The ultra-luxury ocean cruise segment is growing exponentially each year, with vessels already in the top-of-the-line flotilla being out-done by newer technology advances, extravagant suites, fancier restaurants and onboard and off-ship experiences from which consumers can choose. The advancements can make pairing the right cruise product for the right client a challenge for agents, especially since the word “luxury” has been so heavily “bastardised”, says Norwegian Cruise Line Holdings’ (NCLH) Senior Vice President and Managing Director, Asia Pacific, Steve Odell.
Norwegian Cruise Line Holdings is one of the primary players in the ultra-luxe space, with its top-of-the-line product, Regent Seven Seas Cruises, currently consisting of four ships but swelling to five when Seven Seas Spendor joins its fleet in February 2020.
NCLH has its bases covered in other cruise segments too, with a presence in the premium space through the Oceania Cruises brand and in the upscale contemporary band under its namesake, Norwegian Cruise Line.
The multi-market positioning provides Norwegian Cruise Line Holdings with the ability to offer a diverse range of ocean-cruising products. Odell says it’s crucial for travel agents to be aware of the differences when selling high-ticket cruises, to ensure their customer’s experience meets expectation.
“At the ultra-luxury price point is Regent, and that tends to be suites-only, more inclusive, smaller ships and the price point is up around $700-$800 a day, whereas the Oceania product has smaller rooms, more people, is more unbundled and has a price point of around, say, $400-$500 a day,” Odell said.
“There’s a bit of crossover, but they are very distinct markets. Obviously, there’s a lot more volume in the premium market because of the price-point – supply and demand – but I think this is the challenge.”
“I’m a great advocate for honest marketing. The word “luxury”, for example, is really bastardised and I think a competitor came out comparing their product to that of Regent. But you know, it’s nothing like the Regent product. Yes, the competitor includes an excursion, yes they have open seating dining, there are some similarities. But it’s like comparing the Park Hyatt to the Sofitel – it’s just different,” Odell explained to LATTE during a wide-ranging interview.
“In our work with travel agents, we are very quick to distinguish what the luxury market is. It is Regent, Silversea and Seabourn. They are the three brands that compete for the same kind of client, each with differing inclusions. Viking is not in that. It’s a different kind of customer. So I think it is the responsibility, not only on behalf of the cruise lines but also the travel agent to make sure the right client gets the right experience.
“I’m a great believer in that you’ve got to be honest in your marketing. If you give people an inflated impression of what they are going to experience, that’s when you run into problems, because if a Regent client or a Silversea client or a Seabourn client go to the competitor, they are not going to get a luxury experience like they get with the other three leading luxury cruise lines.
“We offer something that is expensive and inclusive and suite-only and it’s a whole different ball game. So I think it’s really incumbent on all of us to be honest about what the products are and where they sit in the market. But to try to claim to be higher up then you are I don’t think is ethically correct.”
For Regent, Seven Seas Splendor will be a “me too” of Regent Seven Seas Explorer, Odell says.
“The challenge we have is that we called the Explorer the world’s most luxurious cruise ship ever built. And now we’ve had to come up with something else to market at the next level, so Splendor will be luxury perfected,” he quipped.
“It will be very similar. Some design faults that we found having built and having passengers on board Explorer we have fixed. Things like sight lines in the theatre. There’s more of a demand for outdoor experiences, so we will have an outdoor part of the Coffee Corner – which is a very big hallmark part of the product – and we’re changing a bit of the colours up and down, but essentially it’s going to look very much like its sister-ship.”
Elsewhere, NCLH also recently revealed a revitalisation program for Oceania’s older “R-Class” ships under the “OceaniaNEXT” project, an announcement Odell said he was particularly pumped about.
“Norwegian and Regent have really shared all the new-ship stories and upgrading, so this is exciting for Oceania. OceaniaNEXT has been in the making for a little while. The first round centred around the R-Class ships, all around 650–660 passengers. They have a huge loyalty following, but they were built 15 years ago so they’ve become a little bit old-style in the decor. They are going to be upgraded to a much more modern look and feel, such as ripping out the bathrooms, putting in proper showers, treating flooring and doing the big suites, new mattresses, new curtains. It’ll look really super new and stylish, modern-style. And then the beginning of November there’s a second stage of OceaniaNEXT which will be another major refurb project that we going to announce.”
Odell said the reaction to the overhaul of Oceania has been overwhelmingly positive. “Oceania needed it because the middle-ground space has become a little bit more competitive. Oceania’s space has been pretty clear of any rivals. We haven’t had a competitor in that luxury price point, so I think this is really good for the brand because it’s allowing us to elevate the brand with new stories and improving the product.”
Quizzed by LATTE if expedition was next on the cards for NCLH, Odell said “never say never, but it’s not on our radar right now. I don’t think you can be properly profitable with expedition as a standalone … I don’t think it’s NCLH’s direction. We’re concentrating on where the core money comes from, and that’s the big ships. We’ve got two highly successful market leaders. The economics of a 600- to 700-passenger vessel work better than a 100-passenger small ship.”
It’s a view also shared on river cruising, an area that Odell has experience from his previous days at Silversea where he revealed he was involved in the research and development phase of work for the rival line. While there would be benefits for NCLH in being able to intertwine selling passengers between river and big ships, and vice versa, “it’s a different business, and our focus is on what we do today. Let’s perfect it and hone it and do it better and be more profitable, and that’s where we are at”.
Meanwhile, market conditions will see NCLH increase pricing across its three brands, effective 1 October 2019.
“Our clear strategy is ‘market to fill’ early for all three NCLH brands: Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. We always offer guests the best pricing and promotional amenities upfront in the sales cycle and as our ships fill, we adjust those rates upwards.
“The expected pricing increase speaks to the current strong position on forward sales for 2019 onwards and to their exceptional value. It’s a win-win for the consumer and agent communities.
“I want to thank agents for their ongoing support. I recommend anyone with clients interested in sailing in 2019 to make their bookings now to not only take advantage of competitive fares but to ensure they secure their preferred suite and sailing,” Odell added.
Additionally, Norwegian Cruise Line will commence a TV advertising campaign starting this weekend. The commercial can be viewed online below.