Cruise line consultant Bob Dickinson

Posted on 2 June, 2014 by Spacejunkie2

Cruise line consultant Bob Dickinson

By Tom Stieghorst

Former Carnival Cruise Lines CEO Bob Dickinson has spent the past year consulting for Carnival Corp.’s four North American brands. His assignment ends May 31. Dickinson took time out from a hiking trip in California’s Napa region to speak with cruise editor Tom Stieghorst about how cruises need to be marketed and how crucial agents are to capturing the first-time cruiser.

Q: What’s your overall opinion of the current state of cruise line marketing?

A: For the last number of years — six, seven, eight years — cruise lines have been undermarketed. When the fuel prices went up, the first thing to go was the TV advertising budget.

Social media is fine, but social media doesn’t reach first-time cruisers. It’s sort of like Al Gore’s inconvenient truth — or in this case, an inconvenient falsehood, that we can substitute one for the other.

Q: Is anyone doing better than the rest?

A: Look at Viking River Cruises and what they’ve been able to do with Masterpiece Theater.

It’s not a huge TV buy, but the visual of whatever it is that is in the commercial fully explains that riverboat experience, makes it aspirational, makes it achievable, makes it so that I see myself in that picture, certainly in the over-50 set, which is who they’re marketing to.

Q: What role do travel agents play in connecting the majority of people who have no experience with a cruise to the insiders who run the industry?

A: Travel agents are the biggest gateway to first-time cruisers, and the cruise industry in the last couple of years has not always been friendly to the travel agent — and in some cases tied their hands. When you’re selling three-, four-, five-day cruises where the noncommissionable fare is as much as the cruise ticket and you’re getting 15% of $149, why would they sell that? Let them sell Sandals, let them sell river cruises, things where there’s a lot of money.

Q: What changes should the cruise lines make?

A: I think some cruise lines have already changed back and have realized that the industry has overplayed its hand. In general, I think all of the brands, certainly the brands I worked with for the past year, are more agent-friendly this year than they were a year ago in terms of their policies and their procedures: pricing, co-op advertising. Every one of the four Carnival North America brands has better policies in place now than they did a year ago.

Q: Did you end your consulting agreement with Carnival or did management?

A: Very candidly, that was their choice. A consulting agreement is like a marriage; if one partner doesn’t want it, the other doesn’t either, if you know what I mean. If there is a willing audience at some point, I would like to do some [other] marketing or management consulting.

Q: Are you still working with the Camillus House homeless shelter in Miami? What else are you up to?

A: On Aug. 1, we’re going take another 100 of the most hard-core, chronic homeless in the city and start them on the process of getting their lives back together. [But] I’ve cut back my time commitment, from 30 to 40 hours a week after I retired to 10 to 20 hours a week now. [My wife] Jodi and I are kind of on a second honeymoon. [In Napa] we’re walking about two hours a day on average, enjoying the restaurants and just hanging out. On June 4, we’ll be going to [our] home in North Carolina. We’ll be there throughout the summer.

Carnival CEO downplays MSC growth but sees pricing risk

Posted on 24 May, 2014 by Spacejunkie2

Donald – Impact of MSC newbuilds depends on how they’re positioned

Addressing how the big MSC newbuilds may reshape the competitive climate, given they are headed to ‘the most sought-after warm weather destinations in the Mediterranean, South America and Caribbean,’ Carnival chief Arnold Donald first downplayed the impact then conceded there may be risk for pricing.

‘It’s four ships. We have 102. In the scheme of things, you’re looking at a tiny percent impact, depending how they’re positioned in the market,’ the Carnival Corp. & plc CEO said Thursday, shortly after MSC’s orderbook went from two to four big ships, all above 150,000gt.

MSC ordered today at Carnival’s traditional builder of choice—Fincantieri—and broke the news just as Donald headed into the second informal media call of his tenure as CEO.

After his initial remarks, Donald was pressed on the potential impact to the Caribbean business of large capacity increases. And how can pricing go up for Carnival if it constrains capacity growth but competitors don’t?

Cruising’s major players have reported lower net yields in the industry’s most important region this year. Recently Norwegian Cruise Line CEO Kevin Sheehan singled out MSC Divinaas a big factor in the softer Caribbean rates.

The Caribbean issues weren’t due to one new ship, Donald told reporters, adding: ‘It was a 20% increase in a market that’s highly saturated anyway’ and coming during a period of recovery from incidents.

Yet Donald allowed there is the ‘risk of a psychological impact’ on customers. If they see very low pricing they may think ‘cruises only cost so much and I’m not going to pay more.’

Also, the Carnival chief said MSC, or any single brand that adds new ships, risks ‘cannibalizing’ its existing vessels.

‘On a positive note,’ he added, ‘I’m sure they will be nice ships’ and newbuilds create ‘energy and excitement.’

As for Carnival’s strategy to raise pricing, the company is looking at best practices of all the brands for ways to push up on-board and ticket revenue. Given its scale, if Carnival can do so by even a small amount, ‘we will generate extraordinary returns,’ Donald said.

At the same time the company will leverage its scale to cut costs. As an example, Carnival is the fifth largest purchaser of airline travel in the world yet ‘we never behaved like that. We behaved like 10 brands.’

The greater focus, though, is on revenue. ‘Best practices across brands will lift us a dollar, 2 dollars or 3 dollars. An extra few dollars on cruise tickets means a lot with 78m cruise days,’ Donald said.

These efforts are needed to get back to double-digit returns, ‘where we should be.’

Carnival to again sail Mexico’s Pacific Coast year-round

Posted on 23 May, 2014 by Spacejunkie2

By Gay Nagle Myers

Carnival Cruise Lines will resume year-round sailings to the Mexican Riviera from Long Beach, Calif., beginning in October.

The line last sailed to Mexico’s Pacific Coast year-round in 2012, although it has operated some cruises on a seasonal basis since then.

The Carnival Miracle will operate three seven-day itineraries, starting next April.

One itinerary is a three-port sailing with calls in Mazatlan, Cabo San Lucas and Puerto Vallarta. That cruise will mark the return of Carnival to Mazatlan since its pullout in early 2011, citing safety and security issues for passengers following several incidents of crime near the port.

Other lines also cut the Mazatlan stop at the time but have since returned.

“With the return of Carnival, five major cruise lines have now resumed service to Mazatlan, including Princess Cruises, Holland America Line, Norwegian Cruise Line and Azamara Club Cruises,” said Frank Cordova, secretary of tourism for the state of Sinaloa.

“We are extremely pleased with the positive developments that have transformed Mazatlan over the past several years, including those in the cruise industry, and are excited about the prospect of future growth in tourism to the destination,” he said.

Those developments include a new $3 million tourism corridor between the Port of Mazatlan and the city’s historic center, making it easier and safer for cruise visitors to reach the heart of the city.

Carnival’s two other Mexican Riviera itineraries include a two-port voyage that pairs a stop in Cabo San Lucas with a two-day overnight stay in Puerto Vallarta.

The third itinerary pairs a visit to Puerto Vallarta with a two-day call in Cabo San Lucas.