Wednesday, March 3, 2010

Apollo Management's Changes at Regent Seven Seas - Drinking the Kool-Aid

It has taken some time, but a change in philosophy by some and perceptions by others it seems is finally taking hold.

When Regent Seven Seas was purchased by Apollo Management and then folded into Prestige Cruise Holdings (which also owns Oceania Cruise Lines) there as uproar by Regent loyalists.  "Hedge fund guys are going to destroy our beloved cruise line!" "There are going to be massive cut-backs!" "The crew are going to suffer with being underpaid!" and the list goes on.

To the contrary, Apollo Management saw that the prior management had virtually run Regent into the ground with poorly maintained ships, abused crew policies, poor food and declining levels of service.  I first wrote about this in my June 2008 article, The Oceania-fication of Regent Seven Seas

But then I saw the beginnings of a turnaround because, as I predicted, a year earlier Regent's new sister was a better run company with a better delivery of product (both cuisine and service).  So, in June 2009 I wrote Oceania Cruises - More Like Regent Seven Seas Every Day...Or Is It The Other Way Around?

While this was going on, Apollo Management poured US$90,000,000 into improving the three ships, Regent Voyager, Regent Mariner and Regent Navigator.  The improvements were both long overdue and very well received.  More importantly, they were actually focused on doing what needed to be done:  Fix the ships; especially the Regent Navigator (which has such systemic problems the feat of correcting them was nothing short of incredible).

Shall we digress?  Why would a hedge fund spend $90,000,000 on fixing ships that were allegedly so wonderful?  It takes a long time to make back that kind of investment.  The reason was because it was the prudent financial thing to do.  And, thus, it is clear that the complaints (at least by me) were well-and-truly justified.  More importantly, they are a thing of the past.  (Note:  I do not believe the software is all of a luxury standard such as you find on Seabourn, but it most certainly is of a good standard and nothing that would cause one not to book a Regent cruise...as it might have in the past.)

With the provisioning and philosophy as to cuisine changing, there were/are grumblings that the dining choices were not as many as previously available and that some portion sizes were reduced (though I believe the portion in the Prime 7 alternative dining restaurant are far too large), the fact is that if your kitchen staff cannot produce proper quality and/or the diversity drives up costs and waste, the first thing to do is simplify the menu and each the staff to cook better.  This remains a work in progress, but the complaints do seem to be subsiding.

Service has remained a sore point as well because of inconsistency.  The concept of finding and latching onto a particular waiter is mind-boggling to me.  Some guests brag of this technique, but in fact they are damning the vast majority of the servers actually declaring them of inferior and/or insufficient quality. I know Apollo has, now that the ships are fixed, focused more closely on the service issues. 

And, alas, this is where the management onboard the ships just might be starting to "Drink the Kool-Aid".  I remember watching management play their afternoon shuffleboard while chaos rained supreme at the front desk and the dining room; leaving second or third tier staff to "handle it" while they, when available, gave guests nothing more than lip-service...blaming the home office for the problems. 

Well, folks, the home office is different now (you don't hear much from Mark Conroy anymore do you)...and the focus can't be shifted.  In fact, the home office philosophy is for onboard management to own the problems and correct them.

I have clients departing on a long voyage on Oceania in a few days out of Valparaiso, Chile.  With all of the uncertainty as a result of the tragic and devastating earthquake, Oceania has been excellent in providing emails and faxes with great explanations of what is happening and what is anticipated.  It has created such good will, not only with my clients, but with me.  Oh, for Regent to do such things!

(I will not comment on the "free", "free",  "free" marketing approach by Regent. As a travel agent I do not see the value in it when you look at the pricing versus other lines, but it most certainly has increased sales for Regent that was suffering badly with empty suites and disgruntled guests.  In the end that is the idea, right?  To sell suites so that Prestige Cruise Holdings shows profits and, eventually, can be sold as a well functioning entity at a premium.  (That affords Apollo to stay out of the day-to-day management for if it was involved there would be a discount rather than a premium.)

Well...on March 1, 2010 a poster on Cruise Critic (hondorner) wrote, in part and gently edited: 

"I can't help but wonder why you would automatically assume it was "evil" Apollo's decision, especially in light of the fact that other than a couple of members of Prestige Cruise Holding's board of directors, Apollo keeps a strictly "hands off" approach to the cruise line decisions.


Under the new corporate management, the ships are sailing full, which I understand is different than under the previous management; the cruise line is showing a profit and has record bookings, and more than $90 Million has been pumped into improvements, and the staff to whom I spoke in January were universally in favor of the changes. That doesn't sound very "evil".

I've been hinting at this, but I have to be frank -- while I enjoyed the all-inclusive nature of Regent, I find the service on Oceania to be just as good, the food better, and the overall ambiance to be superior to Regent. Why is this relevant? Because the management of Oceania that has brought it from nothing to one of the most successful cruise lines in less than eight years is now the corporate management of Regent."



Yes, it seems Drinking the Kool-Aid just might be something that is happening.

To be sure I need to see more consistency in cuisine and service and I do have some problems with the pricing being far to high for what I consider value, but HUGE improvements have been made at Regent and I believe it will continue to get better.  And, it seems, now there are guests that believe it too!