Cruise lines use initiatives to break free from the pack

Food and film pairings at the Rooftop Terrace on Celebrity’s Millennium-class ships is part of the line’s Celebrity Distinction program.

Cruise lines are increasingly bundling their innovations under a catchy title or phrase that draws attention to what they’re doing in the hope of differentiating themselves from the pack.

The latest to do so is Celebrity Cruises, which announced its “Celebrity Distinction” moniker in July.

Norwegian Cruise Line coined “Norwegian Edge” in January for a package of culinary, shipboard and private island improvements.

And before that, lines created platforms such as Fun Ship 2.0 (Carnival Cruise Line), Royal Advantage (Royal Caribbean International) and Signature of Excellence (Holland America Line).

What unites them, said one marketing expert, is the desire to create a more premium image for their brand.

“These are all elite positionings within the overall category,” said Liz Dolinski, a New York marketing consultant and founder of the social media marketing firm Luminosity.

Dolinski said that cruise lines often struggle to convince travelers that their products are different from the rest “especially when you think about which are the customers who are going to pay a higher price. So they’re trying to create some specialness that rises up above their brand.”

Celebrity Distinction brings together a host of initiatives that Celebrity has launched in the past year. It includes some traditional elements, such as drydock upgrades to three older ships. It also applies to more novel ones, such as the pairing of food and cinema on Celebrity’s outdoor Rooftop Terrace on Millennium-class ships.

And it has some singular features, such as Celebrity’s naming one of its ships for the first American-born female captain.

Dondra Ritzenthaler, senior vice president for sales, trade support and services, said what motivated the new platform was that Celebrity was not gaining enough attention for its unique features when it announced them individually.

“Platforms like these give [us] the ability to be able to tell a wonderful story in a way that encompasses more than one thing at a time,” Ritzenthaler said.

Speaking to a group of travel agents at an event in New York Harbor last week, she said that although Celebrity was communicating its distinctiveness, “people weren’t really grasping it, weren’t appreciating the value we were adding or the money we were spending, because it came in one at a time.”

Labeling programs can be particularly vital to upmarket lines, where service programs and other tweaks can be subtle, Dolinski said.

Mass-market lines such as Carnival have used labels to aggregate the hardware improvements on their ships. Fun Ship 2.0 is devoted to physical improvements such as new restaurants, bars and entertainment venues.

Likewise, Royal Advantage began as a refurbishment program for Royal Caribbean’s older ships.

But Celebrity Distinction includes things not so easily communicated, such as an increased number of overnight stays in key ports or more cruises that are tied to high-profile events.

Dolinski said that making features better known can be a key to higher pricing.

“If all the brands feel the same and you want a high-end customer who will pay slightly more, you have to give them something that you can’t get anywhere else,” she said. “As soon as you add an element to your product that is not present in another place but is truly unique it helps create the extra price differentiation.”

Perhaps the prototype for marketing an upgrade package was Holland America’s Signature of Excellence, launched in 2004. It grouped not only hardware improvements, such as new bars and stores, but soft goods, including special linens, and onboard enrichment programs, such as free classes on Microsoft’s Windows software.

Last year, Holland America announced a $300 million fleetwide improvement program focused initially on suites, but bucking the trend, it did not give the new package a name.

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Cruise chief targets ‘pirate’ shore excursion operators

Photo courtesy of Dave Jones

by Hollie-Rae Merrick

Cruise lines need to educate agents about the value of selling shore excursions to stop “pirate third-party operators stealing guests”, the boss of the world’s largest cruise company has claimed.

Carnival Corporation chief executive Arnold Donald told the Clia conference in Southampton that there was scope to improve the promotion and sales of both onboard and destination-based experiences.

“There has only been one year since 2006 that onboard revenues didn’t go up,” he said. “Despite any changes in the industry, onboard revenues have continued to grow.

“Those changes include shore excursions where you have a lot of, what we call pirates, but they call themselves independent operators, stealing our guests on shore excursions that they ought to be booking with us.

“It’s a missed opportunity for us.”

Donald said that working with agents would help customers differentiate between shore tours provided through cruise lines and others.

“Some of those tours aren’t the same,” he added. “They may go to the same places but they aren’t the same.

“They may not have the same insurance, they may not have the same quality guides and consumers buying online doesn’t know all that. We have to do a better job at that.

“There are so many opportunities on this.”

Donald went on to praise the performance of the UK market which he described as “robust” and performing well.

He claimed the UK was on a “positive trajectory from a Carnival standpoint”, but admitted that the industry needed to “manage smarter and not panic on price”.

He said it was important to “hang in there a little bit longer on price” to help drive up the average cruise fare.

Carnival Corporation reports strong Q1 profits

By Hollie-Rae Merrick

Carnival Corporation reports strong Q1 profits Carnival Corporation has reporter stronger-than-expected earnings for the first quarter of 2015.

The cruise company made a net profit of $49 million, or $0.06 diluted earnings per share in the last quarter, compared to a net loss of $20 million in the last year period.

It attributed its strong earnings to a rise in onboard revenues which were up 8% compared to 2014. Onboard spending rose to $889 million from $850 million, although revenue from ticket prices dropped around 3.5%.

Net revenue yields increased 2% in the first quarter of 2015, better than the company’s December guidance of up to 1%. However, gross revenue yields dropped 3.1% due to changes in currency exchange rates.

Looking ahead to 2015, Carnival Corporation said advance bookings were ahead of 2014 and at higher prices.

Chief executive and president Arnold Donald said: “The year is off to a strong start achieving significantly higher earnings than the prior year and our previous guidance.

“Our onboard revenue initiatives drove particularly strong improvement in the first quarter with onboard yields more than 8% higher than prior year (constant dollar).

“We are experiencing an ongoing improvement in underlying fundamentals based on our successful initiatives to drive demand. Our efforts to further elevate our guest experience are clearly resonating with consumers and, notably, improving the frequency and retention of our loyal guests.”

Donald said he believed results had improved off the back of “ongoing public relations efforts and creative marketing campaigns” designed to attract new customers. He referenced the success of the company’s Super Bowl advertising campaign which generated five billion impressions online before the ad had even run on TV.

He added: “Consistent with many global companies, the strengthening of the US dollar has hampered our full-year earnings expectations, masking the 3% to 4% (constant currency) yield increase our collective brands are expecting to achieve.

“Our successful initiatives to drive both ticket and onboard revenue yields have improved our financial performance and we remain on track toward our goal of achieving double-digit return on invested capital in the next three to four years.”

Folllowing a strong start to the year with bookings, Carnival said it expects full-year 2015 net revenue yields to increase 3% or 4% compared to 2014 and one point better than previous guidance for the year ahead.

However, changes in currency exchange rates means full-year 2015 earning expectations have been reduced by $219 million. Carnival said this was offset by an improvement in the company’s operating performance.