Tuesday, July 28, 2009

Regent Seven Seas v. Seabourn: Philosophy, Pricing and Practice

Frank Del Rio, President and CEO of Prestige Cruise Holdings, owner of Regent Seven Seas, recently was interviewed by Travel Weekly Magazine. The article was about sales and marketing of Oceania and, to a much lesser extent, Regent.

There was an interesting exchange:

Q: With Regent, you chose to include shore excursions rather than lower prices. Did that stimulate sales?

A: Like nothing you've seen. It's one of the reasons why our business is stronger than most right now. This industry is one of lemmings. There is too much copying going on. Everyone lowers prices to stimulate sales. It works, but it hurts the travel agents. Every week I hear that half a dozen agencies are going out of business. We said, we don't want to hurt travel agents, and knocking $60 off our cruise won't motivate a sale the way it might at [a mass-market line]. Including shore excursions makes them commissionable.

I recently spoke with Mr. Del Rio at an Oceania event and let him know that I was not fond of the inclusive shore excursions. He questioned me as to why and I told him because it is not a luxury amenity. I explained that in the luxury market most people do not take cruise ship tours, but rather private tours. So, to my way of thinking, the inclusion not only doesn't add real value, it brings in a way of cruising that while positive for the cruise line's immediate bottom line is not necessarily so for the overall luxury cruise experience. (I offer complimentary Ensemble Travel tours on many of the cruises I book for clients. As a new alternative, I am able to offer a $150 per person onboard credit if they don't want to take the tours. This came about for the very same reason: Luxury clients tend not to take the group tours.)

There have been some recent articles on the internet about dissatisfaction on the Regent Voyager due to cutbacks in food quality (I struggle with the quality of the product, it may be the preparation or menu descriptions/marketing) and service. The issues with Regent Mariner being literally overrun with children with 125+ on its Alaska sailings may look positive to Regent's immediate bottom line, the negatives of poor service, an overwhelmed dining room, crowds and a very non-luxury experience...even at embarkation. (I will leave the Regent Navigator out of the mix...anxiously awaiting the major refit upcoming in January!)

Seabourn, on the other hand, has taken the approach which Mr. Del Rio has criticized: Seriously cutting its prices. I, too, believe that is the wrong thing to do as far as long term benefit. However, that is where we part company. As anyone who as recently been on Seabourn, including the new Seabourn Odyssey, will tell you, the service and cuisine is as good - or in the case of the Odyssey: better - than it was before the cut rate pricing.

The result I am seeing the most of is clients who were booked for 2 or 3 weeks in 2010 not looking to benefit from the reduced pricing, but rather to extend their cruise to 3 or 4 weeks for the same, or in some instances, less money. Yes, there are those that have never tried Seabourn that are coming onboard, but it is not with an expectation of anything other than it being more of a "privilege" than a "bargain"...event though the bargain has drawn them in.

So, if you believe getting more stuff equals more "value", Regent may be the way to go. However, if you are looking for more "value" in a true luxury experience, there is no question that Seabourn consistently provides that.

And if you still want some included tours...you never know, I just might be able to provide that for you as well.