Agents assess pros and cons of Royal Caribbean restructure

Agents assess pros and cons of Royal Caribbean restructure

Agents assess pros and cons of Royal Caribbean restructureAgents are concerned that plans to move the Royal Caribbean International and Azamara Club Cruises trade and client call centre to Guatemala could impact service levels.

The move is part of a proposed restructure of RCL Cruises to create individual businesses for Celebrity Cruises, Royal Caribbean and Azamara.

But agents welcomed the dedicated focus on each of the three brands and the proposed creation of a 50-strong Celebrity Cruises guest and trade services team to be set up in the UK.

Moving the Royal Caribbean and Azamara call centre to Guatemala could result in the loss of 100 jobs. A consultation period has begun.

The new structure is planned to take effect from January 1, 2014. Jo Rzymowska, associate vice-president and general manager, will become managing director for Celebrity Cruises. Separate managing directors will be appointed 
for Royal Caribbean and Azamara.

John Sullivan, head of commercial at Advantage, said: “I am concerned about the call centre being moved. When this has happened with other companies the service has suffered.

“But on the flip-side, splitting the three brands is good. Having separate teams should result in our members having enhanced service and support.”

Peter Ruck, of GoCruise with Peter Ruck, said: “This would appear to benefit those agents booking mainly Celebrity Cruises.

“I don’t know of any consumers who want to deal with foreign call centres.”

Speaking to Travel Weekly, Michael Bayley, Celebrity Cruise’s president and chief executive, said: “As the individual brands develop and grow, they have different strategies. At Celebrity Cruises our focus markets are the UK and Ireland, North America and Australia.

“Royal Caribbean has significant focus in the UK and Ireland, but it has significant global sourcing and therefore a greater need for a multilingual global contact centre operation.”

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.”

Celebrity recounts decisions after Millennium breakdown

Celebrity recounts decisions after Millennium breakdown

By Tom Stieghorst

A new propulsion pod for the Celebrity Millennium is transported to a ship in Rotterdam, Netherlands.The choice faced by Celebrity Cruises management wasn’t pleasant. They could try to repair a damaged propulsion pod on the Celebrity Millennium at the risk of a third failure, or they could swallow the millions of dollars of expense required to cancel four cruises, send 2,000 people home by chartered plane and swap out the pod in an unscheduled drydock.

They decided to spend the cash.

“We certainly didn’t want to put the ship back in operation and then a month or two later have another incident,” said Celebrity CEO Michael Bayley. “We felt as if that was simply not acceptable.”

In a phone briefing this week, Celebrity offered a rare behind-the-scenes account of its decision-making process as it struggled with a balky ship during prime season in Alaska.

The briefing was an example of the heightened scrutiny to which cruise lines feel they must respond after witnessing the negative publicity resulting from the fire earlier this year on the Carnival Triumph.

“Certainly we’re interested in being very transparent about everything,” Bayley said.

The problem Celebrity confronted has periodically plagued nearly every cruise line that uses pods, the self-contained motors bolted beneath the stern that began to be used in the 1990s.

Although they have many advantages in terms of maneuverability, reliability has been an issue. Royal Caribbean Cruises Ltd., Celebrity’s parent company, settled a long lawsuit in 2010 with Rolls-Royce, the maker of the Mermaid brand of pods used on four of Celebrity’s older ships.

However, Bayley said, the latest problem on the Millennium was a different one, having to do with the motor’s electrical parts, not the bearings, which were the focus of the lawsuit.

The first electrical failure on the Millennium forced Celebrity to delay departure of its Aug. 9 cruise from Seward, Alaska, to Vancouver by several days and to cancel all the port calls in Alaska.

After repairs, the ship made it to Vancouver, but on the return to Seward, a similar electrical problem flared in a different part of the pod. That was a surprise, Bayley said.

Again, experts were brought in. The cruise paused in Ketchikan, Alaska, while the pod was examined, and reluctantly the conclusion was reached that the pod had to be replaced.

That decision triggered a series of logistical tests. The first was getting the 2,000 passengers home from Ketchikan, which has a population of 14,000 and an airport with a single, 7,500-foot runway.

“It’s a beautiful destination to go to, but it’s not a destination designed to move a couple of thousand people from,” said Bayley. Celebrity chartered a half dozen jets at a cost of several million dollars to do the job and sent 30 people from Miami headquarters to help.

Next, Celebrity had to arrange a drydock on short notice. Bayley said Celebrity worked down the list of shipyards on the west coast of North America and even looked in Russia and Asia before settling on Grand Bahama Shipyard, in Freeport, where a part ownership by Royal Caribbean allowed for the rearrangement of some schedules.

“Like all situations, there’s always a puzzle palace,” Bayley said.

Celebrity had a spare pod in Europe, but it had to be transported from Rotterdam, Netherlands. After rejecting the idea of air-freighting the 250-ton pod, Celebrity chartered a ship to deliver it.

It’s a four-day job to remove the damaged pod and install the new one. “It’s fairly complex,” Bayley said. “Obviously we’ve got the best technical people in the world, and we’re feeling pretty comfortable with the process.”

After the old pod comes off, it will be returned to France on the chartered cargo ship, to be rebuilt.

Testing of the new pod is expected to be done by Sept. 12. Bayley said Celebrity was not sure whether it could offer some kind of cruise between that date and its next scheduled cruise from San Diego.

“Our intention is to be in San Diego with full operations on Sept. 22.”

In the meantime, Celebrity has had to keep the Millennium’s 843 crew members occupied with deep cleaning of cabins, additional specialty training and the relocation of the future cruise desk to a different deck.

The Millennium’s chefs are using the time to dream up a few surprises for guests who have booked the San Diego cruise, Bayley said.

The total cost of the Millennium incident to Celebrity hasn’t been disclosed, but Bayley said it would include the compensation for two impaired cruises and four canceled ones, which all involved full refunds, plus the housing and food for affected guests, air change fees, future cruise certificates, plane charters to Ketchikan and the lost onboard revenue from the scrubbed cruises, in addition to the repairs. One Wall Street analyst has estimated the cost at $31 million, not including the repair itself, which is insured.

“The brand was having a really great year, so it’s a little unfortunate,” Bayley said.

Dondra Ritzenthaler, Celebrity’s senior vice president of sales, said the breakdown had not had any noticeable impact on bookings, a fact she attributed mainly to travel agent support.

“Because we’ve had an authentic partnership with our travel partners for years, when something like this happens, they are really rallying behind us,” she said.

Just in case, Bayley is making a video for travel agents to recap Celebrity’s response to Millennium’s problems.

“We want his genuine apology as the leader of our brand to really be said in a more formal way,” Ritzenthaler said.