Tuesday, August 12, 2014

Regent Seven Seas Cruises - Reported Earnings for Second Quarter 2014: A Lesson In Making the Bad Seem Good

Today Regent Seven Seas Cruises, the world's most expensive (and purportedly most inclusive) cruise line, announced its earnings for the second quarter of 2014.

I find it interesting that in its press release Chairman and CEO, Frank Del Rio stated, "We are pleased with our financial results, including record revenue... In July, construction began on Seven Seas Explorer [which] marked the beginning of what we believe will set the standard for luxury cruising when Seven Seas Explorer joins the fleet in the summer of 2016. Our strong financial performance and new construction are a reflection of our commitment to providing our guests with an extraordinary experience."

I, of course, pause.  And then I ask, "OK, with 'record revenue' how is it that you parlay that into 'providing our guests with an extraordinary experience'?"  So I took a harder look at the figures!

The first thing I saw was that occupancy was down to 95.4%...from 96.9% for the same period last year.  But then I saw that the available guest nights were also down almost 3% since the Seven Seas Mariner was in dry dock this past April.  That means last year there were 166,658 guests and this year there was 160,071 guests.  Sooo....Regent Seven Seas generated record revenue with 3.6% less passengers.

What does that mean for you, the cruising public:  Regent is charging a whole lot more and over this past year it has not provided you with much of anything extra...other than a larger bill.  (Yes, Regent' did have a "big" announcement that for its highest paying guests it was giving free internet.  Not so big, huh?) I am just not sure how that amounts to providing its "guests with an extraordinary experience".

Let me be fair:  Regent Seven Seas provides most everything in hardware that you might want.  It provides you with tours that some love, but many think are too far too basic and far too crowded and for which you pay for whether you take them or not. It provides you with very nice suites as well.

But where Regent Seven Seas consistently fails is service, service and cuisine.  (Did I mention service twice????)

I regularly receive unsolicited emails from people telling me that they wished they had read my articles before they took their Regent cruise and then they go on to complain about the service and the cuisine. (OK, one of my last emails said that after five cruises, they did notice the cuisine had improved.  Not sure I would take five cruises with marginal food, but the marketing of all the alleged "free" stuff works!) Note that my most read article on the subject was written four (4) years ago...and it still is ringing true.  I don't consider that to be a good thing.

To me this signals an even larger problem:  Why would people be finding my articles AFTER they have cruised on Regent?  The answer is, obviously:  Dissatisfaction.

So Regent's reduced occupancy on reduced capacity says one thing.  And its record profits off the backs of less passengers says something else.  I receive emails from sites pitching the world's most expensive restaurants and hotels.  I am sure there is a market for those that want to claim spending the most money for something, but honestly, that is not Goldring Travel's market and I, personally, don't want to be in the business of price gouging.

Goldring Travel is in the business of assuring its clients receive the best value on the cruise or land vacation that meets and, hopefully, exceeds their desires.

Frank Del Rio, please tell me what exactly is it that you are providing your guests that makes it "an extraordinary experience"?

Wednesday, August 6, 2014

Goldring Travel Quoted In Travel Market Report Article on Luxury Travel

Eric Goldring, of Goldring Travel, was recently interviewed by Travel Market Report on the trends in luxury travel.  It is an interesting article (of course!) and I hope you enjoy it.


For Luxury Cruise Sellers, Times Are Good

As the consumer market for luxury cruises matures – and the cruise lines’ diversify their product and pricing models to meet demand – times are good for luxury cruise sellers.

Agents report brisk sales. They also note an ever-lengthening booking window, as clients look to secure a space in the face of tight supply.

Luxury cruising, and especially luxury river cruising, is becoming more attractive for vacationers who have more time and money to spend on a trip, regardless of their demographic, agents told Travel Market Report.

Clients are booking far into 2016. And they’re taking advantage of the greater choice offered by today’s luxury lines – ocean and river cruise alike.

“The luxury market is maturing,” said Eric Goldring, owner of Goldring Travel in Colts Neck, N.J. “The market is 20 years old, and that’s about a generation; people now in their 60s and 70s have done the traditional luxury cruise, and they are looking for something new.”
In search of variety
“Many of my clients are those who have ‘been there and done that,’” said Mike Brill, a Cruise Planners agent from Palm Springs, Calif. “They’re looking for something more intimate and unique.”

Luxury vacationers have already been to Europe, long the go-to destination for luxury cruises, and now they want something more exotic – and that’s benefitting travel agents.

“Our business has really been driven by what is new and different. Luxury is moving toward new destinations,” said Scott Caddow, owner of Legendary World.

At the same time, Caddow said, “most of our clients are pretty brand-loyal, so they want the same cruise experience” – to new parts of the world.

Mediterranean always strong
Michael Consoli, a Cruise Planners agent in Roswell, Ga., said that for him “Mediterranean cruises always seem to be the biggest draw for the luxury market.” Certainly for clients new to luxury cruising, Europe remains a solid bet.

But Consoli said he is also seeing “big interest in the Galapagos because of the environmental regulations and changes coming to that area of the world in the next few years.”

Agents also mentioned Antarctica, the Arctic Circle, Africa and South America as attractive new destinations for the more-experienced luxury cruiser.

Multiple deposits
The booking window for luxury cruises remains long due to strong demand coupled with limited product.

Some luxury clients are so concerned they’ll miss out on their preferred cruise that they’re making deposits on multiple cruises, and deciding later which of the trips they’ll actually take.

“My clients will book two or three cruises and end up taking one or two cruises in the end,” said Caddow. “Cruisers are getting smarter about itineraries they book.”

In response, some cruise lines are tightening their policies on refundable deposits to try and rein in this type of shopping.
“Cruise lines are now trying to combat people who have a history of cancelling,” said Goldring. “Lines like Regent and Oceania have increased the cancellation penalties, even right from the start.

“But I’m still seeing lots of bookings made far in advance,” Goldring added.

All-inclusive craze
While pricing is slightly up, luxury lines are also driving revenue by offering cruise passengers more opportunities to pre-book add-on packages and excursions.

“The lines are trying to make the more-upscale product all-inclusive, by making you buy before you get onboard,” said Mary Ann Strasheim, ACC, owner of Custom Cruises & Travel, an Ensemble agency, in Omaha..

By adding value to their cruises with new initiatives, the lines are doing an effective job of attracting demand. And the adds-on are usually commissionable.

“Regent is one of the better all-inclusive values,” said Caddow.

The all-inclusive packaging appeals especially to those who like to integrate land tours with their luxury cruise experience, as well as to customers who are used to paying for everything upfront.

“We have clients who move to a cruise from land vacations, and they would rather just have everything paid for” instead of paying as they go, Caddow said.

Itinerary changes
Some luxury lines are adapting their itineraries to include longer port stays in a response to travelers’ desire for more in-depth experiences of destinations during a cruise.

“Most luxury travelers don’t want to move from place to place on land, but they do want to get a taste of the culture and say they’ve been to a destination,” said Goldring.

“Cruise lines are also doing more over-nighting because it is a cost-savings for them, since they’re not moving the ship,” Goldring said.

Pricing remains solid
Today’s luxury cruise clients are willing to spend more, according to agents, and the lines are rolling out longer, and more expensive, itineraries to take advantage. This means higher commissions for agents.

“More lines are beginning to offer world cruises,” said Strasheim. “Retirees have more time on their hands, and they are asking why they should buy a winter home when they can travel the world instead.”

To entice would-be cruisers looking for a deal, the luxury lines are throwing in value-adds, rather than lowering prices, agents noted.

“The luxury lines are masters at adding value to this product without degrading their pricing model,” said Consoli.  “So they are offering air incentives, free hotel nights, Internet packages and onboard credits to encourage early bookings.”