Cruise Market Watch

New cruise venture taps Indian market opportunity

Ryan Wahlstrom — Mon, 21 Sep 2009 23:27:37 +0000

The growing Indian tourism sector has proven an opportunity for new venture Louis Cruises India. The subsidiary of Louis Cruises was officially launched in India on the 19th of September 2009. MV Aquamarine, a 1,200 passenger capacity cruise vessel will cruise from its homeport in Kochi (colonial name Cochin). The vibrant city situated on the south-west coast of the Indian peninsula is located in the scenic and prosperous state of Kerala, hailed as “God’s Own Country.”

Kochi currently receives 6 million domestic and .5 million internationational tourists annually with a 15% growth rate. Its proximity to the equator, the sea and the mountains provide a moderate equatorial climate. Its historic blend of Arab, British, Chinese, Dutch and Portuguese influences provide a rich cultural setting.

According to Mr. Oneil Khosa, CEO & MD of Louis Cruises India “exotic voyages to Maldives and Colombo are generating a large interest.” The product offering will be a fusion between Western and Indian themes – in entertainment, food and service. As a part of the launch, Kerala Tourism has signed an exclusive deal with Louis Cruises India wherein both parties will engage in joint marketing efforts for promoting Louis Cruises India. These include an inaugural sailing in Mumbai (Bombay) with media guests and Bollywood tie-ins.

Aquamarine will be conducting Kochi-Maldives-Kochi and Kochi-Colombo-Kochi cruises with overnight stays at both the destinations. The cruises have been specially designed to allow guests the flexibility for either 3-night or a 7-night cruises.

Mr. Khosa previously served DVB Bank as a cruise industry focused financier. DVB Bank has been active in the cruise industry M & A activities apart from conventional asset lending. Before joining DVB, Mr. Khosa was employed as a First Officer with Royal Caribbean Cruises Lines.

Cruise ticket prices increase 14% from early 2009 lows

Ryan Wahlstrom — Thu, 17 Sep 2009 05:58:04 +0000

Travel agents report an average increase of 14% in cruise ticket prices during June, July and August of 2009 compared to April 2009, according to the quarterly Cruise Pulse survey. Pricing, while still below the same period the year prior, indicates stabilization in the cruise market.

There is also evidence of stronger pricing for cruises booked for 2010 departures, driven by interest in the new ship builds, more favorable demand in the European market and re-surging interest with luxury cruise lines.

Data was gathered August 25 to September 8, 2009 from 349 travel agents from around the world. Margin of error +/- 5.2%.

Read the full report here.

Cruise Market Watch turns 1

Ryan Wahlstrom — Thu, 30 Jul 2009 13:56:10 +0000

I launched www.CruiseMarketWatch.com last August as a way to highlight my research and marketing skills in a practical and demonstrable way. Since then, the site has had 54,000 page views from 14,500 unique visitors and ranks first for the search term “Cruise Market.” I have been published in the Travel Trade Gazette and Cruise Shipping Miami Today, attended the Cruise Shipping Miami convention, surveyed over 600 travel agents and created an iPhone app for cruisers. Not bad for a part-time pleasure. But perhaps most importantly, it has helped me stay emotionally connected to the love of my life, to whom the site is dedicated, as she travels the world.

I started out knowing I wouldn’t out scoop the cruise sites that post news releases onto the web. If it already exists, it’s not unique – so why should you visit? I try to find cruise trends that have an impact from a marketing perspective and actually write something insightful. Moreover, I provide market data for free that simply can’t be found anywhere else.

Since my passion is applying analytical and strategic thinking to the development of remarkable products and promotions, I’d like to share five Google Analytics site statistics from the past year.

Cruise iPhone app now available to cruisers

Ryan Wahlstrom — Sun, 26 Jul 2009 13:54:04 +0000

The countdown, converse and cruise app is now available for download in iTunes.

Named “Always Be Cruising” it is part fun, part function for fans of cruising.

Adam M. Goldstein, President & CEO Royal Caribbean International calls the app “the marriage of the cruise countdown clocks.”

The app includes not just a countdown to cruise timer with over 200 ship images, but also a “who is cruising” social feature. You can make friends before you even start the cruise by creating your “cruiser” profile and exchanging messages and helpful tips for the best cruise experience. The countdown clock also makes a ship horn sound when launched, followed by the soothing sound of seagulls and ocean waves.

Thomas Troward (1847-1916) said “The law of flotation was not discovered by the contemplation of the sinking of things.”

And likewise idea of creating the first app for cruisers was contemplated in an early Cruise Market Watch post. It grew into a full-blown goal after talking over the concept with Yachts of Seabourn Vice President of Marketing, Adam Snitzer. Thanks to a lot of help and partnership with mPlugged, cruisers around the world can now enjoy its functionality.

MSC Racing to Grow Market Share

Ryan Wahlstrom — Tue, 21 Jul 2009 04:42:17 +0000

MSC Cruises has been a regular trackside advertiser at Formula 1^TM races around the world for the past several years. They even have a Formula 1 Simulator aboard the MSC Fantasia.

But they aren’t just settling for sponsorships at the racetrack. They are aggressively getting into the race to acquire market share in the growing cruise industry.

MSC Cruises just launched its tenth ship – the MSC Splendida in Barcelona. The Splendida is the sister ship of the MSC Fantasia, launched last December 2008. She was the largest ship ever build by a European owner, carrying 3,959 guests. The MSC Poesia was introduced the March prior and the MSC Magnifica comes into service March 2010. Moreover, MSC unveils two more new ships MSC Meraviglia and MSC Favolosa in 2011 and 2012.

Head swirling? Here is a chart to help you get you oriented.

	Date	Passengers
MSC Poesia	Mar ‘08	3,013
MSC Fantasia	Dec ’08	3,959
MSC Splendida	July ’09	3,959
MSC Magnifica	Mar ’10	3,013
MSC Meraviglia	2011	1,245
MSC Favolosa	2012	1,275

That is 130% growth in passenger capacity in just five years. What is the impact on market share? From a worldwide market share in 2009 of 4.3% to 5.1% in 2012. Doesn’t sound like much? That eight tenth of an extra percentage point alone means $230 million in gross revenue from a $29 billion 2012 worldwide cruise market.

Another eye opener, the MSC Fantasia was scheduled to host U.S. President Barack Obama, British Prime Minister Gordon Brown and other leaders from Russia, Germany, Japan, Italy and Canada at the G8 “Group of Eight” Summit in Italy early July. While those plans were scrapped when Silvio Berlusconi switched the venue from La Maddalena to L’Aquila, MSC Cruises nevertheless remains on a fast track.

Carnival FunHub is Like A Dream

Ryan Wahlstrom — Sun, 19 Jul 2009 11:04:00 +0000

When my wife and I moved to Miami we fondly told each other “it’s like a dream.” The dream kept growing, as she is now working on the Carnival Dream’s set-up in Montefalcone, Italy. Scheduled for its first sailing Sept. 21, it will be Carnival’s largest ship. As if these two things weren’t enough to get excited about, CruiseMarketWatch.com is eager to experience the new on-board technological features, dubbed the “FunHub.”

The FunHub creates the cruise industry’s first on-board social network, along with access to ship’s services, facilities and daily activities information.

Guests can:

create a personal profile to meet and interact with others on-board
create groups based on interests
find details about the Dream’s numerous on-board activities
browse food and beverage offerings
learn about ports of call and excursions
access weather updates
read biographies of key shipboard personnel and see ship maps
receive cruise director announcements
participate interactive polls

I think this is a really smart, forward looking move (in fact, one I preached about in an Sept. ‘08 blog post and subsequently developed similar features into our own iPhone application for cruisers that is waiting iTunes review). I applaud the year-long collaboration involving Carnival’s hotel operations, marketing, IT and guest experience departments.

In addition to FunHub portals, access to the FunHub is available on any guest computer or Wi-Fi enabled device free of charge. Internet access to sites outside the FunHub is available with purchase of a special Internet package.

Follow Carnival’s Dream Team of 12 I/S managers here http://www.dream-startup.net/.

Why Choose to Cruise?

Ryan Wahlstrom — Sat, 18 Jul 2009 18:53:14 +0000

Many reasons, but none more important than what real customers have to say. Here are some video comments from real cruisers interviewed by CruiseMarketWatch.com July 18th at the Port of Miami.

Decision criteria in ship selection from onboard interviews are summarized on our research page.

Passion Cruise Brand equals Pricing Power

Ryan Wahlstrom — Sat, 04 Jul 2009 15:07:06 +0000

Below are price ranges for three different contemporary cruise lines for August 2009 sailings, balcony cabin, all 7-day eastern Caribbean cruises:

Brand 1 = $739 – $1,309
Brand 2 = $999 – $1,149
Brand 3 = $1,463 – $2,309

Why is one line able to fill cabins at rates 50% to 100% higher than the others? Why are consumers willing to pay a steep premium even in tough economic times?

It is due to passion – consumer’s passion for the brand. Review the passion pyramid below. At its pinnacle is aspirational attainment – a brands ability to fulfill a market’s goals and dreams. Consumers who get here feel a kinship with the brand, they are where they belong and are willing to pay to get there. At the bottom is the mass market, where there is no pricing power because the vacation experience is a commodity competing on price.

Consider an example from the auto industry, where consumers pay more to purchase and maintain large SUV’s with four-wheel drives that are rarely if ever engaged. What is engaged is the fulfillment of the dream or idea that one could escape – a member of the group that can climb mountains and steer around avalanches – even if it is only on the way to the suburban grocery store.

A family vacation at its core is functional, but the choice of what vacation you take is “what does it say about me.” Consumers today consciously choose to associate with your brand. It is the label you use to display your kinship, like kachina dolls displayed in Native American Hopi family dwellings to designate membership in various clans. It is not just your vacation, it is telling others who you are.

And who is willing to pay a 100% premium for a contemporary cruise? Consumers who aspire to become members of the Disney clan. Disney’s power is derived from the fact they are not communicating in monologue, but engaging across multiple channels; cable networks, teenage pop stars, theme parks and 80-year-old characters that are cultural icons. Professor Ludwig Von Drake introduces me to cruising via podcast on my iPhone.

Most recently Disney Cruise Line is partnering with Kodak and Disney Channel to deliver themed cruises where cruisers will mingle with stars from Disney Channel shows like Hannah Montana, Sonny With A Chance, The Suite Life on Deck, JONAS, Camp Rock and High School Musical. All complete with autograph session and live performances.

“A dream come true for hundreds of kids this summer by offering kids the possibility to hang out with their favorite Disney Channel stars.”

Now that is something to aspire to.

Cruise West young man

Ryan Wahlstrom — Wed, 24 Jun 2009 00:41:19 +0000

What do you call a 335-Day circumnavigation of the world visiting 242 Ports of Call, 14 Oceans & Seas, 52 Countries and 85 UNESCO World Heritage sites besides the journey of a lifetime? Marketing geeks like me call it a creative and unique response to emerging trends.

Voyages of the Great Explorers from Cruise West is meeting these trends head on. Future Brand recently invited Rossitza Ohridska-Olson to be part of an expert panel discussing future trends in travel. Two of Rossitza’s five trends were experiential and creative tourism.

Experiential describes our growing hunger for authenticity, discovery and sense of adventure – one that will push further the geographical boundaries of tourism by seeking out more destinations. We blogged here last December that authenticity was a scarcity in 2009, and as such a sought after luxury. Cruise lines like Cruise West have defined what is scarce and unique by introducing the opposite of anything that has already become too affordable, accessible or well-known.

“No other cruise line – big or small — offers a journey as long or as varied as Voyages of the Great Explorers,” said Richard West, managing director and chairman of Cruise West.

Another trend, creative tourism, means engaging in and learning about the cultures and communities being visited. A hallmark of the Cruise West experience is thought-provoking presentations by local experts and onboard Exploration Leaders who expand upon the significance of the cultural and historical highlights.

Departing Singapore on March 6, 2010, Cruise West’s flagship, the 120-guest, all-suite Spirit of Oceanus will sail westward, following the sun, to return to Singapore on February 3, 2011. Book the entire voyage starting at $233,995.

Here is a link to the eBrochure for the Voyages of the Great Explorers World Cruise.

Corporate meetings and incentive travel on Cruise Ships

Ryan Wahlstrom — Mon, 22 Jun 2009 01:52:26 +0000

Oprah Winfrey is with her employees this week on a cruise. At the same time, she has become part of a marketing trend.

According to Jo Kling, Founder and President of Landry & Kling, Inc, a premier cruise event services company “We anticipate the number of corporate and incentive cruise programs and meetings at sea to triple.”

And here at Cruise Market Watch, the trend is our friend.

How can one take advantage of a trend? It begins by identifying the market, then developing strategies to win it over.

How big is the market for corporate meetings and incentive travel? Annual estimates range from $175 billion to $40.3 billion. I prefer the Incentive Research Foundation’s $77.8 billion. If cruise acquires 2% (roughly its same share of the overall world-wide travel market) it would represent $1.6 billion in revenue or about 6% of all cruise revenues.

How to Win them

As one can see from our chart below – providing superior meeting experiences aboard a cruise ship at a competitive price will lead over time to market share gain from the competition.

The cruise lines are doing their part by building conference facilities on ships to rival those in hotels. For example, Royal Caribbean’s Freedom of the Seas boasts dedicated conference meeting space with breakout rooms and reception area accommodating up to 400 people. It also includes high-tech presentation rooms with color touch screens, wireless remote controls and teleconferencing equipment.

With the basic physical needs of corporate meetings taken care of, it is up to branding to communicate the message to corporate planners. The experience of a corporate meeting on a cruise is more exciting, motivating and rewarding. In addition, a cruise ship adds to employee camaraderie and bonding (ask Oprah).

Jo Kling and her team are going a step further. By understanding the habits of the target market they are re-engineering the group quote process online with a new venture called Seasite. Since nearly 80% of corporate meeting planners use the Internet for research, Seasite will for the first time consolidate cruise information online from strictly a meeting planners perspective. It also facilitates a single RFP and quicker quotes. The goal is to make the cruise booking experience equal to or better than the hotel experience. Speaking the customer’s language is always good thing.

“At Seasite, we understand that cruising for many planners is virtually uncharted territory. Seasite demystifies the entire process by providing easy access, depth of knowledge and the tools and resources needed to successfully plan and execute corporate meetings” says Kling.

I like the strategy. The Seasite slogan “One-Third Land, Two-Thirds Meeting Space” successfully evokes the question in a corporate planners mind – why not at sea? And Seasite accomplishes this without going directly to price (maintaining the brand and margins) or using a picture of a cruise ship (we know what a ship looks like – create the desire by selling us on the emotion).

And price? According to Kling, the cruise lines can offer meetings for up to 40% less than traditional hotels. A study by TNS about non-cruise corporate meetings taken outside of North American by U.S. companies states costs typically run from $750 to $570 per person, per day and average 4 days in duration. This breaks out roughly as

30% airfare
20% lodging
20% activities/entertainment
15% food
15% ground travel

The competitive cruise pricing structure, favorable meeting facilities and overall cruise experience leaves plenty of opportunity to deliver on the promise – rich and rewarding meetings that motivate and inspire employees. This will help cruise lines continue growing market share.

For more on our “growing cruise markets” series see: