All brands on deck

All brands on deck

By Tom Stieghorst
Carnival Cruise Lines partners with Guy Fieri to add Guys Burger JointsIn 2011, Carnival Cruise Lines concocted Fun Ship 2.0, a package of branded experiences meant to rejuvenate its older ships and provide a consistent fleetwide product.

The anchor was a 40-something celebrity chef with spiky blond hair and a brash, everyman demeanor.

Two years later, Carnival has served more than 1 million hamburgers at Guy’s Burger Joint, and Food Network star Guy Fieri has been exposed to millions of Carnival guests.

“It just goes to show you how successful you can be aligning yourself with a celebrity that fits your brand,” said Carnival Cruise Lines CEO Gerry Cahill.

Fieri is just one of dozens of brand names now sailing the seven seas, as cruise lines increasingly forge partnerships with recognized commodities that reinforce their market message.

A familiar brand is a bridge that first-time cruisers can safely cross to try cruising if they’re uncertain about what it is. Agents can use what they know about clients to find the brand that excites them, then leverage the emotion the client associates with that brand to drive home a sale.

Scott Koepf, vice president for marketing at Avoya Travel, said, “The key is to know your customer and then present the brand that actually resonates with what that customer’s interests are.”

The roll call of brands at sea includes kids’ favorites like Nickelodeon, DreamWorks and Hasbro, entertainment ranging from Dancing With the Stars to Blue Man Group and celebrity chefs from Todd English to Geoffrey Zakarian and a host of others.

Mass-market lines with the biggest budgets tend to have the broadest stable of well-known names, though upscale lines also partner with upscale brands. Oceania Cruises, for example, has partnerships with Lalique crystal, Wine Spectator magazine and the designer Ralph Lauren.

At every price point, cruise lines affiliate with names that mean something special to a target passenger base and help define a unique selling proposition in the market.

All brands on deckFor Carnival these days, that boils down to two buzzwords: unpretentious and fun.

Fieri fit the bill on both counts. While some celebrity chefs strive to impress with refined meals and elegant presentation, Fieri’s signature show is called “Diners, Drive-Ins and Dives.”

His personality is down-to-earth but outgoing and a bit outrageous. There’s nothing on the menu at Guy’s Burger Joint that is hard to pronounce, said Lania Rittenhouse, vice president of product development at Carnival.

“We did some research, and Guy Fieri scored very, very high in terms of who our guests like to watch and who they related to,” Rittenhouse said. “He was just a rock star, and everyone loved him. There was this chatter he created.”

Carnival is in the process of installing a Guy’s Burger Joint on 16 of its 24 ships. It was important that the burgers be free of charge, Rittenhouse said. “We want to deliver the best burger at sea, and not only that, but have it the best value, so we have it complimentary.”

In entertainment, Carnival has partnered with comedian George Lopez to manage and supply talent to a branded comedy club. Lopez is known for his plainspoken take on Hispanic family life.

A deal with Hasbro brings branded toys and games into the mix. Carnival plans a Twister game on the Carnival Sunshine, which will debut in May.

Vicki Freed at the Starbucks on the Allure of the Seas“Our guests love game shows,” Rittenhouse said. “They’re the kind of people who like to be in the audience or on the stage. They participate, they’re very vocal, and they love challenges.

“When we took a look at who was out there to see who was all-American and who had a lot of brands people grew up with … Hasbro has that cachet,” she said.

No secondary brands

At Royal Caribbean International, the brand watchwords might be top-shelf and innovative.

“We don’t want to be affiliated with secondary brands,” said Vicki Freed, Royal Caribbean’s senior vice president for sales, trade support and service. “We want to be the best brand in the category.”

Examples include fashion names Coach and Guess, ice cream purveyor Ben & Jerry’s, children’s characters created by DreamWorks Studios and vintage diner concept Johnny Rockets.

In the coffee category, Royal made a deal with Starbucks to serve its name brand on the Oasis and Allure of the Seas, and a second Starbucks brand, Seattle’s Best, on other vessels.

“The coffee is more expensive than having our own little Royal Coffee Emporium,” Freed said. “But that first-time cruiser, when they come aboard and they see brands they’re familiar with, they go ‘oooh.'”

Royal’s newest brand partnership is with Mattel, which makes America’s favorite doll, Barbie. To appeal to young girls and their parents, Royal is incorporating a Barbie movie night and Barbie story time into its Ocean Adventure youth club.

Royal Caribbean offers the Barbie ExperienceA $349 Barbie Premium Experience is also offered on a dozen Royal ships and should be fleetwide by May. It includes lots of Barbie merchandise, a fashion show, a Barbie-themed cabin and other extras. Freed said the price is more to offset costs than to make money.

“We’re not looking to make significant dollars off of this,” she said.

Perhaps no line has been as active in signing brand partnerships as Norwegian Cruise Line, where the desired market profile can be summed up as edgy and contemporary.

Sailing with Blue Man Group

One of the first brand names to define the latest iteration of Norwegian is Blue Man Group, a trio of humanoid actor-musicians who wear bald caps and uniform blue makeup.

“Everyone loves Blue Man Group,” said Norwegian CEO Kevin Sheehan. “But it is a little different when you think about the traditional cruise entertainment with the old-fashioned Broadway shows, where [the cast] is running around dancing and singing like they’ve been doing for 40 years on the ships.

Norwegian Cruise Lines and the Blue Man Group are partnering up“When I say to anyone in New York or anywhere, we have Blue Man Group, they always say ‘Oh my God! You have Blue Man Group on the ships?’ It’s like an $80 or $90 show in Vegas, and they can watch that for free as part of their cruise fare.”

Other familiar names on Norwegian ships include Nickelodeon children’s characters, Second City comedy, Iron Chef Geoffrey Zakarian and the “Howl at the Moon” dueling piano show.

The company’s latest branding frontier is the Norwegian Breakaway, a New York-centric ship debuting in May. It has formed a number of partnerships with New York institutions large and small to help recruit first-time cruisers from the area where it will homeport.

A high profile example is the Radio City Music Hall Rockettes, who will serve as godmothers to the ship. Breakaway will also have Sabrett hot dog stands and a pastry shop based on the reality show “Cake Boss.”

One factor driving the growth of branded partnerships has been the large number of new franchises created by cable TV.

“Cake Boss” first aired on the TLC channel in 2009. It follows baker Buddy Valestro and his family as they operate Carlo’s Bakery in Hoboken, N.J. In its first season, 2.3 million people, on average, watched each episode.

Andrew Coggins, a business professor at New York’s Pace University who follows the cruise industry, observed, “What TV brings is widespread brand awareness; it reaches a wide market.”

Other examples include the Hub, a digital and satellite TV vehicle for Hasbro products created with Discovery Channel. And, of course, Disney Channel, which has synergies with Disney Cruise Line — a line that was itself created from one of the most recognizable consumer brands.

Holland America features Dancing With the Stars performancesAnother hit show that has crossed over to cruising is ABC-TV’s “Dancing With the Stars,” which pairs accomplished dancers with celebrities in a season-long competition.

Performers from the show will headline six Holland America Line theme cruises in 2013 and 2014, and dance lessons and shows developed in collaboration with the program will be featured on all 15 Holland ships.

The price tag for brand partnerships is rarely disclosed, and the Holland-ABC deal is no exception. All Holland Executive Vice President Rick Meadows would say is, “It’s an investment, but it’s worth it.”

Deals not made, partnerships dropped

Some intriguing tandems never make it to the alter because of financial cold feet. The luxury suite section of Norwegian Epic is branded “The Haven,” but it could have carried the St. Regis name. Likewise, the legendary Peter Luger Steak House in Brooklyn was considered as a partner for the Epic’s steak restaurant, but no agreement was reached.

“We kind of edged away from a lot of those,” Sheehan said. “To do the deals, you had to give them economics.”

Cruise lines can recoup some of the upfront expense by charging for branded experiences onboard. On Royal Caribbean, it costs $4.95 to get into Johnny Rockets, although the food itself is free. A Ben & Jerry’s cone runs from $2.50 to $4.75, even though there is free ice cream elsewhere on Royal ships.

The Eurodam has a BB King Blues ClubRoyal Caribbean’s Freed said that most branded products are not big contributors to onboard revenue, and some of the most expensive deals Royal has signed cost the passenger nothing.

“DreamWorks is a completely complimentary experience,” she said. “We took a brand that we pay a lot of money for, we do the complimentary character breakfasts, we don’t charge for those, we do the parades, an ice show with DreamWorks characters. There’s even an Aqua Theater show.”

Some brand partnerships aren’t meant to last. The Cirque du Soleil deal with Celebrity Cruises has fizzled, and Cunard did not put a Todd English restaurant on its most recent ship. The chef’s draw with foodies isn’t what it once was, Cunard Vice President Stan Birge said.

An early effort at Costa Cruises to ride a brand was its 1999 partnership with Zeffirino, a renowned restaurant in Genoa. It didn’t work because of the line’s multinational clientele.

“What may be big in Italy probably in the U.S. is going to be unknown, and vice versa,” said Ruben Perez, Costa’s general manager for North America.

As cruise lines increasingly source passengers from outside their traditional waters, they either have to tailor their brands to regional markets or have partners that have global traction.

Royal Caribbean thinks it has found such a brand in DreamWorks, Royal President Adam Goldstein told an audience at the recent Cruise Shipping Miami convention in Miami Beach.

“I think its very compelling to first timers that such entertainment appears on our ships, not only in the United States but, for example, in China where, if anything, the characters are more popular than they are here,” Goldstein said.

For travel agents, brands can be a chance to demonstrate value both to customers and to cruise lines.

Andrea Botto Joyce, a Cruises Inc. agent in Wallkill in New York’s Hudson River valley, said she uses Royal Caribbean’s new Barbie tie-in to market to families with small children.

“I think people tend to spoil their children on vacation and want them to get a dream experience, so I think this package would interest many people who have little girls between the ages of 4 and 11,” she said.

But Joyce said many clients don’t know about Barbie yet, and might find out only after it is too late.

“It shows how important a travel agent is to someone, because they could go on the Oasis and see the [Barbie fashion] show happening, and they would like to have had their child be part of it.”

Koepf, of Avoya Travel, said agents likewise are invaluable to cruise lines that have invested in brands but need agents to match the right customers with the right brands.

He said agents shouldn’t lead with the brands, because not every one appeals to every client.

“If Norwegian has Nickelodeon, but I don’t have kids, then I’m not interested. I don’t care,” he said.

Once you find a client’s hot button, however, a brand that speaks to that interest can be a final argument that wins the sale for an agent.

“It’s a huge benefit for them to close by saying, ‘Well if you like blues, you like jazz, guess what this ship has? If you like Broadway musicals, guess what this ship has?” Koepf said. “Those are all very strong closers, basically.”

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Preview 2013: Cruise

Preview 2013: Cruise

By Tom Stieghorst
Preview 2013As 2013 arrives, the cruise industry can only pray that there is no repeat of the signature event of 2012.

A year ago, travelers seemed ready to pay higher prices for cruises. Then the Costa Concordia accident happened, casting a pall over cruising that lasted for a good part of the year.

Looking at next year, Micky Arison, chairman of Carnival Corp., which owns Costa Cruises, said in September that prices are generally well positioned to reach parity with 2011 by Q2 2013.

However, for the Costa line in particular, “to climb back to where things were before will take a couple of years beyond 2013,” Arison said.

In some markets, there are signs that next year will be more normal. Starting in January, Norwegian Cruise Line is hiking prices 10% on its Pride of America ship in Hawaii.

Alaska will continue to regain capacity in 2013 that was lost to the ill-conceived passenger head tax several years ago. But trouble looms in 2015 with a tighter standard for low-sulfur fuel, though some breathing room remains for reaching a regulatory compromise.

The biggest unknown hanging over the industry for 2013 is Europe, both as a source of passengers and as a draw for North Americans faced with continued high airfares.

At Royal Caribbean Cruises Ltd., capacity for 2013 is down 20% in the Western Mediterranean and 9% in the Eastern Mediterranean.

“The European market continues to be the most puzzling market we’re facing,” said RCCL Vice Chairman Brian Rice.

Closer to home, cruise lines continue to bring more ships to within driving distance of their customers. Princess Cruises in 2013 will operate a ship year-round from San Francisco, giving the Bay Area drive-market itineraries to Alaska, Hawaii and coastal California.

Disney Cruise Line will offer a full year of cruising from Galveston, Texas, another popular drive market, while Norwegian, Carnival Cruise Lines and Holland America Line will all operate additional cruises from Boston.

NCL BreakawayBut the port with the biggest potential increase in passengers next year is New York, which stands to gain 4,000 passengers a week starting in May with the introduction of the $840 million Norwegian Breakaway.

The Breakaway is staking its claim to New York-area loyalists with a ship that boasts Sabrett hot dog carts and Brooklyn Brewery beer among its food offerings. Five water slides, a two-story spa and Norwegian’s first seafood restaurant are some of the Breakaway’s other attractions.

Another big debut will take place across the pond next year with the delivery of the Royal Princess, the first new ship for Princess in nearly five years. The 3,600-passenger ship will do 12-day Mediterranean cruises before repositioning in October to the Caribbean. Among its noteworthy features will be a cantilevered, glass-enclosed skywalk that extends 28 feet beyond the ship’s edge.

MSC Cruises also has an entrant in the newbuild derby, the $742 million Preziosa, which will boast a 394-foot water slide, the world’s longest at sea.

Carnival Cruise Lines in 2013 will take the wraps off the largest ship makeover in its history when it refits the 17-year-old Carnival Destiny in a 49-day drydock. When it emerges in April, the vessel will sail under a new name, the Carnival Sunshine, and with a slew of new features.

The $155 million transformation will add part of a new deck and expand two others, giving the ship a new layout.

Another 182 cabins will be added to the ship, along with new restaurants, more sports activities and a three-story, adults-only Serenity space.

The Sunshine is emblematic of the trend toward reusing and upgrading older ships rather than ordering new ones. Cruise executives say they want to add new ships in a more measured way than in the past to avoid excess capacity, which dilutes cruise pricing.

They are putting capital into retrofitting older ships with features from newer ones to give them a contemporary feel.

Another example is the Royal Advantage program under way at Royal Caribbean International, which is spending $500 million to modernize 11 ships.

Due for a makeover in 2013 are the Legend, Brilliance, Independence, Vision and Navigator of the Seas, which range in age from 5 to 18 years old.

Prominent among the additional features will be specialty restaurants that boost onboard spending, but the whole package should enable Royal, and agents, to tout new amenities that command better prices.

Deployments in 2013 will feature more cruise segments that can be combined into longer voyages. Celebrity Cruises, for example, will offer more short cruises in Europe that can be paired with a second short cruise with a different set of port calls.

“We want to have more seven-day itineraries for that family or couple who can’t get away for a long time,” said Dondra Ritzenthaler, senior vice president of sales at Celebrity.

Luxury lines, as always, will be focused in 2013 on destination development. Azamara Club Cruises will offer a night excursion with each cruise after its two ships come out of drydock early next year.

Another trend is a tighter watch on rebating, which makes for an uneven playing field among agents. Silversea Cruises cracked down on client poaching by saying that agents who rebook a client more than 30 days after they have already booked with a different agent will not receive a commission.

Whatever actions cruise lines take to improve their prospects, some of the key ingredients to prosperity remain beyond their control.

The wild card factors of the economy, oil prices and geopolitical stability can upend any strategy the industry has conceived.

That said, economic trends seem favorable going into 2013.

The wealth effect from a rising stock market could drive a more robust Wave season early in the year. At about $90 a barrel, oil prices were off their March high of $110 a barrel. And U.S. unemployment fell to 7.7% in November, meaning more consumers would be getting a paycheck to spend on vacations.

Although the jobless rate remains high, travel agent Grace Dieleman, owner of Vellinga’s Travel Service in Chatham, Ontario, said that inverting the equation gives 2013 a rosier hue.

“You always hear about 10% unemployment,” Dieleman said, “but that also means that 90% of the population is still working.”

Norwegian unveils Caribbean lineup for winter 2014

Norwegian unveils Caribbean lineup for winter 2014

Norwegian Breakaway
By Tom Stieghorst
Norwegian Cruise Line will shuffle its lineup in the Caribbean in the winter of 2014 after the arrival of Norwegian Getaway in Miami.

Norwegian Sun, currently sailing to the southern Caribbean from Miami, will shift to Tampa, while Norwegian’s current Tampa vessel, Norwegian Dawn, will debut in New Orleans.

In addition, Norwegian Jewel will sail from Houston, giving Norwegian passengers five homeports (including New York) to choose from when going to the Caribbean.

Norwegian’s itineraries for 2014-15 also include an increased schedule of Mexican Riviera cruises. Norwegian Star will offer seven-day cruises from Los Angeles to Mexico in December 2014 and March of 2015.