the luxury end, I can provide some better pricing and amenities on the premium lines (such as Celebrity and Holland America); which is a significant portion of my business.

You may have noticed that I have not really discussed what the information is that the consortiums provide its member agencies.  There is a reason:  For the client it is many times simply irrelevant.  I do not care what information is available if it is not accessed, understood, efficiently utilized and then conveyed properly by the particular travel agent to the client.  I have had too many experiences of clients coming to me from another agency (one that is a member of a consortium) and their complaining about the misinformation, the lack of service or serious mistakes that were made...by a specific travel agent. 

Alas, it is not about reading something off a computer screen or "hearing" the Great Barrier Reef, Dubai or Amsterdam are wonderful.  You want to know that you can have a float plane fly you too the reef for your day of diving rather than enduring a two hour boat ride each way...and explain what it is like.  You want to know why Dubai's newest hotel, Raffles Dubai, is incredible and you just might enjoy knowing more about the incredible museums of Amsterdam (and how to miss the lines entirely) rather than the Red Light District.

Also, remember that marketing material (no matter how impressive) is intended to get you to go on vacation; not be your vacation.  So when you are looking to book your next cruise you should think about whether the travel agent's membership in a consortium and offering a complimentary tour or onboard credit is really what is important to you...or is it the knowledge that your cruise will be booked at a good price, with you being provided solid information, and receiving exceptional service that really matters. 

If you are fortunate, and I try to make all my clients fortunate,  you will get it all!

Senin, 11 Agustus 2008

Seabourn Staff Receive Unique Training and Compensation

Last week I discussed a bit about Seabourn taking back control of its officers and ship's management by abandoning a short-lived V.Ships relationship.  Today I thought I would mention a unique aspect of Seabourn as it relates to its hotel staff; that is stewardesses, waiters, etc.

One thing that is unique about Seabourn is that it has maintained a European/South African staff while virtually (if not literally) most other lines, including other luxury lines, have focused on reducing costs by utilizing less expensive Filipino and other Southeast Asian staff.  In an industry where finding and keeping well trained staff is becoming an bigger and bigger problem, the challenges are many.

As a bit of background, most cruise lines hire staff, put them through a short shore-based program and then put them to sea; starting them out as assistant stewards and assistant waiters generally in the lesser cabins and easier areas of the dining rooms/buffets and allowing "on the job" training to run its course.  As the demand for crew has increased...as have the number and sheer size of new ships increase...some lines have taken to using private "schools".  The problem is, of course, that while it is better than just starting to work without any training at all, there is a big difference between the school room and the ship.

Seabourn is unique in that it does not hire untrained, or merely school trained, staff for its hotel service positions.  Generally, Seabourn has the following criteria:  1.  The potential staff must be a minimum of 20 years old years (eliminating many "youth issues"); 2.  They must have a certificate from a recognized professional training institution; 3.  (And I think this is key) they must have at least 2 years of full-time restaurant or hotel service experience in a five star establishment catering to an international clientèle; and, 4.  They must have a good written and oral use of English.

(Having suffered through Regent's overnight change from European to Filipino staffing, the frustrations of the lack of training and the lack of a good command of English was, to me shocking.  As time goes by this problem has dissipated quite a bit, but it still remains with too many new staff.  I have heard of similar problem on Silversea.)

But Seabourn does not end its training there.  With the Seabourn Odyssey coming onboard, Seabourn is in need of more staff...and the staff has to be experiences not only in a classroom and a hotel or restaurant. So Seabourn is taking the unusual step of taking a certain number of suites out of service so that the new staff can come onboard and shadow the existing staff.  Remember the term is "shadow"; not replace.  The full compliment of trained staff will remain on the ship to service the guests.  The new staff are in addition to the full compliment. So when some of the more experienced staff migrate over to the Odyssey, trained staff to replace them will already be onboard.  (Will this be perfect?  Probably not.  Will it be significantly better than pilfering the existing crew and leaving new and not so well trained staff on the triplets?  Every indication is that it should work quite well.)

[Side Note:  When it comes to hiring galley staff, Seabourn actually travels to the schools and puts the applicants for jobs as chefs, bakers, butchers, etc. through tests before they are hired; again taking that extra step which reduces the pitfalls of mere "on the job" training.  Many cruise lines take the graduate sight unseen, evaluate them once onboard and then figure out where they might fit.]

The other major issue is compensation.  Until last week's 5% drop in the value of the Euro, the U.S. Dollar has been the standard rate of pay for most crew...and one of the biggest bones of contention as crew has seen their net pay in their home countries actually reduce.  It is very difficult to maintain staff when compensation reduces.  It is, in part, why the concept of automatic gratuities being added to your onboard account started...and then the newest things:  mandatory service charges being added; the concept obviously being the higher percentage of passengers that pay the full gratuity (and the fewer that pay none...and those folks do exist), the easier it is for the cruise lines to boost or at least stabilize crew wages...but at the passenger's expense.

Seabourn, once again, takes a unique position in the industry.  It pays its staff in the currency of their residence.  So a South African has a contract paid in Rand, British in Pounds, Dutch in Euros, etc.  This is a huge benefit for the staff because their pay is, regardless of currency international fluctuations, their pay...just like it would be at home.  This sort of...consistancy...is a very good tool to obtain and retain high quality staff.

One thing to consider is that while as a guest Seabourn is a fantastic place to be, the employees don't get to have the same experience.  They are in charge of assuring you the experience.  This, in large part, can affect the international mix of the staff.  Some have wondered why there are so few American staff.  The reasons range from the rate of pay, to living conditions, to the requirement to work seven days a week at times.  With all of the employment opportunities in the U.S., obtaining and retaining U.S. staff can be very difficult.  Just ask Norwegian Cruise Lines when they were pulling their hair out in Hawaii.

Also, keep in mind that societal and cultural differences also come into play as to the type of service being provided.  While European/South African staff are more outgoing and engaging, Filipino staff can be very charming, but generally take a more distanced or subservient approach.  To be sure, each individual is different, but you can most definitely tell the difference when you walk aboard a Holland America ship versus a Seabourn ship.  It is, alas, part of what the product is that is being provided to the guests.

Hopefully this has helped answer some of the questions concerning training, pay and interactions with the staff aboard the ships.

Jumat, 25 Juli 2008

Prinsendam Fans - An Unbelievable Deal - And You Can Only Get It Here!

For those who want to cruise on the former Seabourn Sun, Holland America has made two incredible 2008 European sailings available to me (and to very few travel agents anywhere!) on the Prinsendam which are - ready for this - AIR INCLUSIVE at cruise only rates!

Here are the details:
14 day Black Sea Cruise Rome to Piraeus
September 18, 2008 or
October 16, 2008

Civitavecchia (Rome)
At Sea
Dubrovnik, Croatia
Sarande, Albania
Argostoli, Cephalonia, Greece
At Sea
Istanbul, Turkey
Istanbul, Turkey
Trabzon, Turkey
Sochi, Russia
Sevastopol, Ukraine
Nessebur, Bulgaria
At Sea
Kusadasi (Ephesus) Turkey
Piraeus, Greece

Pricing is as follows:

Inside from: $2,299
Oceanview from: $2,499
Veranda from: $4,999
Veranda Suite from: $6.749
Deluxe Veranda Suite from: $10,499

Prices include the fuel supplement, but do not include taxes of up to $236 per person. Also, there is some limitation as to air gateway cities, with some having a $100 or $200 supplement. Obviously, restrictions apply and the offer is subject to capacity controls and/or prior sale and may be withdrawn at any time. (If you check the posted fares on the Holland America site you will see this is not a "smoke and mirrors" offer, but the real thing. )

If you are thinking about a cruise this fall, a 14 day European cruise air inclusive in an oceanview for $5,000...on the Prinsendam no less...is something you just shouldn't pass up. Call or email me quickly as this is sure not to last.

Senin, 14 Juli 2008

Holland America Eurodam Dedication Video

And now for some good news!

Below is a link to a short video of the July 1, 2008 Dedication Ceremony for the christening of Holland America's newest ship, the Eurodam.