After rough start, Virgin Voyages finishes first year of adult cruising with new ship in Miami
Minneapolis-area couple Bob Lehr, 59, and Michael Clabaugh, 51, stood among the crowd Oct. 30 waiting to board the first sailing of Virgin Voyages’ new ship at PortMiami, the Valiant Lady, which holds 2,770 passengers.
The pair has taken dozens of cruises on Carnival and Norwegian ships, but newcomer Virgin Voyages is quickly becoming the preferred cruise line for them. Why?
“No kids,” they said in unison. It’s their third cruise on Virgin since the Richard Branson-owned company first welcomed passengers aboard in October 2021 — a year and a half behind schedule. They also like the varied restaurant options and that the fares include Wi-Fi, gratuities, fitness classes, all dining and non-alcoholic beverages, while other cruise lines tend to have an array of different packages and extra costs.
A cruise line disallowing children was viewed as a risky move in the cruise industry, because families with children have long been the bread and butter of that sector. But Plantation-based Virgin is determined to create a new experience at sea. It’s aiming to lure adults willing to pay for an upper-market cruise on smaller ships that have Instagram-friendly interior design, ample opportunities to party and plenty of food and drink.
“People were skeptical [about adults-only] because they can’t do it like we can,” said Tom McAlpin, CEO of Virgin Voyages. “When you ask someone why they booked Virgin Voyages, the number one reason is because of the brand and the number two reason is because it’s adults only. That’s right where we want to be and exactly what we planned for. We have a modern vibe; we took inspiration from super yacht designs.”
Virgin nears completion of its first full year of adults-only cruising, quite optimistic about its future in South Florida. Its second ship Valiant Lady will sail from Miami, during the winter season. And all indications are the cruise industry overall has made a strong comeback from the vagaries of the coronavirus pandemic that had halted cruising.
For Virgin, it’s endured a chopping start, after repeatedly delaying its Miami debut and putting its first ship in the water at half capacity due to the pandemic. Then there were persistent staffing shortages and global supply chain issues, ultimately causing Virgin to postpone this summer’s debut of a third ship, Resilient Lady, and cancel vacations for thousands of customers.
Originally, Virgin was labeled as offering cruises for millennials. McAlpin called that characterization a “misnomer,” although the marketing and onboard amenities — including a tattoo parlor — make a nod towards younger crowds. Virgin targets couples without children (or parents who want to get away), groups of friends, and first-time cruisers who wouldn’t dream of stepping into the formal dining rooms of cruising’s past. In late October, the people aboard the Valiant Lady for its first Miami voyage appeared to be 45 to 50 years old.
Virgin officials say they’ve more than doubled their ship occupancy rates since the October 2021 launch. The cruise line has a 4.5-star rating on TripAdvisor and its inaugural ship Scarlet Lady was named Cruise Critic’s best new ship.
Colleen McDaniel, editor-in-chief of Cruise Critic, a TripAdvisor-owned website of cruise reviews and forums, said that Virgin has a high level of customer satisfaction and company leaders are eager to improve.
“They pay attention to feedback,” she said, referring to tweaks made to ship entertainment and cabin features.
McDaniel added, “We are hearing great things about their dining; there’s a range of different, excellent restaurants with things like vegetarian-forward restaurants, a Korean restaurant. You can dine around without having to pay extra, people like that. They’ve also gotten the fun factor right. There’s pop-up entertainment and moments onboard that you’re not expecting.”
While competitors typically pride themselves on providing affordable family vacations, Virgin cruises are not considered cheap. Cruising on Virgin’s new Valiant Lady or Scarlet Lady in December will cost between $1,200 and $3,300 a person.
“We’re filling the ships; we’re happy with the way bookings are,” McAlpin said. “But this is a premium-plus experience. We’re not competing on price, we’re competing on experience.”
Poor timing
Looking back, Virgin’s launch into the cruise waters could not have been worse timing. The Miami debut was set for March 2020, just as the entire industry came to a screeching halt due to the pandemic. When it did start sailing in October 2021, Branson told the Miami Herald he realized the cruise line was going to be in trouble when his longtime friend and former Spice Girl, Geri Halliwell, canceled her celebrity appearance on the ship due to the rapid spread of COVID-19.
“I thought, ‘We’re friends. What are you doing?’” Branson said then. “That was the first sign that something was wrong. ... There were a lot of tears.”
In total, Virgin delayed its Miami maiden voyage six times.
“Under the circumstances, they’ve been doing well,” said Andrew Coggins, a professor at Pace University’s Lubin School of Business, who specializes in the cruise industry. “Because they were a part of the Virgin empire, they were able to survive COVID. If they had been a startup with hedge fund investors, I don’t think they would have survived.”
Strong financial backing
Virgin Voyages is backed by parent company, Virgin Group and Bain Capital Private Equity. In August, the cruise line announced an additional $550 million in funding, led by funds and accounts managed by BlackRock. Virgin intends to have four ships in the water by 2024.
Coggins explained the barrier to entry in cruising is high, with the initial investment to build a cruise ship between $500 million and $1 billion. Shipyards are selective about taking new clients. They tend to only take orders for several ships that make up an entire class. And since ship builders are paid in installments, they’re wary of new cruise lines because they want to be sure the company will still exist when their ships are built. Then there’s the challenge of attracting customers in a market that’s dominated by legacy brands like Carnival, Royal Caribbean, Norwegian and others.
New cruise lines that have succeeded include MSC Cruises and Crystal Cruises, whose parent companies both had a background in shipping and lots of capital. Coggins also pointed to Disney as similar to Virgin with recognizable brand names helping them attract customers right out of the gate. Virgin and Disney have something else in common: McAlpin. Virgin Voyages’ chief executive was an early leader in the launch of Disney Cruise Line and was the CEO from 2004 to 2009.
Summer hiccups
Over the summer, Virgin faced disgruntled customers when it canceled dozens of cruises due to a delay in readiness of a third ship, the Resilient Lady. The ship was supposed to have its maiden voyage in Athens in August, but in June the company said it would not be ready until spring 2023.
Virgin also canceled cruises during the Valiant Lady’s summer season in the Mediterranean, after company officials were approached by producers of the popular television show the Bachelorette to film the 19th season on the ship.
“We gained a lot of brand awareness,” McAlpin said, regarding the Bachelorette. “We had some [customer] complaints, but we took very good care of them and made them happy. It’s always unfortunate, but you have to make business decisions. And so I think at the end of the day, it was the right thing to do for a company.”
This story was originally published November 13, 2022 at 5:30 AM.
