As the Costa Deliziosa pulled into the Port of Los Angeles earlier this month, Travel-Intel sat down with Costa Cruise’s North America Vice President of Sales and Marketing: Scott Knutson. In light of the challenging year Costa had in 2012, Knutson was able to shed some quality light on the past and lessons learned toward what is turning out to be a surprisingly prosperous 2013.
What challenges has Costa Cruises had this year following the Concordia incident, and how has the line been facing them?
From beginning it was heart wrenching. No one is prepared emotionally to have something like that happen to your ship, your guests and your fellow employees. There were many unfounded comments … but you had to let it all take its course, you had to let the facts come out and you had to let an independent investigation determine what happened. But the crew and staff acted heroically and got 4,000 people off the ship in two hours.
Our first priority was to take care of the guests on board and their families; second was to get everybody home; third to take care of guests booked in future so we could re-accommodate them, and then finally to find the root cause of the problem and take the action needed and make sure does not happen again.
It’s been challenging for the whole industry but we are a safer industry for it and our cruise line now is arguably the safest cruise line in the world.
Because of the level of trust through our travel partners we saw June 2012 surpass the level of activity we had the year before.
We have been in business for 64 yrs and this was an awful incident caused by human error. But we had to take it for what it was. It was not a permeating problem throughout the line. It was a one-off incident and we had to take corrective action to minimize a chance of ever repeating.
What kinds of responses are you receiving from travel agents and consumers?
People responded to our website with off-the-chart numbers in hits after the incident. But they looked at the company and saw who we were and where we went and many were seeing our company for the first time. Once they did that — and at the time we had some attractive offers to convince people to come back and give us a try and let us prove ourselves — shot business up and has continued to do so.
We let our guests tell our stories in marketing and it takes the emphasis off us and lets public do that for us.
But how are travel agents responding?
The professional agents and our travel partners responded favorably to our active response to the incident. These are people we have known for years and years. They understood what was really happening, that it was a one-off occasion and does not define us as a brand. Those agents continue to support us.
What are some exciting plans happening at Costa?
We will be rolling out the Diadema in 2014 (1,854 cabins and be able to hold up to 4,947 passengers), which will run in the Med with short cruises – the 7-day Western Med milk runs — starting November 2014. Secret wowing factors? We cannot really talk about the details of the new ($715 million) ship but we can say that you will continue to see a build on spa element as that is one of our strongest attractions. We have a wish list going from all areas of ship and we have been able to come back with what we can create from that list.
What types of creative marketing endeavors are underway?
Currently, what we have out there is called “Real Costa, Real People,” and that is about real customers telling our story. We are doing things here in North America in interactive emails, or “Emercials.” We will send out an email to our travel agent partners that they can send on to their clients and it will have an introduction from us and then it is an interactive email that allows them to look at videos of the ship, the experience, the itineraries — all in one simple email.
How sustainable are your price points? We hear agents saying they are often too low.
I totally agree. You walk around this ship and you see what it entails and we are doing this, literally, for $100 a day including food, including seven day itineraries at four or five different ports. This is not a tour bus where travelers are getting on and off all the time. To try to do this in Europe would cost nearly three times the amount. To put all that together is quite a value.
We think prices may increase as capacity slows and less ships come into the market and you see more demand for this product. We see older ships retire and how other ships cannot keep up with the desires of the clients because of space or size, so there will continue to be new ships and new innovations. But there is a balance between building too fast and not getting a return.
We do not want to be seeing agents selling a $400 cruise and bringing in $35 for their work. But they also are bringing in clients they may not have had before, bringing them in once and possibly holding onto them as clients and for multiple cruises in the future.
Do you believe that the wildly popular and burgeoning river cruise industry is eating in to your markets?
It’s apples and oranges. People like that experience and they may choose river cruising one year and then a large sea cruise the next. It’s a terrific product and very interesting but still, it is a small market. It’s popular and it is getting a lot of publicity these days, but in essence it is a tiny market when the ships are only 120 passengers. They may be going out full but you have to build 20 of them to compare to the ship we’re on. There is room for both. They are such completely different experiences that it is like asking someone if they want to experience the Alaska interior or go to the Caribbean. People want to try both.
What is Costa’s current platform for ongoing travel agent education?
We had a club called Costa Academy but we discontinued it. Our model changed and we started to see the frequency of use diminish. So we introduced a webinar series that we do at least quarterly. I do them usually – next is Feb 28. We’ll do those more often to reach different audiences. We think it is easier to keep our partners up to date and allows us to reach the right markets more effectively.
What is the essential message about Costa you want travel agents to know?
The thing to know about Costa is that it is a strong company and an innovative company. We have been referred to as the underrated innovator and the quiet giant and that is because we do things – such as introducing the Samsara Spa program – and we do not really scream about it. That’s not our style. Now you are seeing a lot of other companies trying to emulate this program but we were the first. Same thing with outside balconies. The Costa Atlantica was the first cruise ship to build the majority of cabins with balconies. And there are other things – Costa was the first leisure cruise line to sail in the Caribbean — back in the 1950s.
I think what I would want agents to know most is how we deliver an international cruise product without the international price tag. And we do so to a market looking for that full immersion experience of dining and surroundings in a setting that is large enough to provide options that appeal to a wide variety of people.
It is not a boutique line, such as a river cruise where your onboard options are limited. But it also not a party line. It has a setting that delivers an immersive international experience.
What about a similar message to consumers?
To consumers I would want to say that we are the third most popular cruise line in world and in Europe we are the number one line. Costa delivers an international experience at a good value, so you do not have to do an escorted tour or an expensive boutique experience. But you can have that full premium European tour experience at a good value.