Norwegian to auction cabin upgrades

Posted on 21 January, 2017 by Spacejunkie2

Haven Suite photo by Dave Jones

Borrowing a page from Priceline, Norwegian Cruise Line said it will allow select passengers to bid on cabin upgrades prior to sailing but after making final payment.

The process would let passengers upgrade one or two meta-categories. So for example, a guest in an oceanview cabin could bid to move to a balcony or mini-suite, but not a suite.

Norwegian said passengers eligible would be notified by email, as will their travel sellers. Selection is based on a variety of criteria including but not limited to what guests already paid and the type of cabins available on their sailing.

After bidding a “nominal” amount, guests will be notified with an immediate confirmation email of a winning bid. If a bid has not been accepted, guests can improve it or cancel it up to 48 hours prior to departure.

Travel agents are only notified of winning bids, and are eligible for additional commission on the upgraded fare. They will get incremental commission due in a separate commission payment, Norwegian said.

Norwegian is not taking bids on identifiable cabins or specific categories, but only at the meta-category level. Guests eligible to bid on suites or The Haven will be able to bid on each separately.

Norwegian did not say if minimum bids would be set.

The program, called Upgrade Advantage, is scheduled to start Feb. 8 on the Norwegian Escape, Getaway, Breakaway, Epic and Pride of America, with the remaining fleet set to begin participating in the second quarter.

Agencies are allowed to opt out of eligibility by sending an e-mail to NCL sales.

In a note to agents, Norwegian senior vice president of sales Camille Olivere said a pilot program tested very well with guests and agents.

“I highly recommend that you participate in this program,” Olivere wrote. “Upgrade Advantage is a great way for you to enhance the guest experience and earn more commission with very minimal effort.”

Currently, Norwegian offers upgrades through an Upsell Department, which identifies sailings with potential for upgrades and emails guests, who can then call in and bid on upgrades.

“This new system will be completely automated and allow for a level playing field where all guests can easily bid for an upgrade simply by clicking through,” Norwegian spokeswoman Christina Baez said. “It also notifies the travel partner who made the booking and automatically provides them with the commission on the higher fare if their bid is accepted.”

Is a shipbuilding duopoly good for the cruise industry?

Posted on 16 January, 2017 by Spacejunkie2

In the modern facilities, the most technologically sophisticated cruise ships are being built.

Before the end of 2017, it looks like there will be a worldwide duopoly in the business of building cruise ships. Can this be good for cruise lines, their customers or travel agents?

It would come about if Italy’s Fincantieri buys the French shipyard in Saint-Nazaire where Royal Caribbean International’s Harmony of the Seas, and a string of other ships, have been built. (Fincantieri won’t buy all of the Saint-Nazaire yard. The French government will hold onto a one-third stake.)

The yard is currently operating under the name STX France, but the STX parent company, based in Korea, has been trying to sell it to consolidate its way out of financial trouble.

A South Korean court recently approved Fincantieri as the approved bidder.

STX already sold its yard in Turku, Finland, to Germany’s Meyer Werft, the other big name in cruise ship building. Together, Fincantieri and Meyer Werft would dominate cruise shipbuilding the way Boeing and Airbus control the world’s output of commercial jetliners. (Fincantieri has built almost all of the recent Carnival Corp. brand vessels while Meyer Werft has delivered most of Norwegian Cruise Line’s latest ships, among others).

The business of building jets and cruise ships is similar. Both are capital intensive businesses, with a need for specialized labor and a network of subcontractors. Both are subject to wicked swings in the business cycle that can leave them with either more work than they can handle or none at all.

Big cruise lines spend billions of dollars annually on new ships. Yet it is telling that there were no bidders other than Fincantieri for the French yard. It is a very specialized and risky business.

Does it matter to the cruise lines that there are only two suppliers left to do business with? It doesn’t seem to matter much to the airlines, who haven’t been cornered by the Airbus-Boeing duopoly. One difference may be that there are dozens of customers for the plane makers, but less than a dozen for cruise yards.

Fincantieri’s yard in Trieste. Credit: Fincantieri

One well-informed source in the industry rated Fincantieri’s takeover of STX France as “neutral to slightly negative” for cruise operators. The reduction in negotiating partners is a negative, while the stability of having the yard in the hands of a familiar, known entity somewhat offsets that.

There are some other players in the shipbuilding game. Genting Hong Kong bought several German yards, which will build the future ocean and river ships for Crystal Cruises, the line Genting acquired in 2015, and the Chinese government, which has partnered with Fincantieri to begin building ships in China.

Neither poses much of a current threat to the duopoly. So for the foreseeable future, if you want to build a big cruise ship, the choices are Meyer Werft or Fincantieri.

Let’s hope it doesn’t mean anything negative for the cruise lines or their travel partners.

Short windows limit marketing of Cuba cruises

Posted on 15 January, 2017 by Spacejunkie2

Royal Caribbean’s Empress of the Seas is scheduled to sail to Cuba from Miami on April 19, then move to Tampa for its next two Cuba departures.

Travel agents have begun selling cruises to Cuba set to sail in the first half of 2017, but some said the limited number of itineraries approved so far by the Cuban government makes it hard for them to justify a marketing campaign.

Royal Caribbean International has three cruises to Havana firmly scheduled, while Norwegian Cruise Line has five.

“There’s definite interest in it, but it’s not something that as of yet is a hot seller,” said John Rice, president of Vacation Tour and Cruise in Tampa. “We have a lot of people asking about it. We’ve only done a couple of [sales] at this point in time.”

While six brands were authorized in December to carry passengers on a handful of cruises to Cuba, no U.S. cruise line has permission to sail there after the end of May, although most have applied.

And in the U.S., the volatile politics of rapprochement with Cuba could very well signal an end to relaxed travel rules with the change in administrations this month.

That uncertainty is hampering what otherwise might have been a great new market for agents, Rice said.

“Right now, our big problem is we have absolutely no idea what the future will hold,” Rice said. “My senator [Florida Republican Marco Rubio] is against this continuing. We’ve heard negative comments about the program from [president-elect Donald] Trump when he was running.”

The latest opening for passengers interested in cruising to Cuba came Dec. 9, when the country approved a number of new entrants, including Oceania Cruises, Regent Seven Seas Cruises, Azamara Club Cruises and Pearl Seas Cruises.

Image result for cruise to cuba

One of the Norwegian Cruise itineraries

All those companies have opened sales and set dates for at least one cruise, offering consumers a variety of price points, cruise lengths and luxury levels for a U.S. departure that includes Cuba.

In the contemporary segment, the entrants are Royal Caribbean and Norwegian Cruise Line. Royal Caribbean’s Empress of the Seas has a five-day Cuba cruise scheduled to depart Miami on April 19, along with a seven-day cruise from Tampa departing April 30 and a five-day cruise from Tampa leaving May 20.

Rice said he is offering the five-day Tampa cruise at a lead-in price of $608 per person.

Norwegian Cruise Line has four-day cruises on the Norwegian Sky departing Miami every Monday in May that include an overnight in Havana and a stop at Great Stirrup Cay. Prices for inside cabins start at $699.

Cheryl Scavron, an agent at Dream Vacations in Pompano Beach, Fla., said the prices can seem expensive relative to a typical Caribbean cruise.

“People from here, it’s in their minds that Cuba is 90 miles away; it shouldn’t cost me that much to go there. They think about it as another Caribbean island,” Scavron said.

Frank Del Rio, president of Norwegian Cruise Line Holdings, said in a recent conference call that the Cuba cruises would be priced at a premium because of their relative scarcity and pent-up demand.

Scavron said another hindrance is Royal Caribbean’s decision to have just one cruise to Cuba from Miami before repositioning the ship to Tampa for the summer.

“People in this area, from Palm Beach and Broward counties, they don’t want to drive to Miami, let alone Tampa,” Scavron said. “I have a few of them booked on the inaugural sailing in April, but I was hoping we would be able to do more sailings from here.”

“People from here, it’s in their minds that Cuba is 90 miles away; it shouldn’t cost me that much to go there.” — Cheryl Scavron, Dream Vacations, Pompano Beach, Fla.

Several cruises departing Miami for Cuba are scheduled by lines in the upper-premium segment, offering smaller ships and more luxury than the 1,602-passenger Empress and the 2,004-passenger Norwegian Sky.

Azamara Club Cruises will include an overnight in Havana on a 12-day Azamara Quest departure from Miami on March 21. Prices start at $2,799. And Oceania Cruises will spend from 8 a.m. to 11 p.m. in Havana on March 9 as part of a 14-day cruise on its Marina ship, with prices starting at $3,199.

The Marina has two subsequent 10-day cruises that include overnight stays in Havana.

Luxury operator Regent Seven Seas also has departures from Miami scheduled on April 11 and 18 that will include an overnight stay in Havana. Prices for the seven-night cruises start at $2,999 per person.

Bill Schneider, owner of a Dream Vacations franchise in Tampa, said he has one client in particular who has been waiting for a newer, more luxurious ship such as the Seven Seas Mariner to book his initial cruise to Cuba.

“Regent is the way I’m pushing him,” Schneider said.

He said that the Empress of the Seas sailings haven’t drawn any calls.

“It really hasn’t been promoted that heavily that they’re coming, at least in the local market,” Schneider said. “As New Year’s comes, it’s definitely going to be one of my featured sailings.”

The Empress Cuba sailings opened for booking on Dec. 9 and have been selling extremely well, said Lyan Sierra-Caro, a corporate communications manager at Royal.

Only one line is offering ports other than Havana initially. Pearl Seas Cruises has a series of 11 10-day sailings from Fort Lauderdale starting Jan. 17 on its 200-passenger Pearl Mist coastal cruiser that will visit seven ports on the island, including Havana, Cienfuegos, Trinidad and Santiago de Cuba. The cruises end in April.

Carnival Corp.’s Fathom brand won permission to visit Santiago de Cuba as a port call on six sailings to the Dominican Republic this winter on the Adonia. In addition, the 704-passenger Adonia continues to sail every other week to Cuba, but those cruises, like the others, end after May.

Rice of Vacation Tour and Cruise said agents can only hope that more approvals are forthcoming after that.

“I think everybody’s trying to move the ball forward, hoping that it helps us to try to get the program going,” Rice said. “As a Floridian, it’s something I’ve been supportive of for years. As an agency owner, it’s just tough to operate in an environment where you don’t know what the future’s going to hold.”