Royal Outlook Improves

Post-Wave bookings on a tear, says Royal Caribbean chairman

By Tom Stieghorst
Allure of the SeasRoyal Caribbean Cruises Ltd. reported an unusual surge in bookings in from mid-February to mid-April, a stretch when the booking pace typically decelerates.

Company chairman Richard Fain said that while the Wave season had been merely “typical,” which was slightly concerning, bookings in the past eight weeks were up more than 20%, driven by promotions.

“The volumes have just been unprecedented,” for a period in which the booking pace usually slackens, Fain said in a conference call with Wall Street analysts on Thursday.

He said promotions such as Royal Caribbean International’s Kids Sail Free and Celebrity Cruises’ 123Go had allowed RCCL to make up most of the booking deficit it had going into the last week of February.

Although occupancy levels are surging, pricing remains lower than a year ago. Fain also said “quality demand” in regions outside the Caribbean is contributing to the surge.

RCCL profit falls 65%, but outlook improves

By Tom Stieghorst
Royal Caribbean Cruises Ltd. raised its 2014 earnings guidance by a nickel a share despite reporting lower earnings for the first quarter.

Net income was $26.5 million, or 12 cents a share, in the quarter ended March 31, down from $76.2 million, or 35 cents per share, in 2013.

But Royal Caribbean said booking volume for the past three months have risen 16% year-over-year, with bookings for the past 8 weeks up by more than 20%, stronger than typical post-Wave periods.

The company raised its profit forecast by 5 cents a share, or about $11 million, to between $719.2 million and $763.5 million.

“Despite pressures in the Caribbean, the diversity provided by our global footprint is proving its value,” CFO Jason Liberty said.

In 2013, Royal Caribbean earned $473.7 million.

Cruise lines back on the tube with new advertising efforts

By Tom Stieghorst
Cruise lines are returning to TV advertising for the first time since the Great Recession in 2008, giving agents hope that pent-up demand will be stimulated by the media blitz. Within the past six months, Carnival Cruise Lines, Princess Cruises and Celebrity Cruises have in total pledged more than $60 million to new marketing campaigns that rely mainly on TV. The latest is Celebrity, which last week launched its $16 million “Remember Everything” campaign on the Bravo channel.

Celebrity Cruise New Advert

A void created by the near absence of the cruise brands on the airwaves has left the industry’s image to news programs and let it slip from consumer consciousness, said Bob Dickinson, a marketing expert and former president of Carnival Cruise Lines. “The first stake in the ground is: any advertising is better than none,” said Dickinson, who remains a consultant to Carnival Corp.’s four North American brands. Cruise lines have shied away from the biggest mass-market ad channel for a number of reasons. After the 2008 economic meltdown, many consumers were hard-pressed by job losses and mortgage woes, making a big spend on TV unproductive. Some cruise lines, Carnival Cruise Lines in particular, developed an alternate media strategy that leaned more toward online and social media as those channels attracted younger and growing audiences. Finally, the climate for brand advertising was soured by the 2012 Costa Concordia sinking and the 2013 Carnival Triumph fire, which called for a more subdued and policy-oriented marketing response. The result, according to Dickinson, is that cruises have not been a top-of-mind vacation choice. “We were not stimulating the demand in a positive sense, and yet CNN and the news [coverage] was very negative,” he said. Even in an ideal climate, the expense of TV makes it a big risk for all but the largest lines. Magazines, billboards, radio and online are all more affordable, although none connect with a mass audience as well as television, media experts say. In 2012, Carnival Cruise Lines spent $2.6 million on outdoor advertising, $1.5 million on newspapers, $732,000 on radio and $321,000 on magazines, according to Kantar Media, a media monitoring company in New York. Only its Internet spend of $10.7 million came close to the $10.8 million it spent on television. But in 2013 the company decided that after the worst of the reaction to the Triumph fire had passed, it needed to come back in a big way to rebuild brand connection. So it created “Moments That Matter,” a $25 million campaign that featured emotional stories about standout memories provided by past guests and narrated from their point of view.

Carnival Cruise new advert

The ads were somewhat of a departure from the high-energy, Fun Ship themes of the past, a change that Carnival executives said was appropriate to the mood following the Triumph uproar. Emotional response For varied reasons, all of the new campaigns, including “Remember Everything” and Princess Cruises’ $20 million “Come Back New” theme, are designed to evoke emotion and include the passenger point of view. “It seems to be the new trend,“ said Bill Pedlar, a former vice president of marketing at Holland America Line who now runs Knightly Tours, which packages vacations in Alaska and the Canadian Rockies. “It is much more dealing with how you feel, what’s your experience.” Pedlar said he liked a Carnival ad in which a daughter learns that “work mom” and “vacation mom” are different. “To my mind, that was a good target because it talked to the multigenerational thing,” he said. Carnival’s ads appeared on national network TV, as do many of those from Royal Caribbean International, which never really stopped advertising during the recession and whose $45 million annual TV budget is the largest by far in the cruise industry. Smaller lines tend to take a more selective approach. Norwegian Cruise Line ran TV ads in New York and Miami to promote its Norwegian Breakaway and Getaway ships. MSC Cruises advertised on cable channels for the first time in November when it brought its MSC Divina to Miami year-round. This year, Holland America Line has targeted six cities for an eight-week run of TV spots, said Mark Kammerer, senior vice president of marketing and sales. While Pedlar said the new, more emotional ads from Celebrity and Princess could draw noncruisers from upscale resorts, Dickinson said it is important to keep hammering home the basics of a cruise and cast as wide a net as possible to get more cruisers. “I‘m not sure beyond ‘fun’ we want to get too emotional until we know what [a cruise] is,” he said.

Royal Caribbean certified by autism group

By Tom Stieghorst

Royal Caribbean International said it is the first cruise line to win fleetwide certification from Autism On the Seas, a group that helps families with autistic members with their vacations.

The certification requires that a cruise line make certain accommodations for autistic passengers, including special staff training.

The guidelines also include providing sensory related toys, autism-friendly modification to youth activities, autism-friendly movies, priority boarding, dietary offerings (including gluten-free and dairy-free), and several modifications to services for groups of guests with disabilities.

Lisa Lutoff-Perlo, Royal Caribbean’s executive vice president of operations, said the cruise line has been working with Autism on the Seas for more than seven years.

The organization is taking a staff cruise on Serenade of the Seas on March 8.

On its website, Autism on the Seas said it also works with Carnival Cruise Lines, Celebrity Cruises and Disney Cruise Line.