Royal Caribbean, Celebrity and Azamara to run as separate businesses

Royal Caribbean, Celebrity and Azamara to run as separate businesses

By Lucy Huxley

Royal Caribbean, Celebrity and Azamara to run as separate businessesRCL Cruises Ltd is to create three individual businesses for each of its brands in the UK, claiming they have each now grown to a size that warrants “increased focus and investment”.

The new structure, which will take effect from January 1, 2014, will see current associate vice president & general manager Jo Rzmowska become managing director for Celebrity Cruises. A recruitment process is already underway both internally and externally for separate managing directors for the Royal Caribbean and Azamara Club Cruises brands.

Each individual managing director will also get his or her own commercial, marketing and sales teams, as well as separate agent trainers and trade marketing budgets.

But the proposed structural and operational changes also include the consolidation of guest and trade call centres around the world – including the UK and Ireland team based in Addlestone in Surrey – into just three multi-lingual contact centres in Guatemala, Romania and the Netherlands, operated by an external partner, Xerox.

Under the proposal, the Royal Caribbean International and Azamara Club Cruises UK and Ireland guest and trade service call centres would be operated from Guatemala, resulting in the potential redundancy of 100 people. A period of consultation with potentially affected employees in Addlestone has begun today.

A Celebrity Cruises guest and trade services team, dedicated to the UK and Ireland, will be set up in the UK, employing 50 people.

Dominic Paul, who remains as vice president and managing director of Europe, the Middle East and Africa, said the proposed restructure was an important milestone in the history of the global RCL Cruises Ltd business:

“The only other market that we have this kind of focus is North America. This is the first time we have given any other market such attention. We have seen that when a market gets to a certain size of importance, this is the structure that works best to grow.

“The UK is the second-largest market globally and this move is a recognition of the growth achieved so far and to best position each cruise line for future development and growth.”

The three RCL brands collectively in the UK and Ireland have seen 8% growth in the last five years versus the overall cruise market in the UK and Ireland which has grown at 3% in the same period.

Asked if it meant the company, which is the second largest cruise operator in the world, would deploy more than the current five ships to the UK as a result of the restructure, Paul said: “This underlines our commitment to the UK market. We are investing in the brands and see the future potential for more growth. We hope that this will mean we can bring new ships into this market.”

The company said the partnership with Xerox would allow it to address efficiency challenges that are common in any business that has experienced rapid global expansion.

“As a renowned leader in this area, Xerox supplies the contact centres of many customer service focused brands globally. This proposal follows an extensive global review specifically looking at the operational efficiency of multiple guest and trade service centres around the world,” a statement said.

“All of the proposed changes are being reviewed in order to best position the business for future growth, whilst maintaining a competitive edge and strong customer service for trade partners and guests.”

Rzymowska said of her new position: “I am very passionate about all three of our brands, but the Celebrity role is the opportunity that I have been asked to look at and I am very happy with that.”

She described the search for her counterparts on the Royal Caribbean International and Azamara Club Cruises brands as “significant” because they are such “key roles going forward”.

And commenting on the creation of separate teams below them, she added: “There will be opportunities for the [current] team.”

Rzymowska said agents could expect to see more attention paid to them under the new structure.

“Everybody is in business to run a profitable business. And we believe that the trade seeing more of us, and us being able to give them more focused, dedicated time and more investment, will result in increased profitability for them.”

Rzymowska added: “Changes made earlier this year to the commissions structure are working for the business. There are currently no plans to make any changes to the base commission structures of Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises, including when the dedicated brand teams take effect in January 2014.”

A reset for Carnival on Europe

A reset for Carnival on Europe

By Tom Stieghorst

*InsightThe Carnival Sunshine is hosting a media group on its current Mediterranean voyage, and the top concern of the European reporters onboard is Carnival Cruise Lines’ decision to go without a ship in Europe in 2014.

The Carnival Legend, which had been scheduled to sail in Europe next year, is being deployed to Australia, after a winter season in Tampa.  It seems to reverse a promising expansion of Carnival’s sales deployment into the U.K.

At a news conference, Carnival President Gerry Cahill said it ain’t necessarily so.

“We’re not stopping marketing to the U.K. and Europe,” Cahill noted, saying it would continue to sell cruises to the Caribbean, New York and Barbados to Europeans.*TomStieghorst

But Americans made up most of the passengers on a majority of the line’s European itineraries.

“Carnival caters best to middle America,” Cahill continued. “The cost of an air ticket to Europe became very, very high, and it was causing a lot of our guests not to be able to afford to come.

“At the end of the day, when the air fare costs more than the price of the cruise, that’s a problem,” he said.

The reset on Europe comes as Carnival is withdrawing from several regional ports on the U.S. East Coast, such as Baltimore and Norfolk, Va. Tighter pollution rules mean higher costs for clean fuels at those ports, and Carnival has an aversion to higher costs. When low prices are such an important part of your strategy, anything that raises them means trouble.
So Carnival is increasingly returning to tried and true markets where it has had traditional success: sailing to the Bahamas and the Caribbean, primarily from ports in Florida.

It recently bolstered its Caribbean capacity from Port Canaveral, where the Sunshine will sail for much of 2014, and from New Orleans, where it will have two ships year-round. Miami, Tampa and Jacksonville will also be home to Carnival ships next year.

For many passengers, flying to Florida isn’t as cheap as driving to the port, but it is a lot less expensive than flying to Europe. Travel agents can sell a fly-cruise to Florida because the airfare isn’t that scary. But it does mean getting people excited about an area that many cruise passengers have seen before.

The traditional itineraries may not be the most exciting. But with costs rising, they’re the ones that Carnival can sell at a price point that middle America can afford.  Europe on Carnival will have to wait for another year.

Carnival to leave Norfolk in 2014

Carnival to leave Norfolk in 2014

By Tom Stieghorst
The Carnival Glory will be homeported in MiamiCarnival Cruise Lines is shuffling several of its ships in 2014, and one result is that Norfolk, Va., will no longer serve as a cruise ship homeport.

The Carnival Glory will stay in Miami year-round after November. It had been originating cruises in Norfolk in the spring and fall seasons out of a $36 million terminal opened in 2007.

The switch would leave the terminal largely unused by the cruise industry. Glory became the only ship homeported in Norfolk after Royal Caribbean International relocated a ship from Norfolk to Baltimore three years ago.

Carnival’s decision to keep the Glory in Miami also means it will not return to Boston, where it is currently offering a series of voyages through July.

In other deployments, the newly refurbished Carnival Sunshine will only stay in New Orleans for the upcoming winter, rather than year-round. It will move to year-round sailing from Cape Canaveral in April 2014, bumping the Carnival Dream to do seven-day cruises from New Orleans full time.

The Carnival Liberty, currently based in Miami, will shift in April to do year-round five- and eight-day Caribbean cruises from Cape Canaveral, as well.

The Carnival Pride moves from Baltimore to Tampa for seven-day cruises from December 2014 to April 2015, replacing the Carnival Legend, which departs from Tampa for Australia next August.