11 Questions with… Silversea Cruises’ Adam Armstrong

LATTE speaks with Silversea Cruises new SVP and MD Australia/New Zealand

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Silversea Cruises this month welcomed Adam Armstrong to the position of Senior Vice President and Managing Director Australia and New Zealand. The new regional head is highly regarded in the cruise industry, and joins Silversea following a near decade-long term at Royal Caribbean during the sector’s most rapid period of growth.

In late February, Armstrong gave Royal Caribbean six months’ notice of his plan to depart to ensure a smooth transition for his replacement.

This week, LATTE spoke exclusively with Armstrong from his new Sydney CBD digs, having returned to work-life after a three-and-a-half month period of ‘gardening leave’ which included exploring parts of Europe.

We also asked the question the industry has been wanting to know – did Armstrong have inside knowledge that his former overarching company had its eye on taking over Silversea Cruises?

 

Adam, how was your time off after departing Royal Caribbean?

It was great. I sorted my life out and went on a nice long holiday in Europe which I haven’t had in a long time. It was nice to not have any work emails or any distractions, to just relax and focus on having a holiday. It was a bit of a luxury.

It was almost 10 years for you at Royal. What was the reason to leave?

There was an element of coming to the end of the journey with Royal and I was looking for a new opportunity, either within Royal or outside, so we got to the new year and I decided to give the company notice.

I wanted to provide Royal with six months’ notice, but there was also a legacy element of what I and the team had created over the nine years of building up business. I didn’t want to up sticks and leave straight away. I wanted there to be stability and a well-managed handover to Susan Bonner, my successor. Susan and I know each other well, having worked at Royal over the years. I wanted to ensure a nice, calm, orderly handover to Susan who was coming from Miami. She couldn’t move immediately, so I needed to stick around and keep the lights on and keep things going. Susan got here as quickly as she could, I then did three months with notice.

In the meantime, the Silversea call came very quickly after Royal Caribbean announced publicly that I was leaving. So it was fortuitous timing – one, it was nice to be asked, but secondly, the Silversea brand is a phenomenal brand, one that I’ve known since I got in the industry almost 20 years ago and respected over that time. It’s very rare to have an opportunity like this to come up in Australia, because there aren’t many corporate offices here, although there are more than there were a couple of years ago. I saw it is a good opportunity for me to go off and doing something a little bit different.

Silversea is a good brand, has a good team, with good growth potential and really, I’m here to grow the brand in Australia – that’s my objective. It’s not just doing what we’ve always done. The brand is growing and has been growing and has got more ships coming. So we need to maintain our market-share in Australia and that’s the appeal for me.

From such great foundations – a great, established, respected brand with a good team already here in Australia – I just need to take it to the next level for all those new ships that are coming.

How big is your team here in Australia at Silversea?

There’s 40 of us here. That includes a reservations team. We handle reservations here for all of Asia Pacific and we’ve got our sales and marketing team for Australia and New Zealand based in downtown Sydney. I’ve lived here for 14 years and I’ve never worked in the CBD. I started with Carnival in St Leonards, then moved to North Sydney with Royal and I’ve finally made it to the CBD. It’s closer to home; I’m in Darlinghurst, so it’s walkable.

So Adam, were you aware of the deal between Royal Caribbean and Silversea? Was it even a possibility back in February, that Royal Caribbean had let slip, or perhaps you were aware a deal with Silversea was imminent?

Well the conspiracy theorists among the industry thought it was all part of a grand master plan, but it wasn’t. It was completely coincidental. I got the call and started to talking to Silversea, and it was only after I accepted the role had I heard that there was potential of a partnership. So it was purely coincidental and ironic, but it’s also fortuitous. I know the company, I’m known within the company, I’m going to help push Silversea forward. Royal also does give its brands a reasonable amount of autonomy to get on and do what they need to do to be successful, so I am very happy about the partnership.

Could the merger with Royal Caribbean see the Silversea local operation morphed into the Royal Caribbean operation, and you repositioned back to North Sydney?

I have no idea at this stage. What’s happening now is – for us, it’s business as usual at Silversea. What’s happened is the company has formed an integration project team, with representatives from Silversea’s head office in Monaco and in Miami for Royal and they are working through the integration plan. That will take a couple of months to work out. What it means to us is we don’t know yet, but it’s very much business as usual for still filling the ships and we’ll continue as is.

What areas of knowledge and experience in the ultra-luxury segment do you have?

I haven’t worked directly for an ultra-luxury brand before. That is what it is. Azamara was one of our brands at Royal which is in the same space, and then there is the Suite and Premium accommodation on our Royal and Celebrity ships, which are about the same, if not a higher price-point than what Silversea operates at. So that’s my experience in the luxury space, along with personal experience with taking luxury holidays and cruises.

But the principals are all the same, regardless of the categorisation of the ship or the product.

The principal is filling the ship to the highest occupancy possible, at the highest price possible, so that’s the experience that I can bring. On top of having had nine years of continual double-digit percentage growth at Royal, bringing in new ships, growing our Australian guests – considerably so, we grew more than 10 fold in my nine years at Royal – so I can bring that experience of growth, bring that experience of filling ships at the highest possible price, getting the deployment right, getting the pricing right, filling ships. All those disciplines are the same.

Have you personally stepped aboard a Silversea ship? And if so, how does it differ from what you are familiar with at Royal Caribbean?

I have. I gallantly gave up two weeks of my gardening leave to go on board and have a holiday on Silver Muse, Silversea’s newest ship which launched just last year. I was in the Mediterranean and took a nine-night cruise, and it was fantastic. It was the first thing I was able to do with the company – experience the product firsthand. It was good to sample the product as an everyday holiday maker before I started, so I had no preconceived conceptions about the brand. I just got on and merrily went about my business as a holidaymaker. It’s a fantastic ship.

It’s very different from, say, a Royal ship. Quite similar to an Azamara vessel, but the difference between Royal and Silversea is significant. The size of the ship is much smaller, the décor is much more elegant and understated – kind of a muted colour scheme. For Silversea, the emphasis is not on the ship as such, it is more the experience and the cuisine, so that’s quite different. There’s no ice skating rink, rock climbing wall, Flowrider and so on. It’s a very pleasant, spacious environment on board the ship.

In your new capacity and company, what are some of your immediate short-term and long-term goals?

In the very short-term I am immersing myself in the team and the local business and finding out what we are currently doing: what works, what are some of the challenges for the team here and then what can we do to get over those challenges. I’m starting to get some clarity about how the business operates and also around what the expectations are from head office and where they want the business to be in five and 10 years’ time.

What they want is long-term growth, so that’s really the long-term goal – growing the brand, growing awareness, growing the number of guests and growing our market share over the next five to 10 years.

We’ve got more ships on order – two more to come – so there is room for growth. We could be the number two market in Australia after the US. The United States is number one, then the UK, then shortly followed by us in number three. I think Australia could be the number two market for Silversea within two to three years. We’ve got the capacity to do that, we’ve got a strong cruising propensity in this market, we’ve got a wealthy population who will cruise at this end of the cruise spectrum. We’ve got a high propensity to travel – Australia is a travelling nation. So all the ingredients are there, we just need to focus on getting the messaging right. To the right consumer, at the right time, get the promotions right and make sure that our relationship with travel agents is strong, so they are including Silversea when someone comes into their office to ask for a cruise, and that it’s within the portfolio of products that they know and understand and want to sell.

Could Silversea’s seasonal deployment in Australian waters ultimately be expanded? Could a ship be based down under longer?

We’ve currently got two seasonable deployments: one up in the Kimberley, an expedition ship over our winter period; and then in our summer, we have Silver Muse sailing out of Sydney doing the New Zealand, South Pacific itineraries. Plus we’ve got a third ship that comes in, Silver Whisper, which operates our World Cruise every year. So we’ve got three ships that come to Australian waters per year.

Silver Muse arrives this summer for the first time. We are bringing our brand-new ship down for five cruises through January and February and then next summer we’ve already announced Muse is coming back for four months. And that’s probably the sweet spot – from November through to March. Then we need to get the ship back up north to operate Alaska cruises. I think you’ll probably see us stick around that four-to-five month period. We can extend a little bit in the shoulders, but the peak summer is where you’ll see us for the Sydney-based ship.

How significant is the trade to Silversea?

In terms of the trade, the majority of our guests book through the travel agent community. We want to work stronger and harder with them.

We are probably not working with as many agencies as we’d like to, so we’ll be looking at ways we can get out to more agents and be more relevant to them in the future. But they are absolutely our bread and butter, and we want to work together.

We are open to any feedback they have on how we can collaborate together and grow the business. We all want to grow. I think there is great opportunity for the Silversea brand.

Luxury cruising is around two per cent of the global cruise market today. It’s tiny, but it’s very lucrative. These are high ticket-price holidays. It is a high ticket price and it includes so much more in terms of food and beverage, so the earning potential on a Silversea cruise is immense. There is a big luxury holiday market there to be tapped. People who are holidaying not on cruise, but on land, could convert over and jump between the two segments. The potential is immense.

We are a wealthy nation in Australia, so there are plenty of people out there paying this kind of price for a holiday. We just want to get more of them on a luxury ship and more of them on a Silversea ship. And that’s why I am here. If we can get a couple of hundred agents to book one or two more Silversea bookings a year we’d be very happy with that.

And what is Silversea’s position on famils?

We do offer famils but we naturally can’t get everybody on them. One of the great things about having Silver Muse come down to Australia is that it gives us the opportunity to get as many agents and media and past & prospective guests on board the ship. That’s what we are really going to be focusing on this summer – getting as many people on that ship as possible, even if it is just a walk-around. It’s all about maximising the use of that ship when she is here.

Silver Muse is a tool to get the brand to more people than ever before. Then we’ll be doing some famils in the background as well, but being a small ship company, the opportunities are understandably limited.

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