Wednesday, November 6, 2013

Cruise Industry Shake-Ups - What Does It Mean To The Cruise Guest? Are They Really "Shake- Ups"?

Is there a rogue wave, rough seas or just another rite of passage in the cruise industry?


What I do know is that there have been wholesale changes at the top of many cruise lines in the past few days:

  • Crystal Cruises - Longtime president, Gregg Michel, is out and Edie Bornstein, formerly of Cunard/Seabourn, then Carnival, then Azamara Club Cruises, and now Crystal, is in, but for how long?

  • SeaDream Yacht Club - Pamela Conover was brought in as CEO under the guise of bringing structure, order and operations to this quirky little cruise line, but she resigned...apparently because this quirky little cruise line's quirky owner, Atle Byrnestad, was over-extending his meddling...again.

  • The Holland America Group - Carnival Corporation has become so large and so diverse that having one umbrella apparently is insufficient. With Stein Kruse, known for his authoritarian rule, expanding his "empire" to include not only Holland America and Seabourn, but now Princess....and he is taking over Carnival's MANCO (a UK based company) which runs the Australian operations as well, the name, The Holland America Group, scares me. Alan Buckelew, formerly heading Princess, moves up to the new role of COO of Carnival Corp. & plc. (which owns all of the Carnival brands).  Meanwhile Jan Schwartz, moves to President of Princess Cruises (as Alan Buckelew moves up) from her former position as Princess's SVP of Sales, Marketing and Customer Service.

  • Howard Frank, the right hand man to Micky Arison for a quarter of a century, is finally taking a bit of a back seat (as has Micky Arison); a move, after dining with he and is lovely wife a few times,  I knew would be coming...and is well-deserved.
There is actually more that has happened as well, but as it relates to the cruise passenger or guest experience, I think we have enough to work with.

The Unspoken Concern

Too much has happened at one time.  Yes, this is the slower season, so making moves now makes a lot of sense.  But, of course, the question is, "Why are there so many big moves by so many cruise lines at essentially the same time?"  If things were great I am confident changes of these magnitudes would not be happening.  I know where there are financial or operational weaknesses, but never did I think they were to this extent.

But even with this undercurrent, what is happening is not "Out with the old and in with the new."  Why do I say this?  There is nobody new, but rather - as per usual - musical chairs in the cruise industry.   If you look at the moves, there is no "new blood", there is no "darling of the industry" who has risen up.  In fact, what I find more interesting is that there are a number of people, such as Rick Meadows, who holds the dual role of President of Seabourn and Executive VP of Holland America that haven't been included in the mix. To me it is more a kin to grocery stock being rotated than "new and improved" filling the shelves. 

Stay tuned!

The Holland America Group - Huh?

Possibly more telling regarding the Carnival moves is that the Stein Kruse is running: The Holland America Group.  I understand Stein's rise in the ranks.  While we don't agree on all that much when it comes to Seabourn (a very special luxury cruise line) which struggled at the beginning of its time under his rule, but is now succeeding nicely in most areas, he does run a tight ship...a very tight ship.  

Stein's rise to more power doesn't really concern me.  What I struggle with why it is called, "The Holland America Group"?  I mean "What the heck does 'Holland America' have to do with 'Seabourn' or 'Princess'".   There are so many names that could have been used.  Ones with international flair.  Ones with little to no meaning.  Ones that noted the individuality of the various brands.  But, instead, The Holland America Group. 

(Note:  For years HAL and Princess...and then Seabourn...have - along with Cunard - shared POLAR, the reservations system...tweaked for each brand.  The basic portal had been through a Princess-flavored site, but that has somewhat faded away.  But similarly, it is something that was never "public" nor affected the brands individuality.)  

Thus there are two words that immediately come to mind:  Homogenization and Increase.  

Homogenization - While I understand there are definite benefits from shared back-office operations, there are detriments as well. Policies are put in place because large operations need consistency or the lower level staff and computers (sometimes the order changes, but not the concept!) can't readily deal with personalized handling of guests situations.  Or operational situations.  Or maintenance situations.  Or provisioning situations. Or...

As an example, when Holland America  took over the Seabourn's land offerings, the staff - even though designated as "Seabourn" - didn't have a clue as to what a luxury tour's requirements were.  I literally spent hours complaining, fighting, training, assisting, etc. because I was not going to have mass-market tours being presented to my clients as being luxury experiences.  (You know my thoughts about how another luxury line has actually done that...and it isn't good.)  

And, with The Holland America Group in charge, are there going to be staff cuts as a result of such "efficiencies"?  And for those folks (guest and travel agents) who are not computer-savvy or require individual assistance, how is that going to impact wait times...not only on the phones, but in getting issues resolved?

So now I wonder what is going to happen in one of the most competitive markets:  Alaska.  Holland America has some great infrastructure and so does Princess.  Are they going to be combined or interchanged, swapped, shared?  Will you only be able to tell the difference between the product by the huge television screens by the Princess pools or the age of Holland America's guests?  To be sure there is a whole lot more in common between Holland America and Princess than either brand with Seabourn, so spending money on making the distinguishing factors relevant may be counter-productive.

Want to talk about Europe now?  Let's just say I don't see much of a difference in approach...especially since the weakened European economy and high cost of airfare from the U.S. has really hurt the cruise market there.

Increase - What I smell from The Holland America Group (again the name greatly concerns me!), is that there will now be a way to subtly and with sophistication turn what was a rather healthy sister-company price competition into more of a ballet between two brands.  I am fairly confident what you will see is a coordination of "sales", marketing and itineraries which will reduce competition; which is the primary factor motivation price reductions.  Less Competition = Higher Prices.

Rough Seas at SeaDream Yacht Club

Shifting sails, you know I had recently become a fan of SeaDream Yacht Club,   in part because of the stability Pamela Conover brought to SeaDream.  I really like the product, but Pam Conover's resignation scares the heck out of me.  If Pam is one thing, she is a fighter and when I see her give up the fight, it is cause for real concern.  

Back in 2009 I wrote the article: SeaDream Yacht Club - Is a Nightmare Looming? about how Atle Byrnestad was manipulating SeaDream's finances to support his other, failing, companies through various turmoils.  There is a reason that, to this day, it is one my most read articles.  

I also wrote another article: in October 2008:  Troubled Waters on the Luxury Cruise Front...and A Safe Harbor: Seabourn.  In that article I wrote, in part:

Now SeaDream has announced a "Cancel Anytime Within 48 Hours of Departure and Get a 100% Credit" toward a future cruise within 18 months thereafter.  This is, again, very scary...and SeaDream is quite a fine product. SeaDream had always prided itself on its charter schedule being its base.  But charters are drying up as corporations are not making the same profits and perceptions of such expenditures are presently more negative then positive.  Being a unique product it is not the easiest cruise experience to get people to consider and, honestly, not many travel agents even think about SeaDream as an option.  With its new program, a more aggressive play on the new Crystal approach, SeaDream will keep your cash so that it operates today with a (hopefully) positive cash flow and worry about what cruise you take later.  Clearly this short-term strategy is worrisome.

But now my concerns are back.  As much as Pamela Conover stands for "stability" Atle Byrnestad does not. I am, without question, taking a step back and taking more than a "wait and see" approach, but rather a "look long and hard" approach.

Crystal Cruises - A Shining Star????

Finally, I look at Crystal Cruises.  I thought something might be up when I heard whispers of Edie Bornstein being on a Crystal cruise a while ago, but honestly with my less than thrilling experience attempting to work with the AZAmazing sales folks at Azamara Club Cruises (too many times of "We really want to work with you" followed by silence), I didn't think much of it.  

What I have been impressed with is the work of Jack Anderson bringing Crystal into a rather dynamic fold and, at least to me, based upon price and quality, a better product and value than Edie's former charge: Azamara Club Cruises.

So what does Edie Bornstein bring to Crystal Cruises as its President?  I am not sure.  What I am sure of is that she had no interest in speaking with me - the only such premium or luxury cruise line executive - at the just finished Ensemble Travel Group International Convention.  (Sounds like my experience with Azamara doesn't it?!)

What I do hope is that she doesn't bring Azamara's approach to much of anything, but that she focuses on cross-branding with suppliers (spa, amenities, etc.); something she has a history of success with.

Conclusion

In conclusion, on this rather long article, I am concerned for you, the cruise guest.  One thing is for absolute certain:  If you think booking directly with a cruise line is to your advantage or that booking with an online discounter is in your best interest, think twice...no three times.  Ask yourself, "What is it worth to navigate this minefield without the assistance of a truly knowledgeable and connected travel agent/professional/consultant (or whatever you are supposed to call me!).

What to cruise knowing you have the best information?  Give me a call at (877) 2GO-LUXURY or email me at eric@goldringtravel.com