Posted by: cruise2 | 4 July, 2011

How Will Brands Affect Cruising?

by Kevin Griffin – The Cruise People writing for cybercruises.com

A European cruise line executive was recently quoted as saying that while European cruise operators are more interested in the actual cruise experience, North American-based cruise lines are becoming “all about brands.” Whether he meant cruise line brands or the brands with which their ships are associated was not totally clear, but he probably meant both.

With the recent introduction of Dreamworks Animation to Royal Caribbean International and Nickelodeon to Norwegian Cruise Line, this seems to be quite true, at least with the big brands. Last week, just to confirm this, Royal Caribbean International surveyed a number of its past and recent cruisers on three or four dozen brands they are already associated with or thinking about taking on board.

Included in this survey were brands such as Coca Cola, Johnny Rockets, Dreamworks, Seattle’s Best Coffee, Bliss, Elemis, Chicago and Hairspray, just to name a few. Meanwhile, Disney Cruise Line has is its own in-house brand.

The only major line that now uses its own on-board branding seems to be Carnival Cruise Lines – and this in itself is significant. As Royal Caribbean and NCL add more and more brands and diversions to their ships, Carnival is positively beginning to look a bit more like a more traditional cruise line. It is even promising to offer more space per passenger in its new ships than RCI and NCL, who are retreating back to less space in their own new ships (see last week’s Cruise Examiner, “Back to the 30′s”).

But let’s step back just a moment and look at the cruise line brands themselves. The mission statement at the ten-brand cruise group Carnival Corp & PLC mentions brands: “to deliver exceptional vacation experiences through the world’s best-known cruise brands that cater to a variety of different lifestyles and budgets, all at an outstanding value unrivalled on land or at sea.”

To-day, the Carnival Group operates ten brands – Aida, Carnival, Costa, Cunard, Holland America, Iberocruceros, P&O Cruises, P&O Australia, Princess and Seabourn – and controls more than half the world’s total cruise capacity. More than 9 million a year cruise with these brands.

Some cruise groups are more confusing than Carnival though. For example, at first glance, many might think that Royal Caribbean International is the holding company and Royal Caribbean Cruises the brand, but in fact it is the opposite. Now, however, even Royal Caribbean has followed the Carnival precedent, and numbers five brands of its own – Azamara, Celebrity, Croisières de France, Pullmantur and Royal Caribbean,

Sometimes, as well, subtle changes have to be made. Recently, for example, Seabourn took delivery of three new 35,273-ton ships that each measure more than that most famous of post-war luxury cruise ships, the 34,183-ton Caronia, which was also known as the “green goddess.”

Yachts of Seabourn, as the line was called, had to decide that it was no longer operating just yachts and thus changed its name to simply Seabourn, a brand that anyway speaks for itself. About a year before that, Azamara Cruises had become Azamara Club Cruises to bring it a bit more upmarket and make it seem more exclusive.

Profits and margins are all about brands, market positions and relationships. When going beyond the individual cruise line brands, this is certainly true as well – if you find some brands on one cruise line, for example, one is increasingly less likely to be able to them on others. Brand relations such as Dreamworks with Royal Caribbean and Nickelodeon with NCL have become exclusive, as of course is Disney to Disney Cruise Line. In other cases, brands, such as Steiner, pay the cruise line for exclusivity on board, but are able to buy that exclusivity with more than just one cruise line.

One thing is certain, however, and that is that the presence of brands and the payments they make to the cruise lines may well allow the lines to keep cruise fares affordable to the general public. And, what’s more, those same cruise line guests will be quite willing to spend money on those brands while on board.

There is also a form of captivity that exists with a brand that is exclusive to a particular cruise line. For example, customers who book a cruise with a certain line based on its brands are more likely to be committed, profitable and reasonably safe from competition from the point of view of the cruise line.

That, along with private lounges for repeat clients (such as the Diamond Club lounges on Royal Caribbean, for example) that give them privileges over the average cruiser, give those guests the type of exclusivity that will attract them back many times. One can also probably watch for more overlaps between brands and affinity programs as time goes on.

In the end, however, while the other lines jump hoops to try to work with outside brands, the Carnival Group seems quite happy to rely on its own cruise line brands. In the case of their children’s entertainment programs, however, Royal Caribbean’s Shrek and NCL’s Spongebob Squarepants may well be pushing adults, and even some parents, over towards Carnival lines. And although Carnival Cruise Lines does have its own Fun Ship Freddie, that particular character is not as overpowering as the others. Time will tell.

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