CRUISE INDUSTRY

At travel agent convention, cruise CEOs talk shop

 

hsampson@MiamiHerald.com

Cruise lines have to keep adapting, growing — and sometimes taking cues from each other — to thrive in today’s marketplace, a panel of industry executives said Thursday.

During a nearly hour-long discussion in front of hundreds of travel agents at the Hyatt Regency Miami, no one mentioned events that have roiled the industry over the past couple of years, including the Costa Concordia shipwreck and fires aboard ships owned by Carnival Cruise Lines and Royal Caribbean International.

Instead, moderator Arnie Weissmann, editor-in-chief of Travel Weekly, and the heads of Royal Caribbean Cruises, Norwegian Cruise Line and Viking Cruises chatted about their target audiences, onboard experiences, extra fees and, appropriately for the audience, the importance of travel agents. The discussion was part of the American Society of Travel Agents’ global convention that drew more than 800 this week to the Miami Hyatt.

Miami-based Royal Caribbean and Norwegian, which sail megaliners filled with thousands of passengers, both said they need to offer amenities that appeal to children as well as their grandparents.

“We’re not trying to be all things to all people, and I think the industry has done a pretty good job of maintaining differentiation,” said Richard D. Fain, chairman and CEO at Royal Caribbean Cruises. “That actually reemphasizes the role of a travel agent. You need somebody who can say, ‘All their ships are great, but this one is good for people with kids, this one is more destination-oriented.’ ”

Fain acknowledged that players in the industry get ideas from competitors, prompting Kevin Sheehan, president and CEO of the competing Norwegian Cruise Line, to quip: “We noticed.”

Asked about the abundance of extra-charge restaurants and other revenue generators on ships in their fleet, Sheehan and Fain said they try to offer a mix of free activities that will have widespread appeal and upgraded options for those who want to spend more.

“It’s almost like, given the fact that the pricing has never really moved for 20 years or 30 years, it’s forced the industry to come up with other ways to be able to preserve some sort of profitability to make the industry viable,” Sheehan said.

Fain said the industry has evolved to the point where ships offer “a cornucopia of choices,” though some of those options cost more to offer than others.

Tor Hagen, chairman of Viking Cruises, said his company — which has nearly three dozen river-cruising vessels and will introduce two oceangoing ships in 2015 and 2016 — caters to older guests who care more about destinations and don’t want to feel “nickel and dimed.”

As a result, the company includes wine and beer, some shore excursions and specialty restaurants in the cost of cruise fare. Hagen said the proposition seems attractive: the ship that launches in April 2015 is 80 percent sold for its first cruising season. That announcement generated applause from the crowd, as did Hagen’s reminder that Viking pays travel agents commission on everything that they sell.

Sheehan reiterated Norwegian’s commitment to improving its relationship with agents.

“We need to continue to make sure travel agents are relevant and we’re investing in marketing and technology to make sure they can continue to stay in the game,” he said. “It’s also the responsibility of travel agents to take advantage of that and not continue to sell the way they did five years ago.”

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