Posts Tagged ‘cruise lines’
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 / 7th September 2008
Web 2.0 is linking people.
Cruise 2.0 is linking cruisers to booking agents, travel discounters, reviews (by actual cruisers not professional critics) and self-created travel blogs. Where is it going?
The article "Understanding the Psyche of Tomorrow's Travellers" states future cruisers “have grown up in an era where computers and rapid communication are the norm, where landline telephones are considered a waste of space as they live on their cell phones and communicate via texting…prospective college roommates have already checked each other out on social networking sites, where they have shared their most personal thoughts with the whole world.”
The trend is already picking up considerable momentum. A recent article from Theodore Koumelis "Web 2.0 playing big role in decision process" states "research conducted in August 2008 by Prophis Research with online US adults has shown that, when compared with a range of offline and online sources for travel decision-making, Internet sources are largely seen to be near the top of the list."
I envision a cruise ship version of classmates.com. Select the line, ship and date. Proudly receive a “badge” (an electronic version of state stickers RV vacationers place on their vehicles). This automatically invites you to link to all others who were passengers on the same ship – opening communication channels to facilitate discussions, share photos, blogs, videos etc., Additionally, this would be a multilingual site (as another Koumelis article importantly points out) to facilitate the expansive international cruise and online growth.
The website would facilitate communication about:
- who else was on your cruise ship at the same time as you?
- what they thought of the experience, or what other cruises they would recommend?
- where they booked their travel or what they paid for the same trip?
- What they recommend for on-board and offshore activities?
- Ever meet someone on-board you want to get into contact with but don’t know how to find them?
- Ever want to contact someone who cruised a specific ship to ask a question (how about what it was like on the Carnival Miracle that left New York City on Aug. 29 (click here for story)?
Yes, there are cruise groups on other sites, facebook, flickr, etc., and yes there are cruise review sites, CruiseCritic, Cruisemates.com etc., However, in the ever evolving world of the web there are always opportunities to bring the next viral application to the market.
I would like to hear you thoughts. Please post your opinion.
Posted By Cruise Market Watch / 4th September 2008
easyCruise (Photo credit: Titanas)
One recent story on European line EasyCruise reminds me of the classic Jackson Browne song Stay. It’s also a wonderful marketing idea the larger lines can borrow from to get their pods chriping.
Research clearly indicates the importance of “sampling’” destinations in cruise selection and the large number of cruisers that subsequently return to ports of call for land based vacations.
So, why not re-capture a portion of this market by adding longer stays in port?
"The concept appears to have attracted people of all ages (mostly curious and well-behaved lovers of travel) who were interested in accessing ports…on schedules that allowed them to truly explore the islands.”
With the unquestionable and widely recognized value of cruises over the cost of land-based travel, cruise lines would have a distinct pricing advantage. And for the traveler niche that is seeking to experience in more depth the destination this provides a good reason to consider a cruise for the return.
A bit more complex to coordinate with cabin embarkation/debarkation and specific destination requirements would be a “train service” approach where a cruiser could “drop off” at an island, stay as long as they like, then use their ticket to re-embark on essentially any ship within the same carrier line to catch the next cruise leg of their journey.
Posted By Cruise Market Watch / 23rd August 2008
What did you eat for breakfast this morning? If you are diabetic, it was likely a slice of whole wheat bread and cottage cheese. A wrestler? Add eggs, bacon, potatoes, orange juice, butter, milk and jelly. From India? A nashta. Cuba, for sure there will be a cafecito. So culture, health and profession are at least three variables that could predict what you will eat for breakfast.
Given knowledge of other possible variables and a large enough data set, one could accurately predict within a range of six or seven items what you will eat for breakfast and be right 95% of the time. Your spouse, after living tog
Disney Fantasy in New York (Photo credit: insidethemagic)
is important to Cruise Line marketers? Because travelers, like breakfast eaters, make decisions based on a set of variables relevant to their lives. Knowledge of these variables and the segments that share them in common lead to five things:
1. Development of product and experience to match consumers price and desire
2. Effectiveness in delivering the right message
3. Efficiency in marketing with the right channels
4. Ultimate satisfaction of the consumer
5. And the chirping they will subsequently do with others in their pod
The graphic below illustrates a number of variables that predict cruise behavior, and how they might aggregate to form market segments.
Explorers- The segment we love to love. These folks take four or more vacations per year, have disposable incomes and take longer cruises, exotic cruises and cultural learning cruises. Education and social causes are important to them. So are making friends and socializing. It’s a smaller and more saturated segment, but one that is lucrative and important to satisfy to retain their business. This group also represents future opportunity, as more couples become empty nesters and retired upscale boomers.
Admirals- These folks have selected their preferred cruise provider and seek a traditional experience. They tend to ritualize their travel experience and don’t usually experiment unless their favorites start to become stale or so radically different the attributes they admired become unrecognizable. Great cruise consumers, they tend to be older and a good, loyal customer base but offer less opportunity for growth.
Marines- This desirable yet elusive segment is made up of upscale, motivated and active young professionals. They are most likely to snorkel, para-sail, surf and rock climb. Whether new or experienced cruisers, they are always auditioning better ships. They are intellectually curious, media-involved, and they perceive value in not only the appearance of being active but also the reality of learning and being challenged. Cruise companies can grow well in this segment. They are the logical target for active ship design strategies as well as expanding Internet marketing.
Little Mermaids - This segment is made up of upper middle class families. They are experiencing an increase the pace of daily activity and a crunch for time. With every non-working moment devoted to family errands (stopping at the Home Depot to pick up an attachment for the air pump for the kids pool or running to Target for a new basketball for the son’s friends birthday party) they are looking to maximize leisure activity as a family experience that includes opportunities for real quality-bonding.
Escapers - This is a desirable segment and probably the core of the cruise market. They are just looking to get away. All-inclusive is just fine. No complications, no worries. From their point of view, after having spent a hectic year in the rat race with traffic jams, bad tempered people and an abundance of things that need to be done, they have earned the pleasures of doing nothing but sitting by the pool, seeing a few sites and relaxing. They are somewhat price sensitive but will always find the money for the trip they deserve.
Souvenirs - These folks have jobs (not careers) and lives (not lifestyles). Because the exact line isn't as much a priority for them as price, their cruise habits skew toward just taking a trip more than specific destinations or activities. Lacking intense interest in the world outside they are primarily focused the internalized experience of the moment. They tend to take a cruise vacation only when there’s a “really good deal” that everyone’s talking about.
Adrift - There is a group of people in every society who are disconnected from travel commerce, not curious about what's going on in the world and not likely to posses the disposable income. This segment is a realistic target for the attention of breweries and bait shops - not cruise line marketers
This is a theoretical model to be refined with ongoing ethnographic research and ultimately requires validation and statistical modeling with quantitative survey data.
Posted By Cruise Market Watch / 6th August 2008
How about learning Spanish, how to cook a traditional Jamaican dish or the history of the Caribe Indians from a tenured University professor? Based on the results of a recent survey, cruise lines might do well by adding specific learning based courses to on-board itineraries.
From cooking and fitness to theatre and the arts to fashion and spectator sports, the survey found that personal interests are key drivers in vacation decisions. A few interesting facts about travels:
- 87% indicate that personal interests drive the majority of their vacation plans
- 60% say the stronger they feel about a passion, the further they've traveled for it
- 57% are willing to travel any distance to explore their personal interests
- 36% said they wouldn't consider a vacation destination that doesn't help them fulfill at least one personal passion
Vacations that incorporate personal passions also tend to be longer by almost double the number of days compared to those trips that do not include personal interests (16 days versus 9), more frequent (6 trips versus 3), and more expensive ($3,900 versus $2,400).
What are the most popular travel passions?
- Culinary Interests: A growing number of travelers are inspired by the desire to expand their culinary horizons. In fact, 42% said that culinary factors, including the ability to try new cuisine and indulge in truly exotic/native dishes, were extremely/very important to their travel choices. This was particularly true among the younger respondents (18-34 year-olds).
- Sporting Events: 28% have traveled to attend a sporting event.
- Adventure: 25% have taken a vacation in pursuit of adventure and thrill from hiking to whitewater rafting.
- Music: 21% have taken a vacation that included attending concerts and/or music festivals.
- Educational travel: More than 15% reported traveling to delve deeper into the history and/or culture of a particular destination.
UPDATE: Click here to see Luxury Cruise Line Siverseas educational itinerary, here if you are a stock or commodity investor and here for a Jazz cruise.
UPDATE (2): I keep seeing more and more on this subject, and apparently it has a name: "edutainment." Read this excellent cruise talk central article about Holland America,
Source: June 2008 American Express Travel Survey
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