Focus on Cruising: It’s showtime at the inaugural

By Tom Stieghorst

Star turns on the river

Competition among river cruise lines is as fierce as ever, and this spring’s christening season was no exception, as river cruise companies rolled out the red carpet and even broke a world record. Read more.

It takes a village to name a cruise ship these days.

Last month, thousands of people came aboard the Norwegian Breakaway to participate in its christening at New York’s Pier 88.

Among them were 400 Cruise Planners franchisees. Company COO Vicky Garcia said the agents were among the first to get a glimpse of the ship’s new features.

“It’s almost like a restaurant,” she said. “Once you can taste it, you can sell it.”

Norwegian BreakawayThe invitation to go to a christening or a preview cruise is one that is coveted by many cruise fans. But the guest list is carefully curated.

Cruise lines are trying to get maximum impact from the introduction of assets that need the best start out of the blocks that management can provide. So they use naming ceremonies to forge deeper relationships with key groups that can make ships a success.

The groups range from travel sellers, the media and influential past passengers to charities, boards of directors, shipyard owners and investment analysts. All have a part in stoking the buzz.

Similar crowds converge on other ships at other ports around the world. In March, some 10,000 people took part in dedicating the MSC Preziosa in Genoa, Italy, where the whole city was feted.

In May, Hapag Lloyd Cruises named the Europa 2 in Hamburg, Germany, beneath a canopy of fireworks. And Princess Cruises will have royalty to draw attention to its Royal Princess debut in Southampton, England, later this month.

Of the half-dozen ships to be launched in 2013, the Breakaway commanded highest interest with U.S. travel agents, because it was the only one to be christened on this side of the Atlantic.

The ship drew big delegations from Avoya Travel, American Express, Travel Leaders Group and the luxury consortium Virtuoso, in addition to Cruise Planners, which held a national conference in New York to capitalize on the Breakaway inaugural.

Norwegian took full advantage of their presence. After a night of partying, agents had daytime training sessions to learn more about group sales opportunities, shore excursions and Norwegian’s overall strategy.

Hapag Lloyd Europa 2In back-to-back sessions held in the Breakaway’s comedy club, Norwegian sales executives Andy Stuart and Camille Olivere went through the same points over and over.

Some of it was numbers: 27 dining opportunities on the ship; 11 free and 16 premium. Some was shaping perceptions and reminding agents of Norwegian’s “Partners First” pledge.

Some of it was surprisingly candid. After describing the new salt treatment room in the Breakaway’s spa, Stuart said, “I don’t really get it, but it’s supposed to be really cool.”

Olivere offered some behind-the-scenes strategy. For example, Norwegian no longer gives a flute of Champagne to each boarding guest, she said, because the same people serving drinks also clean cabins, and guests said it was more important to have their cabin ready when they arrive.

Agents filed out ready to sell not only the Breakaway but its sister ship the Getaway, due in Miami in January. Those on the inaugural cruise will get a $50 bonus commission for each Getaway booking.

Later, the same basic presentation was given in the ship’s theater to the several hundred Avoya agents onboard.

Olivere urged them to be hands-on while they have the chance. “There are things you want to try out, or at least watch someone try out, so you can speak about it more passionately,” she said.

Jeff Anderson, vice president of marketing for Avoya, said being able to sell with emotion was one of the best reasons for agents to participate in a christening and inaugural cruise.

Pride Of Hawaii christening“There’s nothing like a firsthand experience,” he said. Anderson said both Avoya and Norwegian recognize that when agents go on an inaugural cruise, their sales for the ship rise.

“We produce more when we’re on it,” he said.

Although agents got some classroom time, including a session with Norwegian’s top training expert, Bob Becker, most of the time spent on the ship was theirs to enjoy.

“They really want you to play while you’re onboard and put yourself in the customer’s shoes,” Anderson said.

A hefty percentage of the agents onboard hailed from the New York area, both because it was an easy cruise to reach and also because their clients are the big target market.

Staten Islanders Tina and Michael Meeks checked out the bowling match on Deck 7, a sort of half-scale version of the full bowling alleys on some earlier Norwegian ships.

Tina, a Cruise Planners franchisee, said she was very impressed with the indoor-outdoor seating arrangement in the Waterfront, which has a number of specialty dining outlets with water views.

“It’s a big draw for all my clients,” she said of the New York-based ship.

Todd Elliott, president of Cruise Vacation Outlet in Orlando, rises early to prowl the decks. When they’re largely empty, he can notice details he might otherwise miss, Elliott said.

“I get a feeling for the ship overall. If you’re one of the first of a handful to see the ship, it’s a leg up on your competition,” he said. He also said preview cruises give agents access to senior executives.

“They’re very approachable,” he said.

Making the rounds

While Stuart and Olivere were busy with agents, Norwegian CEO Kevin Sheehan was flitting from room to room addressing other constituencies.

Seven Seas Voyager christeningHe attended a board meeting. He held a press conference. He even found time to haggle with Bernard Meyer, CEO of Meyer Werft, the builder of the Norwegian Breakaway, over some expenses for the Getaway now under construction back in Germany.

Well before the inaugural, Sheehan had been hustling. As a newly public company, Norwegian Cruise Line Holdings Ltd. had released quarterly results two days ahead of the christening.

That gave the line an opening to invite finance channel CNBC aboard, and correspondent Simon Hobbes did a three-minute interview with Sheehan staged in front of the ship’s colorful waterslides.

CNN and Telemundo were among other media to do features on the Breakaway, amplifying its profile and providing a positive image for the industry that earlier CNN coverage of the Carnival Triumph mishap did not.

By that point, Sheehan had been on the ship almost continuously since it left the Meyer Werft yard two weeks earlier.

At a stop in Southampton, he entertained more than 5,000 European travel agents in several days of preview activities.

By holding a fundraiser there for British charity Just a Drop, which delivers clean water to communities in developing nations, Norwegian promoted another group that has the potential to generate positive word of mouth for its newbuild.

Pledging one British pound for each agent attending the event, Norwegian raised at least 3,000 pounds (about $4,600) to help build projects in African villages to provide clean drinking water.

After arriving in New York, Sheehan saluted his new shareholders and welcomed his directors so they could see if the company’s money had been well spent on the $840 million ship.

Holland America Line Rotterdam and Oosterdam christeningBoard member Adam Aron sounded convinced. A former CEO of Norwegian himself, Aron said he had high expectations when he saw the design for the Waterfront area.

Onboard, Aron said his vision had been realized. “It’s as good as I hoped it would be,” he said.

Aron said holding a board meeting during the inaugural helps directors stay in touch with Norwegian’s product, customers and distributors and leads to a better-run company.

Christenings have changed since Norwegian launched the modern cruise industry in 1966. In the early days, they were attended by owners and some guest VIPs, and were generally done at the shipyard.

Now lines often wait until ships reach their homeports for a christening. The former Carnival Destiny began sailing the Med under a new name last month after a $155 million makeover, but it won’t be formally dubbed the Carnival Sunshine until it reaches the U.S. in November.

Christenings often leverage the star power of a celebrity godmother to gain a broader audience. Duchess of Cambridge Kate Middleton will do the honors for the Royal Princess, the highlight of six days of inaugural activities expected to involve 10,000 people.

Preziosa christening with Sophia LorenWhen MSC Cruises named its 4,000-passenger MSC Preziosa in March, it drew on longtime brand icon Sophia Loren — as it had for all its recent naming ceremonies — to glamorize the occasion. MSC involved the city of Genoa with comedians staging a shore-side performance and a laser show at a famous lighthouse.

It also organized a “flash mob” salute on two other MSC ships in port, in which passengers received special lamps and instructions on how to participate in a nocturnal sound-and-light tribute.

The Norwegian Breakaway’s christening was unusual in that most of the ceremony took place inside the ship, rather than dockside. While the center ring was the ship’s main theater, guests could watch from nine other venues around the ship linked in a TV simulcast.

The action bounced around the ship, one moment at a Broadway dance number in the Manhattan Room, then to the Atrium Bar and Cafe to see Nickelodeon characters, then over to “Cake Boss” Buddy Valastro introducing his confectioneries to the crowd.

That way, even day guests could sample the full spectrum of the Breakaway’s amenities.

To further extend the reach of the ceremony, Norwegian prodded attendees to tweet, post Facebook updates and use other apps to rope their social networks into the event.

Norwegian said more than 429,755 Facebook visits were generated over a five-day stretch by inaugural guests using the ship’s WiFi and broadband connections.

Cunard Queen Mary 2 and Queen Elizabeth 2 in NYCAfter an hour of highlights around the ship, the focus returned to the Breakaway Theater, where the ship’s godmothers, the Radio City Music Hall Rockettes, did their signature kick line.

“Show-stopping crowd-pleasers for more than eight decades,” according to their introduction, members of the dance troupe will be on the first month’s worth of sailings and the first sailing of each month after that.

One of the 13 dancers stepped forward, cut a ribbon and the video monitor flashed to an exterior shot of a Champagne bottle crashing against the Breakaway’s Peter Max-painted hull.

“We bless this ship and all who sail on her,” the Rockette said, and the Breakaway took its place among Norwegian ships past and present, officially becoming part of the fleet.

Christen me, Kate

Royal Princess under constructionThe cruise industry’s next big inaugural takes place in England this month, where Princess Cruises will enlist the help of Duchess of Cambridge Kate Middleton to christen the $735 million Royal Princess.

Ten days of festivities will include ship tours, luncheons, a travel agent overnight, a pre-naming gala event, two two-day preview cruises and a plaque and key ceremony with the port of Southampton.

More than 10,000 people are expected to experience the ship in that time, according to Princess.

The visitors will run the gamut: past passengers, U.K. travel agents, Princess general sales managers and management from shipbuilder Fincantieri to international dignitaries, Carnival Corp. executives, investment bankers and analysts, and employees from Princess Cruises and Carnival U.K. offices.

Three charities — East Anglia Children’s Hospices, Well Child and Skills Force — will each be given 100 tickets to sell to the gala overnight and naming ceremony, with each charity keeping the proceeds.

Snagging Middleton as the ship’s godmother will assure massive coverage in the U.K. media and likely boost the number of reporters, photographers and news crews expected to attend from outside the U.K.

“We are delighted that the duchess will launch our new ship and can think of no better way to celebrate our company’s British heritage and our commitment to the country,” said Princess CEO Alan Buckelew.

In contrast with the Breakaway, the Royal Princess ceremony will be held quayside and observe traditional British protocol, including a performance by the Royal Marines Band and the pipers of the Irish Guards.

British singer Natasha Bedingfield will also perform, lending a contemporary touch.

The June 13 christening in Europe will help Royal Princess get off to a good start in the Mediterranean, where it will be offering a series of nine 12-day sailings between Barcelona and Venice this summer.

Then, when Royal Princess crosses to Fort Lauderdale in October for its winter season in the Caribbean, there will be another two-night preview cruise to introduce it to travel agents and press in the U.S.

The 3,600-passenger Royal Princess becomes the third vessel to be christened under that name for Princess Cruises, preceded in 1984 by a ship that was the line’s first purpose-built cruise ship, and in 2007 by a ship Princess acquired from defunct Renaissance Cruises. Both now sail under new names for P&O Cruises. — T.S.

The construction of MSC Cruises

The construction of MSC Cruises

By Tom Stieghorst

TInsighthe retirement of MSC Melody underscores one of the most remarkable transformations in the cruise business.

Starting at the back of the field, MSC Cruises has become a competitive force by spending massively on new ships.

When the Melody began sailing for the line in 1995, it was state-of-the-art for MSC, even though it was already 13 years old.  The Melody’s main virtue was that it was newer than MSC’s other ships, the Rhapsody (1977) and the Monterey (1952).

With a small pool, no balconies and cramped public spaces, it arrived at Port Everglades about the time that Princess Cruises was designing the 3,100-passenger Caribbean Princess.TomStieghorst

MSC’s parent company, Mediterranean Shipping Co., is huge in the container shipping business but was just a tiny player in the cruise sector.  It recognized it would have to either commit in a big way to cruising or get out.

In 2003, it began planning for the $275 million Lyrica, and in 2004 it moved its U.S. headquarters from New Jersey to Fort Lauderdale to be closer to the pulse of the industry.

The 1,580-passenger Lyrica was MSC’s first new-out-of the-box ship. It wasn’t the biggest ship in the Caribbean, but it was big enough and, more importantly, new enough, to command a decent price.  At the same time, an 11-night cruise at $999 was enough of a bargain to fill easily.

From there, it went on to build the Opera, and to acquire the Armonia and Sinfonia from the now-defunct Festival Cruises. MSC now has 11 ships, with an average age of a little over five years, going from perhaps the oldest fleet in the industry to the youngest in two decades.

The 30-year-old Melody has reached the end of its useful life at MSC. In a few months MSC will take delivery of Preziosa, which at 139,400 gross tons is at the upper end of the size spectrum for any cruise company. The exit of one and the entrance of the other shows how far MSC has come.

It will be interesting to see what the next 20 years hold.

Preview 2013: Cruise

Preview 2013: Cruise

By Tom Stieghorst
Preview 2013As 2013 arrives, the cruise industry can only pray that there is no repeat of the signature event of 2012.

A year ago, travelers seemed ready to pay higher prices for cruises. Then the Costa Concordia accident happened, casting a pall over cruising that lasted for a good part of the year.

Looking at next year, Micky Arison, chairman of Carnival Corp., which owns Costa Cruises, said in September that prices are generally well positioned to reach parity with 2011 by Q2 2013.

However, for the Costa line in particular, “to climb back to where things were before will take a couple of years beyond 2013,” Arison said.

In some markets, there are signs that next year will be more normal. Starting in January, Norwegian Cruise Line is hiking prices 10% on its Pride of America ship in Hawaii.

Alaska will continue to regain capacity in 2013 that was lost to the ill-conceived passenger head tax several years ago. But trouble looms in 2015 with a tighter standard for low-sulfur fuel, though some breathing room remains for reaching a regulatory compromise.

The biggest unknown hanging over the industry for 2013 is Europe, both as a source of passengers and as a draw for North Americans faced with continued high airfares.

At Royal Caribbean Cruises Ltd., capacity for 2013 is down 20% in the Western Mediterranean and 9% in the Eastern Mediterranean.

“The European market continues to be the most puzzling market we’re facing,” said RCCL Vice Chairman Brian Rice.

Closer to home, cruise lines continue to bring more ships to within driving distance of their customers. Princess Cruises in 2013 will operate a ship year-round from San Francisco, giving the Bay Area drive-market itineraries to Alaska, Hawaii and coastal California.

Disney Cruise Line will offer a full year of cruising from Galveston, Texas, another popular drive market, while Norwegian, Carnival Cruise Lines and Holland America Line will all operate additional cruises from Boston.

NCL BreakawayBut the port with the biggest potential increase in passengers next year is New York, which stands to gain 4,000 passengers a week starting in May with the introduction of the $840 million Norwegian Breakaway.

The Breakaway is staking its claim to New York-area loyalists with a ship that boasts Sabrett hot dog carts and Brooklyn Brewery beer among its food offerings. Five water slides, a two-story spa and Norwegian’s first seafood restaurant are some of the Breakaway’s other attractions.

Another big debut will take place across the pond next year with the delivery of the Royal Princess, the first new ship for Princess in nearly five years. The 3,600-passenger ship will do 12-day Mediterranean cruises before repositioning in October to the Caribbean. Among its noteworthy features will be a cantilevered, glass-enclosed skywalk that extends 28 feet beyond the ship’s edge.

MSC Cruises also has an entrant in the newbuild derby, the $742 million Preziosa, which will boast a 394-foot water slide, the world’s longest at sea.

Carnival Cruise Lines in 2013 will take the wraps off the largest ship makeover in its history when it refits the 17-year-old Carnival Destiny in a 49-day drydock. When it emerges in April, the vessel will sail under a new name, the Carnival Sunshine, and with a slew of new features.

The $155 million transformation will add part of a new deck and expand two others, giving the ship a new layout.

Another 182 cabins will be added to the ship, along with new restaurants, more sports activities and a three-story, adults-only Serenity space.

The Sunshine is emblematic of the trend toward reusing and upgrading older ships rather than ordering new ones. Cruise executives say they want to add new ships in a more measured way than in the past to avoid excess capacity, which dilutes cruise pricing.

They are putting capital into retrofitting older ships with features from newer ones to give them a contemporary feel.

Another example is the Royal Advantage program under way at Royal Caribbean International, which is spending $500 million to modernize 11 ships.

Due for a makeover in 2013 are the Legend, Brilliance, Independence, Vision and Navigator of the Seas, which range in age from 5 to 18 years old.

Prominent among the additional features will be specialty restaurants that boost onboard spending, but the whole package should enable Royal, and agents, to tout new amenities that command better prices.

Deployments in 2013 will feature more cruise segments that can be combined into longer voyages. Celebrity Cruises, for example, will offer more short cruises in Europe that can be paired with a second short cruise with a different set of port calls.

“We want to have more seven-day itineraries for that family or couple who can’t get away for a long time,” said Dondra Ritzenthaler, senior vice president of sales at Celebrity.

Luxury lines, as always, will be focused in 2013 on destination development. Azamara Club Cruises will offer a night excursion with each cruise after its two ships come out of drydock early next year.

Another trend is a tighter watch on rebating, which makes for an uneven playing field among agents. Silversea Cruises cracked down on client poaching by saying that agents who rebook a client more than 30 days after they have already booked with a different agent will not receive a commission.

Whatever actions cruise lines take to improve their prospects, some of the key ingredients to prosperity remain beyond their control.

The wild card factors of the economy, oil prices and geopolitical stability can upend any strategy the industry has conceived.

That said, economic trends seem favorable going into 2013.

The wealth effect from a rising stock market could drive a more robust Wave season early in the year. At about $90 a barrel, oil prices were off their March high of $110 a barrel. And U.S. unemployment fell to 7.7% in November, meaning more consumers would be getting a paycheck to spend on vacations.

Although the jobless rate remains high, travel agent Grace Dieleman, owner of Vellinga’s Travel Service in Chatham, Ontario, said that inverting the equation gives 2013 a rosier hue.

“You always hear about 10% unemployment,” Dieleman said, “but that also means that 90% of the population is still working.”