Oceania Cruises is consolidating and expanding its early booking incentives programs under a new name, O Life Advantage. “The O Life Advantage is a dramatic shift in the way to go to market,” said Jason Montague, Oceania’s president and CEO.Oceania has previously had incentives to encourage early bookings at favorable prices, but some sailings were excluded and programs varied in exact benefits, Montague said.
Jason Montague
The new, streamlined program is being offered on the 2016 summer season on veranda cabins and above for bookings made by Sept. 30.In addition to being more comprehensive, the O Life package of incentives includes a more robust offering of free shore excursions. O Life provides three free excursions per person on sailings up to nine days, four free excursions on journeys of between 10 and 13 days, and five free excursions on itineraries of 14 days or more.Prepaid gratuities and complimentary Internet are also part of the offer.Montague said bookings for the summer 2016 season opened in March. With the addition of O Life benefits starting July 6, prices will rise about $300 per person, he said.Guests who are already booked and who qualify for O Life benefits can either rebook at the higher rate or stick with the more basic cruise, he said.Montague said agents will benefit from selling the more-inclusive O Life program because more of what would be onboard spending is bundled into Oceania’s commissionable fare“It gives them the ability to earn commissions on a good price point,” Montague said.
The details will also be easier to remember than the current lineup of incentive programs, he said.
Perhaps no company has had more revolution in the top management than Norwegian Cruise Line, which has had to structure new roles for executives following the $3.03 billion acquisition of Prestige Cruise Holdings and its two brands, Oceania Cruises and Regent Seven Seas Cruises.
Closing the deal in November set off a cascade of changes that began with a new corporate structure under a parent company, Norwegian Cruise Line Holdings (NCLH).
Next, Prestige President Kunal Kamlani resigned, followed two months later by NCLH CEO Kevin Sheehan.
With former Prestige Chairman and CEO Frank Del Rio stepping up to take Sheehan’s place, openings were created for Stuart, 51, and Montague, 41, to step into brand president roles.
Stuart, a 27-year Norwegian Cruise Line veteran with a long history on the sales side of the company, said in an interview after being promoted that he would continue to be more involved in sales than the average brand president.
“The key part of this role really is driving demand for the brand,” Stuart said. “I’m going to be very, very involved with travel partners.”
For their part, travel agents are thrilled to have Stuart in such a high-profile role because, said Signature’s Sharpe, they credit him with the line’s “Partners First” initiative and its support for the agent distribution channel.
“I keep getting members calling me,” Sharpe said. “They’re so happy for him and for us.”
Only time will tell whether all the change at the top is ultimately good for the cruise industry and travel retailers. But like Sharpe, Wall is optimistic that the positive energy of new blood will outweigh the loss of experience and institutional memory at some lines.
“It’s easy to have tunnel vision and automatically assume the way to go is the way it’s always been,” Wall said.
Coggins, too, said that on balance the changes are positive.
“If you bring someone in from another industry, they come with fresh ideas,” Coggins said. “They bring the perspective that will help attract the first-time cruiser.”
Fans of Norwegian Cruise Line may notice more international passengers on the ships in coming years, and certainly will see more Canadians, newly named CEO Frank Del Rio said.”We think there’s a lot of opportunity — relatively low-hanging fruit — to expand Norwegian internationally,” Del Rio said in his first call with Wall Street analysts as president and CEO of Norwegian Cruise Line Holdings.
Frank Del Rio
Del Rio was promoted in mid-January from his role as president and CEO of Norwegian’s Prestige Cruise subsidiary, the parent company to Oceania Cruises and Regent Seven Seas Cruises.
He told analysts that if Norwegian sourced passengers internationally at the same rate as the Prestige brands, it would mean an extra 210,000 passengers a year — enough to fill a whole new ship.
Canada alone would account for 100,000 of those passengers. “The big opportunity is outside the U.S., especially in Canada,” Del Rio said.
As part of Norwegian’s recently announced 40% expansion of its sales force, it is beefing up its presence in Canada and has created a director of sales position for that country.
He said Norwegian is trying to find travel agents that have “gaps” in their sales of one of the company’s brands, adding that often agents selling Oceania and Regent in Canada don’t sell Norwegian.
He also said that he considers Norwegian’s relations with travel agents in no need of mending. “Andy Stuart [executive vice president of global sales and passenger services] and his team are liked — loved if you will — by the agent community. They know him well,” Del Rio said.
In the call, new Prestige President Jason Montague said there was a notable pause in bookings for the two Prestige brands when it was announced that Norwegian would be buying them, but he said reservations picked up after Del Rio was named to succeed Kevin Sheehan as CEO of Norwegian.
Del Rio said Wave season had been on pace until about three weeks ago when bookings accelerated. He said it wasn’t one reason but pointed to Norwegian’s promotional offers as a factor.
Cruise line stocks all rose on the strength of Del Rio’s comment about Wave season.
Del Rio said in general the strategic direction set by Sheehan would continue. “I know that some of you are expecting some sort of revolutionary announcement regarding Norwegian’s future,” he said.
“But it is simply too early in the game to make any definitive declarations about expanding into new markets, ordering new ships or any other major strategic announcement,” he said. “These things may happen in time, but if they do happen it will be after intense study and careful consideration.”
On the call, Del Rio said net income in 2014 solidly improved, rising to $338.4 million, from $101.7 million, despite a fourth-quarter loss of $25.6 million due to financing costs of the Prestige acquisition.
Revenue expanded to $3.13 billion, from $2.75 billion.
Del Rio noted that Prestige has a “market to fill” philosophy rather than the “discount to fill” model, and said that while he wouldn’t take an identical approach at Norwegian, the value-add concept is “worth pursuing.”
He also said the percentage of air/sea purchases at Norwegian is less than 2%, while it is almost 100% at Prestige with its “free air” value promotions, and that in the future Norwegian could have higher air sales as itineraries diversify.
Prestige is already providing the holding company with diversification into higher yielding markets, Del Rio said.
For 2015, deployment companywide in Asia, the South Pacific and Africa will be 3.3%, up from negligible in 2014. Likewise, deployment in South America will go from zero to 1.6% of capacity.
In the Caribbean, the company expects to deploy 40.4% of its overall capacity, down from 47.9% last year. For the Norwegian brand only, Caribbean capacity will be 45.5% in 2015.
For their part, travel agents are thrilled to have Stuart in such a high-profile role because, said Signature’s Sharpe, they credit him with the line’s “Partners First” initiative and its support for the agent distribution channel.
Del Rio said Wave season had been on pace until about three weeks ago when bookings accelerated. He said it wasn’t one reason but pointed to Norwegian’s promotional offers as a factor.
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