Posted By Cruise Market Watch / 19th November 2008
Lets face it; there are just three ways to grow revenue:
1. Increase spending and/or frequency among current customers
With a combination of increased passenger capacity, pressure on pricing and the general economic malaise, number one will be difficult in 2009.
2. Acquire customers from your competition
Number two may be easier, given uncertain levels of brand loyalty among contemporary lines in particular (a subject for a future post). But the result may be lower prices and squeezed margins.
3. Expand the cruise market and acquire new customers
The time is ripe for number three.
A) The market potential is certainly bigger. According to the Allied Academics International Conference the cruise industry holds only two percent of the market share in the total vacation industry. Only 45% of the target North American market has EVER cruised – and there is no reason over time this can’t rise to 70%-80%.
B) The economy may prompt non-cruisers to try something different, of a greater perceived value.
How do we win them? By utilizing a “Link Together and Take Away” strategy.
Why didn’t we see Bond in Quantum of Solace ordering his shaken not stirred martinis in the casino of the Celebrity Solstice?
“Link together” means partnering the cruise line's brand into the extended, non-vacationing lives of consumers. This shouldn’t be done haphazardly. Research on each lines core customers should be conducted to see what other brands and products it's best customers tend to gather around, use most and associate with. Then, reach out to create logical branding partnerships to “link together” – drawing in new cruisers via the associations.
- Fashion retailers: runway and fashion show on board
- Auto makers: place an automobile on deck for one of 3,000 passengers to win. In return, auto manufactures run a sales contest giving away cruises to top performers
- Real Estate: buy a new home from a builder and get a free cruise
- Refrigerator: A Northland stainless mini-fridge in each stateroom. In return, each sold in stores has a sicker inside (take a cruise and for seven days you won’t have to use this)
These are just examples. It’s all about creative ways to get the cruise line’s brand in front of non-cruisers who, in their purchasing behavior, mirror the line’s current best customers.
Obviously the best cruise prospects are those who are already vacationing to locations such as the Grand Canyon or Europe, planning a spa getaway to Sedona Arizona, a family reunion in a Vermont private rental home or a wedding in Napa Valley.
Fortunately consumers surf different web sites and make use of significant research months before they make their vacation choice. In addition to buying Google keywords “cruise,” our ads should also be appearing when they search “getaway spa.” In addition to posting display advertising where current cruisers hang out (travel sites and cruise boards) place them in spa message boards, spa blogs, spa websites and spa niche publications. Invite influential spa experts to sail and lecture. Importantly, the messaging should be specifically tailored to address each particular niche (spas, exotic destinations etc.,).
In sum, 2009 will be an exciting and challenging year. There is an opportunity to go after first time cruisers. By linking together with the non-travel brands that resonate with a given line’s target prospects and by bringing in new travelers to experience the spa or destinations we can all make out like Bond... James Bond.
Posted By Cruise Market Watch / 5th November 2008
The Seabourn Spirit, Sydney Cove, Sydney, Australia. (Photo credit: Wikipedia)
In 2008, there were about 10 million U.S. households with a net worth above $1 million (excluding home equity). This is almost double the number from 2002, just six years earlier. This growth has led to a boon for retailers who can appeal to the luxury market.
In fact, over the past ten years luxury has seen the most growth of perhaps any market sector. During this time, revenue growth in the regular retail mass-market has been in around 4%-6% annually. Comparatively, growth in the luxury category has been from 20% - 32% annually. Estimates are the luxury segment will continue to grow at a rate of 15% a year to 2010.
It is no wonder cruise lines have been scrambling to fill the increased demand for luxury. From now until 2011 luxury cruise line capacity will increase 30%. The rest of the cruise industry’s capacity will increase 17% over the same time period.
The bulk of this increased luxury capacity is with Carnival’s Yachts of Seabourn. It alone is growing passenger capacity 216% over the next 3 years - from a current three-ship total of 624 passengers to a six-ship total of 1,974 passengers.
Over an entire year this amounts to a considerable amount of new customers to win. Approximately 50% of Yachts of Seabourn’s current consumer base is a repeat customer. Therefore, Seabourn will need to generate significant interest within the luxury niche to find and expand its customer base.
It is interesting to play with the numbers. Assume each of three new ships (the first named Odyssey, with its maiden voyage scheduled to depart Venice, Italy, on June 24, 2009) are at sea for a total of 48 weeks per year with a trip duration average of 17 days. That’s roughly 20 trips per year per ship, or 60 total sailings per year. With 450 passengers per ship, that equates to 27,000 new passengers annually.
How to win them
To win them, Seabourn will communicate its unique experience: industry’s best crew-to-guest ratio, “of coarse” attitude, engaging social environment, well-appointed suites and privileged access to the world’s most desirable ports of call.
According to Greg Furman, Founder and Chairman of the Luxury Marketing Council “In addition to the search for the memorable, the unique and services that have high value, is what I call the rise of connoisseurship and the hunger to know. Never before has the luxury market seen buyers as interested in learning what constitutes the best of the best.” In addition, the luxury consumer has become “more and more demanding of superior service, intelligent communication and a personalized understanding of their wants, likes and desires.”
Seabourn will use marketing to generate positive social conversations about Seabourn within the most discerning ultra luxury travel segment in the world. Conversations that will lead to increased agent, friend and family referrals. Again, Furman: “They want sophisticated marketing, marketing intimacy, one-to-one marketing, what I call intelligent coddling by brands.”
Not to be left out, Regent Seven Seas Cruises recently announced that it will invest approximately $40 million dollars to implement an extensive refurbishment and enhancement of the line’s all-suite vessels. "We are not only refurbishing the ships, we are adding many new luxury features that will enhance the guest experience,” said Mark Conroy, President of Regent Seven Seas Cruises. “This comprehensive enhancement program will see each of the ships emerge essentially brand new and positions our fleet as the standard-bearer in the luxury cruise category.”
Posted By Cruise Market Watch / 5th August 2008
Who could benefit from this web site? Almost anyone interested in marketing and research. Sustainable growth and development of consumer markets is a delicate balance of both art and science. But more than that, it is a systematic process of identifying and maximizing business potential by meeting consumers conscious and subconscious needs. That systematic process can be applied over and over for any industry.
The cruise industry itself is vastly larger than just the ships we observe in ports of call. It includes:
- Cruise Lines
- Advertising Agencies
- Travel Agencies and Agents
- Industry Analysts
- Trade Associations
- Cruise customers
- Travel and Tourism Colleges and Universities
- Ship Builders
- Ancillary Industries
- Transportation services
- Destination cities and countries