Amid Europe river cruise boom, lines say there’s room for more

Amid Europe river cruise boom, lines say there’s room for more

By Michelle Baran
Viking FreyaIt’s hard to believe that 2014 will see considerably more investment and expansion in the European river cruise market than the previous couple of astonishing years of growth and interest — but it will.

For starters, Viking River Cruises will break its own shipbuilding record with 14 additional vessels in Europe next year; a startup river cruise line, Emerald Waterways, is launching with two ships and competitive pricing; and the largest river cruise company in France, CroisiEurope, has decided to make a run at the U.S. market.

And that doesn’t even cover the standard handful of newbuilds and itineraries that most other existing river cruise players are planning to introduce next year.

But even with all that added inventory, retailers insist there’s still a lot of room to grow in this category. That’s because despite all the new capacity and itineraries in the industry, river cruising still only accounts for a small percentage of retailers’ overall business.

In Travel Weekly’s Travel Industry Survey this year, river cruising accounted for 6% of travel agents’ overall business mix, and 22% of travel agents said they were already selling river cruises. But agents say that client requests for river cruises are mounting as the category continues to grow and gain exposure.

“Everybody’s asking about river cruises now,” said Debby Hughes, owner of a CruiseOne franchise in Big Bear City, Calif. “People are hearing about all the new ships and all the new changes. People are looking for something different, something a little more cultural, a little more unique. It’s more inclusive than the larger cruise lines.”

Hughes said her river cruise bookings probably account for between 10% and 20% of her overall bookings, and there is still plenty of opportunity in the river cruise market.

But even Viking, which launched 10 ships this year and six in 2012, in addition to the 14 it plans to unveil next year, has acknowledged that while the demand merits the growth, the industry needs to make sure the infrastructure in Europe can keep up.

“We have 14 Longships on order for next year because the demand among our passengers is there, and we believe that the waterways we sail in Europe can accommodate that type of growth,” said Richard Marnell, Viking’s senior vice president of marketing. “But we do recognize there is a need for investments in local infrastructure, and we will actively work to play a role in those discussions.”
Emerald pool deck
Asked if her clients have started to notice any degree of crowding on European river cruises, Hughes said they had not, nor did she expect they would.

“People are used to larger ships,” Hughes said. “They’re used to getting off with thousands of people. I’ve never had a complaint that there were too many other tourists in town.”

As for the growing issue of rafting, where river cruise ships are forced to dock alongside one another, thus requiring passengers to walk through other vessels to embark and disembark, Hughes said, “Being able to go from one boat to the next, it’s one of the quirks of being able to cruise in Europe. It’s just one of those neat things.”

Few can deny that the growth and increased competition in the river cruise industry has spurred a race for better and more diversified product.

While for some river cruise lines, such as Tauck, that has meant amping up its upscale accommodations with more suites (Tauck is launching two newbuilds in Europe in 2014 that will each have 57% more suites than the company’s existing vessels), for others, such as Emerald Waterways, it has meant coming to market with more attractive pricing and amenities.

Earlier this fall, Scenic Tours, an Australian company, announced that it was launching Emerald Waterways, which would serve as the lower-priced alternative to its existing river cruise brand, Scenic Cruises.

In an attempt to capture the four-star river cruise market, Emerald Waterways will officially launch on April 15 with the unveiling of two newbuilds, the 182-passenger Emerald Star and the 182-passenger Emerald Sky, both of which are being outfitted with more playful features such as a heated swimming pool and a movie theater.

An eight-day cruise along the Danube, Rhine and Moselle rivers on Emerald Waterways will start at $2,230 per person, compared with an eight-day sailing throCroisiEurope1ugh the Netherlands on Scenic Cruises that starts at $2,735 per person.

French river cruise line 

CroisiEurope thinks there is space in the lower-priced river cruise market, as well. After 38 years of selling river cruises in Europe, CroisiEurope this fall launched a website and call center devoted to U.S. retailers and clientele. The company’s pitch: low-cost river cruises with a multicultural mix of passengers.

“The founder of the company had the philosophy to make this product available for the mass market,” said Michel Grimm, international sales director for CroisiEurope. “Our pricing is very aggressive.”

An eight-day CroisiEurope river cruise, including meals, open bar and excursions, won’t run more than $2,400 per person, Grimm said.

As a European river cruise operator, CroisiEurope will host a mix of nationalities onboard, something the former Peter Deilmann Cruises tried to do with German- and English-speaking clients on its ships. Some observers say that strategy played a role in Deilmann’s demise several years ago.

But CroisiEurope’s executives are adamant that for the right customer, having people from different countries onboard will be seen as an added draw, not a drawback.

“This is not for people who want the safety of being with all other English speakers,” said John McGlade, director of CroisiEurope’s U.S. reservation center. “For people who want the international experience, it’s the perfect marriage.”

CroisiEurope is also building up its own fleet of canal barge vessels that have a capacity of 24 guests. The barges will allow the pricing on the canal itineraries to also be more aggressive than existing, more expensive canal barge trips that can often host only six to 12 passengers onboard.

CroisiEurope2Tour operator Abercrombie & Kent had resisted the river cruise market for years, focusing solely on those much smaller capacity and intimate canal barges in Europe.

But last year, the company introduced its first river cruise program with the launch of Connections by A&K, its new line of itineraries priced about 30% less per diem than a typical A&K small-group journey.

For 2014, Connections by A&K is expanding its river cruise offering from three departures in 2013 on the 152-passenger Amadeus Brilliant, to 18 departures in 2014 on a fleet of three Amadeus ships. The vessels are owned by Austrian shipping company Luftner Cruises, and Connections will limit its onboard group sizes to 24 passengers.

For 2014, Connections will offer nine river cruise itineraries ranging from nine to 17 days.

The river cruise industry “is growing by leaps and bounds,” Hughes said. “They’re getting innovative, they’re getting more competitive.” All of which, she said, is better for retailers in this swelling market segment, as well as for their clients.

Will CroisiEurope’s pricing, diversity resonate with U.S. passengers?

By Michelle Baran

InsightFrench river cruise line CroisiEurope is making a run at an already pretty crowded U.S. market with a simple concept: low-cost river cruises with a multicultural mix of passengers.

“The founder of the company had the philosophy to make this product available for the mass market,” said Michel Grimm, international sales director for CroisiEurope, which after 38 years in business recently unveiled a new website and call center devoted to the U.S. source market.

“Our pricing is very aggressive,” Grimm said, adding that an eight-day CroisiEurope river cruise including meals, open bar and excursions won’t run more than $2,400 per person.

“With these kinds of prices, we come with an offer that is very interesting,” he said.

For anyone who knows the river cruising market, that’s actually quite a deal.MichelleBaran
As a European river cruise operator, CroisiEurope hosts a mix of nationalities onboard, but the company’s executives said that for the right customer, that should be seen as an asset, not a drawback.

“This is not for people who want the safety of being with all other English speakers,” said John McGlade, director of CroisiEurope’s U.S. reservation center. “For people who want the international experience, it’s the perfect marriage.”

CroisiEurope, which is still run by the founder’s children, builds all its vessels in the same shipyard in Belgium. Building, owning and operating all its own vessels is how the company claims it can keep its pricing so competitive, a concept it is bringing to the canal barge market, as well.

CroisiEurope is also building up its own fleet of barge vessels that have a capacity of 24 guests, in contrast with many of the existing canal barges that can often only host six to 12 passengers onboard, rendering them an expensive vacation option.

One other differentiator? Building ships of different sizes that can navigate lesser-sailed inland waterways, including the Guadalquivir and Guadiana rivers in Spain, the Tisza River in Hungary and some of the smaller estuaries off of the Danube and Rhine rivers.

CroisiEurope is based in Strasbourg, France, and has a fleet of 30 ships, including several barges and coastal cruisers, which sail in France, Italy, Spain, Portugal, Germany, Belgium, Eastern Europe, the Mediterranean, Vietnam and Cambodia.

River cruise lines lose millions of dollars to European flooding

River cruise lines lose millions of dollars to European flooding

By Michelle Baran
A photo of Passau, Germany, from last week shows that while waters remain high, streets are drying up.River cruise lines last week began to unravel the tangle of dozens of canceled cruises and hundreds of rebookings and refunds they have had to issue in the wake of some of the worst flooding in Central Europe in decades.

The lines also started to take stock of the millions of dollars in losses they incurred as a result of the flooding.

An uncharacteristic level of rainfall at the start of June caused water levels to surge throughout parts of Germany, the Czech Republic, Slovakia, Hungary and Poland.

The rains forced local populations to evacuate, threatened to submerge cities and created a logistical nightmare for river cruise lines that were forced to cancel cruises and alter itineraries along the Main and Danube rivers as well as along the Main-Danube Canal.

“This is the worst flooding that we have experienced in the 20 years we have been operating river cruises,” said Guy Young, president of Uniworld Boutique River Cruise Collection. “This historical flood and the impact on our cruises has certainly been an anomaly.”

Young estimated that Uniworld will be forced to write off more than $5 million in lost revenue due to the flooding, which he said affected seven Uniworld vessels and 16 departures, with five cruises having to be canceled.

The challenge has been not just dealing with the constantly changing situation on the rivers and the affected vessels and passengers but also with the financial fallout of having to re-accommodate and rebook hundreds of passengers while also offering them refunds and future cruise credits.

As of June 13, Avalon Waterways had canceled eight departures since June 1 and made several additional itinerary changes. Most of Avalon’s European fleet was affected in some way by the flooding, which in turn had an impact on approximately 1,000 Avalon travelers at the height of the flooding, according to Patrick Clark, Avalon’s managing director.

But that’s just the start of the problem. Not only are canceled cruise departures lost revenue (affected passengers were offered a full refund), but all the river cruise lines are offering passengers additional compensation, generally in the form of a $500 future cruise credit.

For cruises that were not canceled but sailed an altered itinerary, the company had to either add more land arrangements or swap in accessible sites for destinations made unreachable by high waters. River cruise companies have said they offered some measure of compensation for passengers on altered itineraries.

Avalon also offered to cover passengers’ air change fees and said it was protecting agents’ 10% commission on the canceled cruises as well as full commissions on re-bookings.

“The accounting is the last piece of our puzzle,” said Clark.

“Our approach is to make the right decision for customers,” he added. “If we made those decisions well, we know that the customers and their agents will come back to us.”

Since Viking River Cruises has the most river cruise ships sailing Europe’s inland waterways, the flooding also caused it to do the most juggling. As of late last week, the company had canceled 13 sailings and modified 25 itineraries.

“There is a financial impact anytime we have to cancel a sailing,” Richard Marnell, senior vice president of marketing at Viking, wrote in an email. “With the 2013 season nearly sold out and vibrant sales already for the 2014 season, Viking’s breadth provides the ability to withstand such an impact.”

Viking might be able to withstand the financial impact, but Marnell’s statement indicates another dilemma: where to put all these passengers who now need to rebook their river cruise.

“The biggest challenge will be re-accommodating passengers on a similar cruise this sailing season,” he said. “We’ve experienced such high demand for the 2013 sailing season that we may not be able to reschedule passengers until November or December, or even until the 2014 season.” He added that for affected passengers, 2014 itineraries will be protected at 2013 prices.

Tauck, too, was concerned about lack of available inventory to re-accommodate affected passengers, according to Tom Armstrong, Tauck’s corporate communications manager. Tauck has canceled five cruises on two ships, which affected approximately 450 passengers.

With hundreds, perhaps thousands, of passengers on the prowl for a new river cruise to take, it’s no wonder that river cruise line A-Rosa, based in Rostock, Germany, sent an email to the trade last week offering up its product as an alternative.

“Some may view it skeptically when a vendor offers assistance, as it may be interpreted as capitalizing on the misfortune of others,” David Morris, president of David Morris International, which represents A-Rosa in North America, wrote in an email. “That being said, one primary reason for sending this is that most river boats this summer in Europe are completely sold out, leaving your clients with little or no alternatives.”

Consequently, A-Rosa is offering river cruise passengers displaced by the floods preferential fares on several departures, is waiving single supplements and is offering a $500-per-cabin credit on any 2014 A-Rosa sailing.

“We sincerely hope that your clients are minimally affected by the current floods and hope you can find suitable alternative plans with the river boat company you booked originally,” Morris wrote. “If you cannot, we are here to help.”

As the flooding appeared to slowly recede last week, the devastated areas of Central Europe have begun planning recovery. At least 21 people were killed in the floods, according to news reports, and the economic toll of the deluge in Germany alone is likely to reach about $16 billion, according to global rating agency Fitch Ratings.

As the cities along the rivers begin to rebuild, the river cruise companies are declaring that the worst is over. At press time, Viking had estimated that most cruises would sail with minimal impact beginning June 15 and expected all cruises after June 21 to operate normally. Avalon, too, said sailings over the next few weeks should see minimal impact.

“The floodwaters have been receding rapidly,” reported Rudi Schreiner, president of AmaWaterways, which did not cancel any sailings but saw seven ships and 14 departures affected by the floods.

Schreiner, too, estimated that water levels and cruises should return to normal within the next week.