Fixing Carnival Corp and its Brands

[Tarpeian Rock]

I find some of these posts a little peculiar when focusing on a perceived blemish in HAL's management and marketing strategy. When only 8 months ago it was widely publicized that CCC's, CEO, Donald instituted a massive reorganization which merged the upper hierarchy of Princess, HAL and Seabourn. Donald put the current CEO of HAL, Stein Kruse, in charge of this consolidation, as CEO of, get this, the new "Holland America Group". Guess Donald didn't get the message that Kruse was an abysmal failure taking HAL down the rat hole.

 

"The newly formed Holland America Group will include Princess Cruises in their portfolio of companies. The expanded division also includes Holland America Line, Seabourn Cruise Line and Holland America/Princess Alaska land operations. The new Holland America Group operates a combined total of 41 cruise ships with over 36,000 employees worldwide. Stein Kruse, currently president and CEO of Holland America Line, is being appointed CEO of the Holland America Group, adding to his current responsibilities of Holland America Line and Seabourn."

 

http://maritimematters.com/2013/11/executive-shuffles-at-princess-carnival-and-the-new-holland-america-group/

 

 

 

Except that what may be a "rat hole" to some (say, pax) can also be music to the ears of others (say, Wall Street analysts eager to hear corporate plans to remediate unhappy quarterly results).

[AZNative2000]

You cannot keep building ships with the cruise market down and reduced cruise prices...........especially Carnival Line it self' date=' with some vessels and cruises at almost give away prices.

 

RCCL is also having problems, discounting prices, but they just cut steel for the next monster (Oasis) class vessel(the 3rd) and have ordered the 4th. I think thy are way to big, but they must have a market for them

 

NCL is building new ships but not trying to grow in size. That way they can still offer reduced prices and sell many cabins.

 

AKK

As has been said many times ... the "new" market is China. As their economy continues to balloon, millions of new customers are being created and the mega-ships will fill quickly there. (Not just RCI but NCL's new ships that carry over 4000.)

[Tonka's Skipper]

As has been said many times ... the "new" market is China. As their economy continues to balloon, millions of new customers are being created and the mega-ships will fill quickly there. (Not just RCI but NCL's new ships that carry over 4000.)

 

 

 

That is very likely their hope, but CHINA economy is having issues and they may find that those millions of new customers may dry up. In any case they will likely send the older vessels to the east first.

 

My real point on the monster ships was more that they are just to big in size, I have questions about they safety.

 

AKK

[cbr663]

Mr. Donald certainly has his work cut out for him. The goal of having passengers spend $20 more per day seems reasonable enough, but there are many challenges to achieving that goal.

 

Here is the link to a pdf of a presentation given by John Tercek, CEO of RCCL that highlights some of the trends and challenges facing the industry: http://www.cruising.org/sites/default/files/leadershipforum2013/3B.pdf

 

Seems that the North American Emission Control Area are going to have a tremendous impact on the industry. It would seem that higher fuel costs are inevitable, and of course this will mean higher passenger cruise tickets. This could potentially change the industry in Alaska and Canada - New England.

[Typhoon1]

Is HAL's new Pinnacle Class Ship due to join the fleet in 2016 or 2015?

 

Last time we heard 2016. But, I'm starting to think that may be pushed back when you consider that pace they are going at.

[AZNative2000]

My real point on the monster ships was more that they are just to big in size' date=' I have questions about they safety.

 

AKK[/quote']I couldn't agree more. For me, I have no desire to cruise in a floating city divided into "neighborhoods" with more restaurants than the total of meals in a week. In an emergency, exactly how long might an evacuation take?

 

I'd rather spend a week on an island (Maui) than one of the "mega-ships". It is quite silly (to me) to think about having a balcony cabin on a ship from which you can't see water and overlook a "park" instead.:eek:

[iancal]

Agree. No interest whatsoever.

[bishop84]

Structurally, Stein Kruse is CEO of the new Holland America Group, which will include oversight of Holland America Line, Seabourn, Princess Cruises, and Holland America & Princess Alaska land operations.

 

This all took place in 3Q 2013, if I remember correctly.

 

The Holland America Group operates 41 cruise ships with over 36,000 employees worldwide.

 

Kruse also replaced Micky Arison as chairman of the board of MANCO, the UK-based entity which oversees operations of Carnival Australia including P&O Cruises, the number one cruise line in the Australian market.

 

So you have two operating units headed by the same executive.

 

Make sense? (If this is hard to follow, go look at the structure of General Electric or AT&T. Your head will bulge at the sides before exploding.)

 

Just to confuse it a little more is that MANCO includes P&O Cruises Australia but not P&O Cruises UK which is part of Carnival UK along with Cunard.

[casamariposa]

Perhaps I'm wrong, but I've always thought it strange that Carnival Corp. is maintaining two cruise lines....HAL and Princess...that are fighting for the same demographic. How long could that go on?

[POA1]

Just to confuse it a little more is that MANCO includes P&O Cruises Australia but not P&O Cruises UK which is part of Carnival UK along with Cunard.

 

I never said it was going to be pretty.:) I was just trying to explain things in North American terms.

[POA1]

Perhaps I'm wrong, but I've always thought it strange that Carnival Corp. is maintaining two cruise lines....HAL and Princess...that are fighting for the same demographic. How long could that go on?

 

Lexus. BMW. Mercedes Benz. Cadillac.

 

It might be awhile.

[cbr663]

Perhaps I'm wrong, but I've always thought it strange that Carnival Corp. is maintaining two cruise lines....HAL and Princess...that are fighting for the same demographic. How long could that go on?

 

I agree with you. Sort of reminds me of GM and its Pontiac and Oldsmobile brands. The lines started to blur between the brands.

 

Also very similar to Ford in the 1990s. Ford also went through a period of growing the company and its revenue by buying Land Rover, Jaguar and Volvo. It didn't work and Ford later sold these brands.

 

Most of Carnival's brands have had to endure lower ticket prices in the past several years. The challenge is whether the lower ticket prices have dragged on too long? Will passengers ever go back to paying a higher fare?

 

HAL appears to have decided not to expand its capacity in the NA market. Its decision to deploy 2 ships to another brand and have the new Pinnacle Class fill the void could be an indication of things to come. Could we have a smaller HAL on the horizon?

[igraf]

I don't see the correlation between the ship's age and the quality of the cruise (dining, entertainment, activites, ports of call).

 

The only real difference is the larger sizes, and thus economy of scale, of the new ships.

 

igraf

 

 

 

 

Refitting is fine to a point' date=' but the age of the fleet will catch up sooner or later....

AKK[/quote']

[Ship's Wake]

Mr. Donald certainly has his work cut out for him. The goal of having passengers spend $20 more per day seems reasonable enough, but there are many challenges to achieving that goal.

 

Here is the link to a pdf of a presentation given by John Tercek, CEO of RCCL that highlights some of the trends and challenges facing the industry: http://www.cruising.org/sites/default/files/leadershipforum2013/3B.pdf

 

Seems that the North American Emission Control Area are going to have a tremendous impact on the industry. It would seem that higher fuel costs are inevitable, and of course this will mean higher passenger cruise tickets. This could potentially change the industry in Alaska and Canada - New England.

 

Higher cruise tickets will mean less bookings.

 

Which means another round of cutbacks or a gradual reworking of the product where meals are no longer included.

 

It's sad to see all this play out - all of us are getting to experience the continued reduction in the quality of product being offered due to the stagnant economy.

[sail7seas]

Higher cruise tickets will mean less bookings.

 

Which means another round of cutbacks or a gradual reworking of the product where meals are no longer included.

 

It's sad to see all this play out - all of us are getting to experience the continued reduction in the quality of product being offered due to the stagnant economy.

 

 

Interestingly, (at least to me) is the idea that the low cruise ticket prices may be a reason some people don't book a cruise.

 

For those who pay a lot for the higher priced cabins, they may be at a point where the cruise may no longer be a good value for the money they are spending? Perhaps the lowering of quality of the product discourages some people who might have considered booking but are not accepting of so many cutbacks?

 

Anyone see that as possible?

 

[iancal]

I would think that those people would simply abandon the mass market lines-HAL, Celebrity, Princess- and move up to the higher end cruise lines.

 

And I strongly suspect that the people who do that would get much better value for their money on the higher end lines.

 

If we were going to pay top dollar on a high end cabin I suspect that it would not be on a mass market line.

Edited June 6, 2014 by iancal

[sail7seas]

Some don't like the small ships most of the luxury lines sail. The smallest ship I like is the "S" class. Prinsendam even seems a tad smallish for me. I know Crystal sails larger ships but that is definitely not a cruise line for me.

I'm also not so sure I'd be happy with the atmosphere aboard some of the deluxe lines. Luxury resorts might be benefitting from some of the cruise lines' cutbacks.

Edited June 6, 2014 by sail7seas

[cbr663]

Higher cruise tickets will mean less bookings.

 

Which means another round of cutbacks or a gradual reworking of the product where meals are no longer included.

 

It's sad to see all this play out - all of us are getting to experience the continued reduction in the quality of product being offered due to the stagnant economy.

 

I agree. So imagine the challenge of trying to pull your customers away from low ticket prices while also having to incur extra costs due to the regulatory environmental changes, all while trying to reverse the decrease in passenger ticket sales.

 

Companies in a mature market like the cruise industry generally embrace two options: reduce costs or innovate. It would appear the cruise lines like RCCL and NCL have chosen to innovate with its offerings. Even Celebrity has upped its offerings with its new suite packages, more dining options, menus on iPads….I understand that these offerings do not appeal to everyone, but they are considered innovative lines.

 

Even more interesting is the CLIA's identification of 2014 trends: more emphasis on technology, more food choices, more excursions and more time spent in port, newer ships, growth in Millennials cruising, more all inclusive options, multi-generational and family cruising, and active vacations at sea with high energy onboard activities.

[kazu]

Mr. Donald certainly has his work cut out for him. The goal of having passengers spend $20 more per day seems reasonable enough, but there are many challenges to achieving that goal.

 

Here is the link to a pdf of a presentation given by John Tercek, CEO of RCCL that highlights some of the trends and challenges facing the industry: http://www.cruising.org/sites/default/files/leadershipforum2013/3B.pdf

 

Seems that the North American Emission Control Area are going to have a tremendous impact on the industry. It would seem that higher fuel costs are inevitable, and of course this will mean higher passenger cruise tickets. This could potentially change the industry in Alaska and Canada - New England.

 

I saw that article today - if I could get away with spending $20 per day that would be the day;)

[iancal]

Today, 7 day June Alaska cruises from Vancouver on Oosterdam, Zaandam or Statendam are being offered on a popular on line TA site for $299 and $399 for an inside cabin. $599 and up for a balcony.

[kazu]

Some don't like the small ships most of the luxury lines sail. The smallest ship I like is the "S" class. Prinsendam even seems a tad smallish for me. I know Crystal sails larger ships but that is definitely not a cruise line for me.

I'm also not so sure I'd be happy with the atmosphere aboard some of the deluxe lines. Luxury resorts might be benefitting from some of the cruise lines' cutbacks.

 

Never say never until you try her Sail.:D

 

Small is all respective - remember not as many passengers and more public space per person than the S class ships.

 

I would have never thought we could do it until we tried it. It's a whole different world and a nice one at that. Each has their advantages but DH said 'AGAIN' when I told him the itinerary and then told me to book it.

 

Love the ship and it has taught me that I can do the smaller luxury lines if we decide to do that. You should really try it just once.

[cbr663]

Interestingly, (at least to me) is the idea that the low cruise ticket prices may be a reason some people don't book a cruise.

 

For those who pay a lot for the higher priced cabins, they may be at a point where the cruise may no longer be a good value for the money they are spending? Perhaps the lowering of quality of the product discourages some people who might have considered booking but are not accepting of so many cutbacks?

 

Anyone see that as possible?

 

 

If the CC forums are any indication, I think that it is happening more and more. I think that there are people like us who paid full price for a Neptune Suite and found it lacking and now will book veranda and SS suites. I also think that many have left the brand due to the cutbacks and have found a better experience elsewhere.

 

It's a personal choice, but brand loyalty is a quickly fading concept. Consumers are finicky and are very quick to switch when a brand no longer meet their needs. Just yesterday in a Canadian newspaper was an article on brand loyalty and a recent survey showed that 74% of Canadians had switched from their preferred brands in the previous year. Consumers are well informed and are more likely to investigate the real value of products and services rather than rely on logos, history, or even reward programs. It was even noted that brands that rely on points and rewards programs risk having its customers loyal to the reward program and not the brand itself. The result is that customers become loyal to the perks or the discounts and not the brand.

 

I think what HAL is discovering is that it cannot coast on past performance. The perception of the "premium" status must be real or customers are not going to pay for it. The fact is that most will eventually compare HAL to Princess, Celebrity and Oceania and there is more than enough information out there for passengers to make an informed decision.

[SJSULIBRARIAN]

For those who pay a lot for the higher priced cabins, they may be at a point where the cruise may no longer be a good value for the money they are spending? Perhaps the lowering of quality of the product discourages some people who might have considered booking but are not accepting of so many cutbacks?

 

 

 

We used to book Neptune Suites all the time, but recently find we are quite content in Vista suites or less cabins. The Neptune Suites are not really worth the additional cost to us anymore, especially since we are 4 star and almost 5 star Mariners.

[sppunk]

Senile we don't book insides and only oceanviews when balconies aren't on the ship, we much prefer the worst cabin on the best line opposed to best cabin on a mediocre line. I don't think we are alone.

[iancal]

We feel the same way. And that is where the real value is.

Edited June 7, 2014 by iancal