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Dan Hanrahan Leaving Celebrity

Written by: Paul Motter

I don’t know anything about Dan Hanrahan. As the president of Celebrity Cruises he never once introduced himself to me, although I we have both been on several Celebrity ships at the same time, me being there to write articles for this web site as well as another major news channel web site that has readership in the tens of millions. In fact, there have been times when I intentionally placed myself in his proximity, hoping he might notice and say hi, only to have him just walk past me like I am invisible.

Because Dan never reached out to me, I never bothered to learn much about him, but the last few days I have been learning more, as I just read that he is leaving Celebrity Cruises to take a new job as the head of a company based in Minneapolis called Regis Corporation. The company owns and operates several hair salon chains nationwide under several brand names including Supercuts.

This begs the question – why would the president of a successful cruise line leave such a glamorous position to head up a company like Regis? Well, the obvious answer is that they made him a deal he could not refuse. This is certainly possible and in fact Dan said as much in a Travel weekly interview. When he was asked why he was going to Regis he said he was “contacted by a headhunter representing a company that “was looking for new leadership, for somebody who understands good consumer experiences.” that he felt was just too good to pass up.”

“I love the cruise industry and I love our company, but something really exciting came along and it was too good to say no,” he said. More on this down below.

Looking Back on Dan

Perhaps if Dan and I had met I would care more, but I am looking at why he is leaving dispassionately. It is important to note that Dan is not one of the rarified few who grew up in this cruise business and never strayed; like Richard Fain, Micky Arison, Vicki Freed and a host of other company presidents. Dan worked at Royal Caribbean International for just 13 years and only spent the last eight years as president of Celebrity.

Before he was president of Celebrity he served as the senior vice president of sales and marketing at Royal Caribbean, a post now partly filled by Vicki Freed (SVP of Sales at RCI) who left Carnival Corp. when Bob Dickinson left and Gerry Cahill was named the new president of that cruise line. I don’t think Vicki has anything against Gerry, I just think she had higher expectations from Carnival management (that means you, Micky).

I am hoping Royal Caribbean will see its way to name Vicki Freed as the president of Celebrity Cruises. Celebrity is a fine cruise line that does not need better marketing, but it certainly needs lots of help in terms of sales – the Solstice-class ship cruises are selling for a song. Of course, even Hanrahan noted it is a lot easier to drop prices on cruises than it is to raise them. But that is especially hard when you have six of your eight ship fleet in Europe in 2012. This has been the worst year ever in Europe, a market Royal Caribbean has had very high hopes for the last few years.

Right now Celebrity has Constellation, Infinity, Eclipse, Equinox, Reflection and Silhouette over there, and plans to add a seventh, Constellation, next year.

Do I think Vicki will get the nod? Unfortunately she lost all seniority when she left Carnival to go to Royal Caribbean. However, Hanrahan was also at one time the president of Azamara and Royal Caribbean hired Larry Pimentel from the outside to manage that line – along with Edie Bornstein. There is a good chance one of those two will be named for the Celebrity presidency. Perhaps Pimentel to Celebrity and Bornstein to Azamara?

Europe – Hanrahan’s Waterloo?

Like Napoleon, Hanrahan was done in trying to conquer Europe. Europeans are just not cruising this. The Concordia incident had a lot to do with scaring Europeans away. They were much closer to the event and it dominated their headlines far more than it has here. With less cruise experience they also scare far more easily. Then there is the unrest in Athens and for that matter the new regime in Egypt is actually talking about tearing down the Pyramids at Giza. Can you imagine anything worse for Mediterranean cruises than a crazy regime that wants to destroy one of the eight wonders of the ancient world?

All companies, when they have a bad quarter, need to explain the reasons why to the board of directors and to shareholders. If anything, it seems possible the earnings report the company should have scheduled for around July 22 will not be pretty – based on the fact that Celebrity and Royal Caribbean have been increasing their presence in Europe and outside the U.S. steadily for years now.

In any case, Dan’s is the cruise outsider at the company, and it appears there is a very good chance he will made the scapegoat. Not that the company will say anything was Dan’s fault, they have been very careful to give us the appearance that Dan is leaving on good terms to go to greener pastures. But I won’t be surprised to hear them say how thrilled they are to have [insert name here] as the new president of Celebrity Cruises very soon now, very possibly during that earnings report.

And we won’t be hearing much about Dan Hanrahan anymore, at least in this cruise industry, but we do wish him the best at his new job at Regis. He is going to need it: Dan is taking over from a guy who served as the CEO for the last couple of weeks. Before that the man who had been serving as CEO and COO since February chose to announce his retirement as of June 30th instead of taking the job Dan is now getting. Previously, the longest lasting CEO was Paul Finkelstein who quit in February as CEO and left the company all together in May. All of this turmoil at Regis was due to a “hostile investment group” that got three of the board members fired. So, no one at the company wants the position, but it’s Dan’s dream job?

By the way – Dan made well over $2-million at Celebrity last year. The current CEO of Regis has a salary about 1/3 that amount, $717,705. Sales at the company have been down for 16 consecutive quarters. And they made him an offer he couldn’t refuse?

I could go on – I have nothing against Dan at all, I just couldn’t help looking at the big picture. Dan will be moving from Miami to Minneapolis, but he says he will keep an apartment in Miami. Who wouldn’t? And so it goes – all I can say is “Bye Dan, wish I had a chance to get to know you better.”

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Comments

Comment from suzanne@choozientertainment.com
Time July 12, 2012 at 8:12 pm

Dear Paul,

This was very interesting reading. I love that you don’t mince words in your blogs. That is why I always find them entertaining to read and keep coming back for more. Keep up the good work! :-)

Comment from Paul Motter
Time July 13, 2012 at 8:06 am

Thanks Soozie…

This is an interesting development and I hope RCL is able to get those beautiful new ships at Celebrity the kind of per diems they deserve. I have telling our readers they are the nest value out there for two years now.

Ironically they built 5 (will have soon). But Oasis and Allure are just as popular as ever and they stuck to two.

Is it possible a cruise line can grow too big too fast?

Although NO cruise line has ever admitted it, I think the answer is yes.

Comment from Kenneth Eden
Time July 14, 2012 at 4:05 am

One line that has really grown, in effect, two, are MSC and AIDA, both different as night and day.

I personally feel that the Regis salons are a cheapening of a product, like chain resataurants, they are everywhere, and have one technique or formula for cutting hair, so it is the same cut at everysalon, I am told, I do not know from experience.

As for Mr. Hanrahans relacement, lets hope they don’t lessen the Celebrtity product, as it is a fine one, regardless of price.

Comment from Paul Motter
Time July 15, 2012 at 10:44 am

Celebrity Solstice class is one of the most beautiful in the entire cruise industry, and the fact that those ships are selling for as little as $1299 for a 12-day Med cruise is too bad, they deserve far better.

http://www.celebritycruises.com/search/searchResultsVacationItinerary.do?packageid=CS12M308&dest=EUROP&shipCode=CS

I don’t have the answers – but it seems a bit much to have all four of the ships in Europe every summer. Of course pricing is going to deteriorate with so much identical capacity in one market. If anything, I think the one thing we will see is redeployment of these Solstice ships to more varied markets, and that would be good for evryone.

Comment from aspengal
Time July 20, 2012 at 8:12 am

As a long time cruiser with X my favored line, I feel change is needed. X now has too many ships doing same old itins Food quality has really gone down.I did hear they have worked on menus.I know there are too many new ships, econYou can get on Celebrity for same or less than CCL.Best Europe fares ever. Personally I wish they would do some new longer routes ala HAL and Princess.

Comment from Paul Motter
Time July 26, 2012 at 10:14 am

By the way – Royal caribbean reported earnings today and I was pretty accurate in my predictions about Europe. Unfortunately, the company reported a loss, largely because European sales were down 10% (a significant amount).

But here is the good news – Dan will be guaranteed a much better salary than previous CEOs at his new job with Regis, and is being given obvious incentives to stay with the company. It only begs the question of why inside people were not good enough for the board – but an outsider will be paid so much more, when the he has not yet proven anything. I do not have any answer to that question, except to say it doesn’t say much good about the current management. Here is the news release:

Regis paying Hanrahan millions as new CEO

Minneapolis / St. Paul Business Journal by Ed Stych, Web Producer
Date: Tuesday, July 17, 2012, 7:42pm CDT

Daniel Hanrahan will be paid an annual base salary of $850,000 as the new CEO of hair salon operator Regis Corp. — plus he’ll be paid millions in incentives and stock awards over the next year.

Edina-based Regis (NYSE: RGS) said in a filing with the U.S. Securities and Exchange Commission Tuesday that the former Royal Caribbean Cruise Ltd. executive will be paid the base salary annually through June 30, 2014. After that his salary will be subject to an annual review by the company’s board.

The SEC filing also laid out these terms of Hanrahan’s employment:

He’s eligible for an annual incentive award equal to 125 percent of his base salary ($1.06 million based on his current base) for achieving performance targets. But Hanrahan has been guaranteed the $1.06 million incentive award for the fiscal year ending June 30, 2013.

Hanrahan will receive stock awards valued at $2.25 million for fiscal 2013.

He will receive two “special equity awards” when he starts his job Aug. 6. The first is $2 million worth of stock, which will fully vest after five years. The other is 20,000 shares of stock that will vest if the company’s stock trades above $35 a share for 20 consecutive trading days sometime over the next five years. Regis’ stock closed at $17.60 per share on Tuesday. At $35 per share, 20,000 shares would be worth $700,000.

Regis also will pay up to $100,000 of any loss Hanrahan suffers when he sells his current home.

Comment from Kenneth Eden
Time July 27, 2012 at 5:03 am

These are my own thoughts regarding Celebrity and the opertaion they offer.

First, they belong to a main stream entry level cruise line, Royal Caribbean, and the same format for the cruise RCI offers seems to be what is good enough for Celebrity. It is a pity, but with a new President and CEO maybe that will change.

As for the food, it has inmproved dramically, and stands out on Celebrity, along with service, these two things alone make them truly viable in the “Premium Cruise Line” category.

Not to mention gorgeous ships. I would be hard pressed to fault the “Solstice C;ass”, and the trickle down effect it has made to the entire fleet through enhancements and rennovations, save for the Xpedition vessel.

Comment from Kenneth Eden
Time August 1, 2012 at 5:39 am

I think the new placements of key personnel will benefit Celebrity.

Comment from Greg & dobbs
Time August 3, 2012 at 5:11 pm

We wish Michael Bayley the very best as President and CEO of our favorite line, but agree with Doug Ward that the product is under-priced. If Celebrity hopes to maintain its reputation as the finest “premium” cruise line, it will need to focus on a culinary experience once highly regarded in all venues when Chef Roux reigned. Yes, Chef Van Staden was at the “helm” when QSine rolled out, but patrons have generally been critical of MDR cuisine since Michel Roux departed simply because he set such high standards. We believe Celebrity is attempting to spend more on quality food as the economy struggles to right itself and the line reacts to harsh criticism from loyalists regarding MDR cuisine since Royal Caribbean intervened, but to truly succeed, pricing has to adequately reflect costs. We ARE willing to pay more for what Celebrity stands for, was once, and can become, again.

Comment from Kenneth Eden
Time August 6, 2012 at 4:43 am

Over the years many high up execs have been hired to “run” cruise lines that have had absolutely no cruise experience with cruise lines, say, perhaps they have cruised. Without naming anycruise lines or people, I have seen hotel, car rental and others not involved in any sort of tourism take the helms of a cruise line, as CEO and/or president. Most never stayed with the line(s) and others have made a success.of their positions. Major hotetl corporations have also tried to run cruise lines, mainly with dire results.

I was once very enamoured with Celebrity, and lost interest in it for personal reasons over the years, only to have rediscovered it and have truly enjoyed it again. I remember how wonderful the product was during its infancy with Chandris calling the shots, and Celebrity was the perfect New York vibed replacement for beloved Home Lines.

I think it will a tough time ahead for any cruise line to top the Solstice Class ships. Breath taking these ships are, with ques from this esteemed class now retrofitted into the entire Celebrity fleet, except Celebrity Xpedition, and that may change, since Silver Sea will break into the Galapagos market, and a new competion in that market will begin.

The dining has become very much important on Celebrity once more, with master chef, and James Beard nominated chef, Jaques Van Staden, with his superbly trained on board chefs.

As for pricing, it just goes to show that lower fares does not mean an inferior product, and Celebrity offers a high premium product, while others in the main stream category may charge more and give less. Remember, Celebrity is a stepping up line from their parent, Royal Caribbean, not that that is a bad thing.

Comment from Greg & dobbs
Time August 7, 2012 at 6:23 am

Mr. Eden, we’re thrilled to hear you’re, once again, enamored with Celebrity. As brand-loyalists, we’ve also observed a number of changes since Rick Sasso departed following RCCL’s acquisition in 1997. Cost-cutting resulted in our having to lower expectations, particularly when it came to the MDR experience as noted in our previous contribution to this blog. While Chef Van Staden was able bring some fresh and innovative ideas, we were constantly reminded that the dining experience simply wasn’t what it was under Chef Roux and some friends even went so far as to stop sailing Celebrity in favor of Princess, a Carnival brand. Naturally, we felt if Carnival could allow Princess to concentrate on its culinary offering, why couldn’t RCCL do the same for Celebrity? Now, however, there’s a change in the wind! Chef John Suley has recently and quietly replaced Chef Van Staden and is the Director of Culinary Operations at Celebrity. Like Van Staden, Suley comes to the fleet with an impressive resume for one so young. We’re excited to see how things go, but one thing’s for certain. If the budget doesn’t support quality, it won’t be there. We pray the bean counters at RCCL understand this and allow Celebrity to operate with greater autonomy facilitating the rebirth of a once glorious dining reputation.

Comment from Kenneth Eden
Time August 8, 2012 at 5:15 am

And, that is what it is all about, change and perfecting the cruise line product as a whole, not as a mere bandaid.
My partner and I just booked another Celebrity cruise, and am most anxious to taste the efforts of chef Suley.

Comment from Kenneth Eden
Time August 8, 2012 at 6:47 am

Tis interesting to sail on another line, the competition, as it is, to think their food is better – I beg to differ, as we were loyaists to said above line and left it many cruises ago, for the MDR and auxiliary venues as they were inferior. Our mantra, once burned we sail on…… Its just a matter of taste. I am delighted to know of chef Suley and his association with Celebrity.

Comment from Kenneth Eden
Time August 31, 2012 at 4:19 am

Just a quick aside for Greg & dobbs

You do know Rick is president and ceo US for MSC Cruises.

.

Comment from Katie
Time August 6, 2013 at 5:54 am

I’m wondering where my comments went Paul Motter??? I was the first to respond to your negative comments regarding my cousin Dan Hanrahan and want to know where it went! Interesting :)

Comment from Paul Motter
Time August 6, 2013 at 8:49 am

Katie – honestly I never saw your comments for this blog. I am sorry if they somehow ‘disappeared” but I had nothing to do with it. Feel free to repost them.

Comment from Rose
Time September 23, 2013 at 11:04 pm

Dear Paul: I am a Regis employee since March 2013. I work at Borics and I love my job heres the but…. we had a meeting today about customers and how to get our count up for the next quarter and to bring them in. This to be done with out discounts, promotion sales, with no remolding the stores. The store I work at has not been remolded since it was built 15yrs ago, green walls which make the customers hair look ashy,stains in the carpets, the store is not appealing to our customers. I stated it needs to start with corporate to get customers in here specially since I live in a small town with 48 or so salons at which there’s just 9 in half mile radius. Also one that runs specials of 7.99. I can see now why they can’t make any changes for which it will interfere with the amount of money Dan will be making. Mean while I make 7.40 a hr with no raises in the future. Not like Dan will be getting his raises and taking credit how sales are going, also this year Dan has made the decision to be open on holidays, which we have not received what holidays we will be open for but this labor day at which the stores haven’t been open, this is his idea of bringing customers at which I received straight time. We didn’t increase sales that day if anything they lost. They didn’t give notice to customers until a week before. Dan has also stop mailing coupons they are sent through email. Alot of customers state they don’t receive them. Dan is doing alot of wrong changes for a person that has never held a pair of shears, at which we cut our own way we are not taught to do all the same hair cuts that’s another franchise. I am very disappointed on how I have to get customers in to make him millions at which he should help the people that keep regis going. I have posted the news article on my facebook to inform my co workers on what type of moneys and person Dan is. I really hope he doesn’t sink our ship. As far we have a small leak in the bottom bow
Thank You for time
Rose

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