Der Club Schiff der Britischen

Now as I last covered Virgins Cruise Dream, and how in 2003 they may have been knocked off course by Island Cruises and Ocean Village Cruises. However it would appear that these cruise lines never throughly took to the market and neither are still operating, despite there apparent German counterpart Aida going from strength to strength.

The ‘First Time’ cruise market which these ships mainly catered for had three cruise options to choose from in 2007 Island Cruises, Ocean Village Holidays and Thomson Cruises. These lines operated in the 3-4 star bracket, and the ships were all over 15 years old.

Island Cruises was formed by Royal Caribbean and First Choice Holidays in 2001, starting operations in 2002, targeting the British cruise market with Island Escape, a former cruise ferry which had operated with a variety of cruise lines.  During the launch the ship starred in the ITV show ‘Cruise Ship’ an Airline-esque tv show highlighting the ups and downs of cruising.

Island Escape was joined by Island Star in 2005, purpose-built as a cruise ship for Celebrity in 1990 this seriously improved Island Cruises product, with the new ship having Balconies and a large refurbishment prior to entering service.

However following the merger of TUI Travel and First Choice into TUI TRAVEL GROUP PLC which bought Island’s part owners into the same group as Thomson Cruises the line was disbanded, with Island Star going to Pullmantur and Island Escape joining Thomson Cruises.

Ocean Village was founded by P&O Princess Cruises PLC, a move which saw Arcadia transferred from P&O. Essentially a British adaption of Aida Cruises, Ocean Village was marketed as the ‘Cruise for People who Don’t Do Cruises’. It was this tag line that encouraged my parents to risk their hard earn wages to go cruising. As a safety anchor we did a week on land staying a Majorca, but more on our Ocean Village cruise next week. 😉

Following the merger of P&O Princess Cruises PLC and Carnival Corporation into Carnival Corporation & PLC (yes Dual Listed, a Anglo-American company!) Ocean Village received Aida Blu as Ocean Village Two in 2007. Then there was further talk of Oceana joining as Ocean Village Three, but this did not happen.

In 2008 it was announced that Ocean Village was to be disbanded by 2010, as the ships would generate a higher profit in Australia, who’s cruise market is booming, Ocean Village and Ocean Village Two where to join P&O Cruises Australia as Pacific Pearl and Pacific Jewel respectively.

Why didn’t we cruise Ocean Village again? I hear you ask. Well with the itineraries not having significant variation, and one of the great things about a cruise is the variety of destinations, our attention was drawn to other lines.  But I think Ocean Village provided a suitable stepping stone to jump into cruising, something which no other line has effectively filled.

Both Cruise Lines, Island Cruises and Ocean Village provided a more informal cruising atmosphere, however since their founding nearly 10 years ago there has been a shift in the traditions of the more traditional cruise lines, with ‘Anytime’ dining, relaxed dress codes and changes in Entertainment offered onboard.

Furthermore the British Cruise market has changed, Independence of the Seas sailing year round from Southampton, this still shocks me, this ship is huge and sails year round! There are less ‘new cruisers’ than before, and the cruise ships sailing for the British Market; Ventura, Azura, Independence of the Seas & MSC Opera, are better than ever before!

What was your experience of Ocean Village & Island Cruises? Facebook, Twitter, Comment and Email

Thanks,
Liam
-Liam@Crociere.co.uk
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Links of Interest
http://www.dailymail.co.uk/travel/holidaytypeshub/article-588844/Read-cruise-ship-hell-continued.html

Improving Yield & Reducing Costs at Carnival

This blog is a long one, and based on what I currently understand about Carnival Corporation & PLC, as well as economic principles which I learnt in sixth form and at Maersk Line during yield management. There is no doubt flaws, but I’m a student, so tell me what you think.

Carnival is an amazingly successful business, which has delivered strong earnings and growth, however its internal set up confuses me as an outsider and I just feel that there is an easier way to do business. I have used the three main headings: Intergrate, Outsource, Internationalise.

Aim

The aim of this report is to suggest possible options on how to improve clarity in how Carnival Corporation & PLC operates, as well as reduce costs and improve yield. Basically if I was Micky Arison I would do this…

Intergrate

As a legacy of being separate companies Carnival appears to operate semiautonomous divisions namely:
Holland America Line – Seabourn and Holland America
Princess Cruises – Princess Cruises
Costa Crociere – Costa Cruises, Aida Cruises, Ibero Cruises
Carnival UK – Princess Cruises UK, Cunard, P&O Cruises, P&O Australia
Carnival Cruise Lines – Carnival Cruises

I would dissolve all these separate divisions, instead splitting the company into managing its business in regions, with Carnival UK managing all Carnival brands in the UK. In Europe, Carnival Europe (Costa Crociere) dealing with all Carnival brands in Europe and so on. I believe this is how Royal Caribbean operate, but again don’t know.

My example for Intergrate would be at Carnival UK were Holland America Line and Carnival Cruise Lines have separate offices from P&O, Princess and Cunard who are based in Southampton. HAL and CCL are based in London, surely there is enough space, perhaps by moving some desks round to combine the offices in Southampton, releasing expensive office space in London.

Another example being Holland America and Princess who are both on America’s east coast, I would combine the offices, there would be duplicated jobs which could be removed, HR, Payroll, Purchasing. I would also centralise many departments under the corporate banner.

As part of this integration I would effectively stop each brand being responsible for several functions they previously managed (as they had been centralised), there is a problem of the brands then slowly losing focus. But by creating Brand Ambassadors who would manage the marketing, and lobby the centralised functions for their brand could keep the distinct brand image. The brand ambassadors would be like a board of directors whose sole aim is to improve their brand.

Outsource

I’ve called this section ‘Outsource’ but it doesn’t necessarily relate to outsourcing. Firstly my example is that Maersk Line moved a significant amount of functions to Liverpool in order to move out of London, there was two reasons for this, the wages in Liverpool are lower than that of London, and there is also a large talent pool to choose from. Secondly office rental prices are MUCH lower in Liverpool, saving significant amounts of money.

In addition Maersk Line also outsourced functions which could be performed overseas in cheap countries to them countries, by implementing strong communications links between the offices, it became just as easy to speak to someone in India than someone across the office. Maersk also used Six Sigma to sort supply chain problems, but without working in the industry this would be impossible to consider applications for passenger shipping, but small changes in business operation yielded great results.

An example of outsourcing in the container shipping industry meant that online bookings which were previously completed by staff in the UK was transferred to lower cost countries, jobs which involve basic data entry made sense to move overseas as the internet has made such possible, easily.

I would pause from moving ‘contact centres’ overseas as people hate phoning overseas call centres and it can ruin a person’s opinion of a brand, which is what Carnival is building.

Internationalise

Carnival have previously commented that Cunard is their sole international brand, I believe Holland America and Seabourn both can be ‘internationalised’ under these new plans, which these larger possible audiences and the new corporate structure Carnival could charge higher prices, as the market for the product is larger, improving yield, also both of these fleet operate worldwide itineraries meaning there is no need for redeployment.

Why Holland America? – Well I believe there is no European equivalent to Holland America, and with an aging population in Europe I believe Holland America would make a great fit in the European market if more people where aware of the product. Its closest rival in my mind being Celebrity Cruises seem to be doing well in Europe naming Celebrity Silhouette in Hamburg earlier this year.

Why Seabourn? Again, Like Holland America I believe that Seabourn could, through bet promotion as part of the Carnival family improve sales in Europe, Asia and Australia. Its new ships providing a great opportunity to go worldwide.

The theory behind ‘Internationalise’ is that of Kraft’s purchase of Cadbury, which then allowed Kraft’s brand of chocolate ‘Milka’ to piggy back into news agents and supermarkets on the back of Cadbury’s Dairy Milk.

Summary

I believe that Carnival is taking slow steps towards this model, as in the United Kingdom Carnival UK represents Princess Cruises, but this could just be a legacy of how the former P&O Princess used to operate. I expect Carnival already outsources a lot of functions already. 

I think the plan outlined above would work, and simplify the Carnival product line up, It would be great to hear from someone at Carnival on what they thought of my plans and suggestions.

Well I’m not sure how this one will go down, viewing figures for some blogs have confused me in the past week. The stuff i thought would be popular hasn’t been! (I’m not expecting this to be too popular) But Ship Visits always go down well!

Let me know what you think! Twitter, Facebook, Email & Comment. If you liked this Try: Cruise Line Brand Posistioning & Where Does Princess Fit?

Thanks,
Liam
Liam@Crociere.co.uk
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Out with the old and….In with the refurbished?

As the Global Economy has stalled, cruise line have worked hard to keep vessels full, and weather the storm. Carnival axed its dividend…Royal Caribbean …er… got the Worlds two largest cruise ships drastically increasing capacity… okay, bad example. (We have a blog for that)

But as the growth of the industry has created a market of ‘large players’ namely Carnival, NCL/Apollo/Star, Royal Caribbean and MSC. The number of smaller-medium sized players have disappeared. This has been great as it has stabilised prices (as these smaller lines where heavy discounters). However the large players used the smaller players to dispose of excess capacity, such as the Song of Norway-era vessels.

However in the late 90’s and early 2000’s Festival, Royal Olympic, Regency, Premier and American Classic Voyages all collapsed into bankruptcy. These are the companies who would have purchased the excess capacity from the growing lines.

This has meant that lines have had to place tonnage elsewhere, the easy card has always been Australia, Asia and Europe. Pullmantur has seen a series of transfers from Celebrity and Royal Caribbean. Ibero Cruceros, Carnival’s Spanish brand, has seen a few vessels transferred from Carnival Cruise Lines, as they are no longer competitive in the Caribbean.
Once the worlds largest cruise ship, Voyager of the Seas has been sent to Asia in search of higher yields. (We have a blog for that too!)

The Norwegian Dawn has become the unwanted cruise ship, at an inappropriate age that no cruise market wants her, she has been idle for a few years now and is in ownership of Star Cruises.

Recently this has meant that cruise ships are having expensive ‘refreshment’ programs, keeping them up to date with the other vessels in the fleet. Royal Caribbean has launched a $300 Million refreshment of its fleet bringing aspects from the Oasis class across the fleet, this is widely covered on other websites and blogs, Royal Caribbean is calling it the Royal Advantage program. Interestingly Monarch & Majesty of the Seas are not on the refurbishment list, We expect them to join one of RCI’s other brands.

Carnival has been refurbishing the Carnival Fantasy ships, adding amazing water parks to the ships. Other lines have also been engaged in this such as Celebrity following the arrival of Solstice, and Holland America performed a ‘Signature of Excellence’ refurbishment across the fleet to standardise the product.

So cruise lines are having to keep hold of ships longer, and refurbish them to maintain standards and expectations across the brand, this is due to variety of reasons namely:
– Few middle tier players to sell to (Louis being the main)
Over capacity in the Med, leading to falling yield

But we are hearing great reviews following the refreshment of these ships such as Radiance of the Seas and Grand Princess. So long may it continue.

Please comment, email, follow us on Facebook and twitter! You can keep upto date with all are goings on!

Thanks,
Liam

Liam@crociere.co.uk
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