By Bill Becken
Luxury cruise industry veteran Larry Pimentel was appointed President and CEO of Azamara Club Cruises® in July 2009. Travel-Intel’s Cruise Editor, Bill Becken, talked to the cruise line chief to find out what trends are afoot for the luxury line and discover what upscale cruise passengers are looking for these days.
Q. It’s said Azamara Club Cruises occupies the luxury segment. But distinctions such as mass-market, premium and luxury are getting blurry, right?
A. At Azamara, our price point is actually a luxury price point. That’s just a function of how much we charge on an APD basis versus other cruise lines. I think the brand has actually been at the ultra-top-end of premium. While we have guests who “play with us” in that space, so to speak, Azamara has really moved up to what the industry refers to as luxury.
Q. Would you say the old distinctions are outdated? If so, what seems to have caused this?
A. Yes, I think all of the designators are outdated. Why? It’s that the design concept of ships—certainly their size–has been modified over the decades. For example, most people would look at our sister brand, Royal Caribbean, Royal Caribbean Cruises Ltd.’s (RCCL’s) flagship line, and call it a mass-market line. And most people would look at Celebrity, another of our sisters, and say it’s a premium brand. Yet Celebrity refers to itself as a modern luxury brand.
Q. So there’s all this new distinction and difference within the casual old framework?
A. Yes. If you look at a Royal Caribbean Oasis-class ship, and keeping in mind the existing categories, there’s nobody on earth who can convince me that their loft, which can cost $20K a voyage, is mass-market. So the products that have been built more recently have been built with different, sometimes multiple, verticals in mind. And that represents a very different cruise market than what we once had.
Q. Cruise is nonetheless growing. Is that itself a draw? How are new cruise customers responding to some of the latest verticals introduced—such as Azamara–pretty much boutique, with only two ships, carrying only about 700 guests each?
A. Cruise is still small in comparison w/travel generally, although admittedly it’s a growing area, even in bad times. Because of its value proposition. So what do our consumers look for? And what do we give them? Authentic experiences, anything that’s authentic, that is, like longer stays, more overnights, and even night touring, an Azamara exclusive.
Q. What do those things mean, at least at Azamara?
A. Longer stays means more time in the port. More overnights is what it says. We go many places where guests can stay two to three nights. That’s definitely not the norm in passenger shipping–the business model generally dictates that the ship keeps moving, or keeps moving out, because they have casinos, retail, other things to harvest—the model is different. Night touring is generally not available on other ships.
Q. And those things also offer destination immersion?
A. Yes. And the shocking part of all of it all: guests are buying into this who are brand-new to cruising. We’ve been doing this since April 1, 2010, and last year, 2011, just shy of 22 percent of our guests had never been on a ship in their lives. Ours is their first. That is amazing. When we ask guests why this is the case, they say it’s the longer stays, the overnights.
Q. And these are really an Azamara exclusive?
A. Maybe someone out there comes up to us in destination immersion, but I doubt it. If you get down to the math and see in how many voyages we do this versus the other guys, there’s no one even remotely close. Although I would say that, in the interests of full disclosure, there would be one exception. It’s a residential ship called ResidenceSea. But it’s by no means a traditional cruise line or terribly mainstream.
Q. What are other trends in the cruise business?
A. Well, given economic scenarios and odd geopolitical situations, a lot of challenges have hit America and other countries. Especially the geopolitical issues are making guests conservative. Which, in turn, leads to their heightened interest in value. And that’s where cruising wins bigtime. Because when you pay to cruise, you’re getting so many items included. And that means we appeal to a market that spends wisely. After all, they’ve got their hotel, transfers, entertainment included, and all the other various and sundry things that ships offer all around the world. And so the quest for value, as well as authenticity, is a very strong trend.
Q. Any other trends that stand out for the industry?
A. The last trend I’d mention is simply the quest for the unique. What’s that? Well, in our case, we simply send our ships to unique events. The Grand Prix. Carnivale in Rio de Janeiro. We’ve arrived at the world’s best art exhibits with no lines. We’ve do the same thing at a number of different places around the world. This really allows our product to be different. That’s why we’ve been so successful: consider that our two vessels are older, about a decade old. But we have increasing average per diems and an increasing client base; that’s because of our unique offerings.
Azamara is part of the Royal Caribbean Cruise Lines, which owns five cruise brands: Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France.
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