Posts Tagged ‘strategy’

Cruise value will be enough to manage economic slowdown.

One can make an argument that the slowdown, over the long term, may actually help the cruise industry. Hear me out.

Yes, in recent weeks there has been a decline in bookings and some price drops as a response. Declines have also been noted here in our CruiseSearch and Cruise Price indexes.

Once the initial panic to the stock market fall stabilizes, vacationers will begin to feel less stressed, adjusted to their current economic circumstances and more comfortable to begin booking again. This will happen soon.

Over the longer period of a recession, I believe vacations (perhaps considered a luxury to previous generations) are now considered a necessity.  Even in this economic slowdown, people will still be looking for something to do – just searching for a better vacation value.

This will mean:

  • Families who were thinking 7 day cruises will now be booking 4 or 5 day cruises (shorter cruises in-fact, might prompt higher per-day per passenger on-board spending).
  • But most importantly, non-cruisers who were considering a different type (more expensive/less value) of vacation may now consider a cruise.

Where else can you find for as little as $100 per person per night?

  • Breakfast, lunch and a lobster tail sit down dinner – every day
  • Water-park
  • Nightly Vegas style entertainment
  • Hotel room accommodations
  • Travel to exotic destinations
  • Casino, shopping etc. etc.,

No doubt, the oncoming recession is serious. Cruise lines earnings per share will be impacted. To keep prices low and cabins filled cruise lines will make:

  • additional expansions to local ports of call (further reducing consumer's travel costs)
  • more pricing segregation on ships – meaning less access to fewer included amenities for lower priced berths.
  • fewer all-inclusive amenities overall and more charges for on-board services.

My point is the recession may actually stimulate some non-cruisers to try one for the first time due to the value.  Over the long term, this would further expand the market and positioning cruise lines for even more success in the future. To make this happen during these rough economic times, cruise lines must not back-off promotions, advertising the worry free escapism and value cruises offer.


Apollo Management: Will three plus ten equal one?

Will Apollo Management acquiring three top cruise brands in ten months equal one publicly traded company?

  • premium cruise line Oceania acquired April 2007 ($850 million)
  • contemporary line Norwegian acquired August 2007 (50% ownership $1 billion)
  • luxury cruise line Regent Seven Seas acquired February 2008 ($1 billion)

One would imagine they have a larger strategy in mind.  It may not be long before we see a publically traded company that intergrates all these holdings under one umbrella.


Partnering with land-based destinations

It is an interesting fact that 38% of all cruisers have returned to destinations for a land-based vacation after first going by cruise.  In fact, when comparing the benefits of cruising over other vacations, 61% consider it preferable specifically because it provides a chance to scope out several different locations in one trip.

With some cruisers taking up to four additional non-cruise vacations a year, this strikes me as a tremendous opportunity.

Wouldn't it open the possibilities to brand extensions into hotel chains or destination-based businesses?  I commend Carnvial for past experimentation with Carnival Crystal Palace hotel in Nassau and Carnival Air, but see a time to innovate new ways to capitalize on returning visitors.

I'm not speaking about expensive acquisitions in areas outside of core competencies, I am speaking about joint ventures, name leasing arrangements or marketing partnerships.  For example, Donald Trump has earned several million of his dollars not as developer or an investor but by having others pay him to use his name on their condominium towers.

New and upcoming developments like Xcarat find value in extending awareness among potential visitors.  They could name and create an exclusive activity within the park for a cruise line. In return, the cruise line extends time of stay in the local port (allowing time to experience the activity).  The cruise line wins because its brand is seen by non-cruise visitors to Xcaret and cruise travelers choose it over competition because of the exclusive experience. Xcarat wins the traffic of the cruise line and the visitor wins all around.


Get Your Pod Chirping; Grow Your Market Niche

You will read me referring to “getting your pod chirping” throughout this blog. What do I mean?  Well, dolphins swim in pods. And as it turns out, these aquatic mammals are actually quite social. They communicate by producing chirps, whistles, creaks, chuffs, screams, squawks and pops.

What does this have to do with marketing? Well, the ocean is a big place and so is the marketplace (if you are going to be all things to all people).  If you are tossing a pebble into the sea it is time to rethink your strategy.  Here are five simple rules to help you focus (click here for the video).

1. Pick a pod.  One that will immediately find value in your product or service (will help the pod catch more fish, swim faster or discover new ways to play).  You want to find the pod you can make “chirp.” If you are setting out to be a better Google, Microsoft, Publix, Ebay, Hoover, Nebraska Furniture Mart, the Rolling Stones or any other dominant market leader then I propose you may be trying to drink the entire ocean in one gulp.  Are your resources inexhaustible? Better to change the rules, disrupt the status quo and find a niche where you can be the best in the world.  Pick a pod like Addthis, Quicken, Wholefoods, Skype, Dyson, PB teen and Lou Reed.

2. Get the attention of the pod. The pod is busy chasing its next meal. To get its attention requires a product that will resonate throughout it.  One that is different, unique, extraordinary, of real value and delivered with a true passion.

3. The right product or service must be focused on gaining the attention on the alpha influencer. Which dolphin is leading your target pod? If your idea can get the alpha influencer chirping, then it will evangelize it to the rest of the pod.

4. Is your pod chirping? If so, you’ve succeeded in reaching the tipping point within your market niche. Now you need to deliver on the promise of your brand. Do you provide irreplaceable value? Do the members of the pod bestow status upon users of your product or service?  Can your pod rely on you to deliver time and time again?  Can the pod no longer imagine the ocean without you?

5. Now that you’ve left the “long tail” of “OK,” “average” and "also run" behind; you are a market leader in your pod.  It is your job to stay alert and ahead of the sharks (the next disruptive wave).  Remember, if your looking ahead, with each disruption comes a new opportunity.  While the music, automotive and movie industry pods are threatened and scattered, allmusic guide , smartcars, solaris and imdb thrive.

To stay motivated on your quest, check out Seth Goodin's post - In search of dolphin leather


The next great wave

Online cruise travel bookings

Internet Usage to Book Online Cruise TravelThe chart to the left shows the percentage of cruisers who use the Internet to contact a travel agent. I saw Internet growth figures like these in the late 1990's for usage of the Internet for news.  Today the number is well past 70%.

Travel agents and cruise lines also need to avoid what airlines fell victim to: online searching for tickets helped to create a commodity like lowest price war.  In fact, travelers already most frequently believe that the best prices can be found on the Internet (51%) and the assumption is even higher among non-cruiser vacationers (59%).  Continued branding and building of distinctive ships and activities will be paramount to communicate it's The Line you choose for the journey, not just a transportation vehicle to sample destinations you are likely to visit again.  (Side note: 80% of cruisers agree that cruise vacations are a good way to sample destinations they may wish to visit again.  Click here to learn more on topic.)

Since this online booking behavior is most typical with newer and younger cruisers (the contemporary segment) it represents tremendous opportunity for growth.  While Travel - Ground/Cruise accounts for 6% of all web traffic, or 11 million unique visitors, the dominant share of online traffic between the big three Cruise Lines is still very much anybody's game.  See CruiseSearch for more.  Whoever can do it best will capture a larger share of the online cruise booking market.  The opportunity could be in integrating service functionality into the website - only 17% see websites and online travel retailers as providing the best service.

Here are some other Internet related cruise research facts:

  • When choosing vacations, cruisers are influenced by multiple sources, especially destination web sites (39%) and cruise websites (28%).
  • Cruisers plan trips well in advance (5.6 months) compared to non-cruisers (4.9 months) - giving them plenty of time and reasons to go online.

Sources: Comscore