Cruise Insider Updates
Written by: Paul Motter
Cruise ships are still sailing full, and cruise lines are still optimistic about the future, but naturally the economy is having its effects on the industry, so here is an update on some of the inside stuff happening.
Norwegian Cruise Lines (NCL) announced its first profitable quarter in two years, actually reporting a $171.2 million profit for the quarter just ended. This is good news, as the company’s parent company, Apollo Management , is the same investment group currently holding going out of business sales at another of their investments, retail stores Linens and Things.
NCL has a new CEO, Kevin Sheehan, upon the departure of the popular Colin Veitch who took over the position some eight years ago. Veitch and Andy Stuart, EVP of almost everything during the same period, ushered in the Free-style era at NCL, practically turning the long-standing concept of how cruises should be conducted on its ear.
Veitch moved over to an advisory role to the board of directors. Stuart has been appointed executive vice president of global sales and passenger services. Kevin Sheehan was NCL’s president and chief financial officer.
Royal Caribbean has a new TV ad campaign called “Why Not?” It shows people on cruise ships having fun and asks them if they are thinking about joiniong them. Indeed, you have to give the cruise industry credit for continuing to advertise actually even more when times get tough. Cruise lines know that when the economy gets tough the value equation of cruises actually becomes more appealing to vacationers. After all, there are incredible bargains out there, and once you get onboard you are in control of how much you spend. If you choose to easy on drinks and tours, you can actually have an incredibly inexpensive vacation.
What kinds of unbelievable bargans are we seeing this week? Some of the ones the press has picked up include an 8-day Caribbean cruise on the POSH Cunard Queen Mary 2 for eight days for $499. Our own newsletter shows a 7-night NCL cruise starting at $249 perp person. That is a jaw-dropping price.7-night Princess cruises to Mexico are currently selling for $375.
On the other end of the scale, Crystal Cruises tells me they couldn’t be feeling any better about how they are weathering what appears to be the worst since 9/11 for many other cruise lines. Mimi Weisband tells me…
“As for Crystal, we feel the luxury market is not immune, but it is more resistant. Luxury travelers are going to rely on brands they can trust, reputation and consistency – which is why the message of 15 years of Conde Nast Traveler awards (and this year with one of our highest margins over large and small ships) and 13 consecutive years of Travel & Leisure awards (also higher than any large or small ship) is a powerful tool.
We are less than 2% down for 2008 and already farther ahead for our 2010 World Cruise than where we were at this time last year for our 2009 World Cruise. 2009 is softer but we’re still confident that we’ll get through it.
With a more discerning customer, Crystal is in a good position.”
Well, I can certainly see her point. First of all, Crystal is West Coast based, and although real estate prices have been hurt there, they do not have nearly the same problems as Wall Street or the factory regions. Crystal is a great cruise line, as are the other luxury lines; Silversea, Regent and Seabourn.
Speaking of 9/11 – is this current crisis in cruise sales anything like that event? The short answer is “no.” That was a travel “scare.” People were actually afraid to fly and felt like targets in airports and even ships. This is purely about money. people are reticent to spend. personally, I am hoping for a good Christmas because in reality very little has changed for most people and there is little reason we could return to normal in a reasonable amount of time.
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