Transport Cruises

The Multi-Million Dollar Campaigns Cruise Companies Are Aiming at Millennials

Mar 11, 2014 5:00 am

Skift Take

Can a few ads and concerts change opinions about cruising following two years of regrettable press?

— Jason Clampet

Free Report: The Changing Business of Extended-Stay Hotels

Thomas Layer  / Associated Press

Passengers from a motorcycle cruises' tour group, prepare to board the Royal Caribbean International's Explorer of the Seas, docked at Charlotte Amalie Harbor in St. Thomas, U. S. Virgin Islands, Sunday, Jan. 26, 2014. Health officials have boarded the cruise liner to investigate an illness outbreak that has stricken at least 300 people with gastrointestinal symptoms including vomiting and diarrhea. Thomas Layer / Associated Press


Cynthia Rodriguez has seen cruise ships around South Florida, watched commercials touting the option as a value and heard stories from friends who have cruised.

But the 44-year-old North Bay Village resident has never set sail herself, unsure about what she’d do on a ship or how much the trip would actually cost. Lately, concerns about a spate of headline-grabbing incidents on cruise ships have added to her uncertainty.

“I’ve always considered it,” said Rodriguez, who works in bookkeeping. “I don’t know. I’m afraid I’d be stuck on there and kind of be bored.”

With multimillion-dollar ad campaigns, brand partnerships, travel agent help and onboard innovation, cruise lines are desperately trying to woo newcomers such as Rodriguez and the more than 200 million other Americans who have never taken a cruise.

As thousands of players in the international cruise industry gather in Miami Beach through Thursday for the annual Cruise Shipping Miami conference to discuss trends in entertainment, dining, marketing and itinerary development, one key issue remains central: How to get people to step aboard that first ship?

“Getting that first-timer is critically important to us,” said Dwain Wall, senior vice president overseeing agency and trade relations for the Cruise Lines International Association. “We know that the future is bright for us if we can get them on their first cruise — they will come back multiple, multiple times.”

According to CLIA, the greatest potential markets for first-time cruisers include the 95 million millennials, a group between the ages of 18 to 37 that accounts for $1.3 trillion in consumer spending; multigenerational families traveling together; social groups taking cruises around a shared interest; and river and specialty cruising.

There’s a huge pool to draw from. According to a report by CLIA in 2011, the most recent numbers available, only about 73 million people in America — by far the largest cruise market — had ever gone on a cruise, or 24 percent of the population. That was an increase from 2008, when 59 million (or 20 percent) had cruised.

The number of vacationers who choose a cruise continues to increase both in the U.S. and globally, where the passenger count is expected to increase from 21.3 million in 2013 to 21.7 million this year. But the percent of vacationers who have taken a cruise has remained relatively stable.

Executives and industry observers say that converting travelers who have always stuck to land can be tricky for many reasons, including unfamiliarity, decades-old stereotypes and, in the last couple of years, negative publicity surrounding cruise-related incidents.

“If you haven’t been on a ship, it’s very hard to imagine what it’s like,” said Carolyn Spencer Brown, editor in chief of CruiseCritic.com. “With a hotel or resort, you know what that is — everybody’s stayed in one. And you can go and stay in a resort, but you can leave if you want to.”

Cruise lines, travel agents and experts say that some of the main points of resistance are people’s concerns that they (or their kids) will be bored; that they’ll be forced to stick to a strict eating and entertainment schedule; that they won’t get enough time to spend at destinations; and that only retirees go on cruises. But while cruise lines have invested billions of dollars in new ships brimming with activities, restaurants and entertainment aimed at young vacationers, that message is still not universally understood.

“From the standpoint of the consumer, the concern is that there’s too much risk of disappointment,” said Henry Harteveldt, travel industry analyst for consultancy Hudson Crossing.

Rough Seas

For a noncruising public that was already on the fence, the past two years delivered several reasons to stay on shore. In January of 2012, the deadly Costa Concordia shipwreck in Italy drew widespread coverage around the world. The following year, fires aboard the Carnival Triumph and Royal Caribbean International’s Grandeur of the Seas drew new rounds of coverage. Earlier this year, norovirus sickened about 700 people on a Royal Caribbean ship, forcing the company to end a trip early.

“The only thing missing is a real-life Poseidon adventure,” Harteveldt said. “It’s been a disaster for the industry.”

He said the mishaps and the attention they drummed up have discouraged travelers from taking that first cruise.

“The concern that people have is: ‘If I’m going to spend a lot of money on a cruise and take a week or two of my valuable, hard-earned vacation, why would I want to do something that has even the slightest element of risk involved?” he said.

In its segment on the cruise industry, PhoCusWright’s U.S. Online Travel Overview Thirteenth Edition said that one major cruise line “reports that half of noncruisers reported a more negative view of the segment in 2013, compared to a quarter of active cruisers.”

“The uninitiated take the bad news especially hard, making it difficult for suppliers to grow their market,” said the travel industry research firm’s report. It added that the “industry faces a slow haul on the road back to normal,” with just 3 percent growth expected this year.

Another study, the MMGY Global/Harrison Group 2013 Portrait of American Traveler, said that the number of leisure travelers who were interested in taking a cruise sometime in the next two years dropped from 52 percent in 2012 to 46 percent in 2013. The number of travelers not interested in a cruise went up, from 31 percent to 36 percent.

“This is presumably as a result of the negative publicity that has appeared about industry accidents and other unwelcomed disruptions to cruise itineraries during the past 18 months,” said the report, based on online interviews with 2,511 adults who took at least one overnight leisure trip of 75 miles or more from home during the previous year.

The industry has addressed safety concerns and, in the case of Carnival, devoted hundreds of millions of dollars to fleetwide fixes on safety, reliability and fire-suppression systems. But cruise lines and travel agents are also taking new approaches to lure the uninitiated.

Carnival Cruise Lines introduced the “Great Vacation Guarantee,” meant to encourage newcomers especially to give cruising a try. The guarantee offers a 110 percent refund and free transportation home if guests want to leave within the first 24 hours of a cruise.

Jim Berra, Carnival’s chief marketing officer, said the goal was to eliminate a potential concern, especially for first-time cruisers. Since the guarantee was introduced in September, about 40 people — out of about two million guests — have taken the line up on it, mostly because passengers needed to get home for a a medical issue or emergency or forgot documents that they needed for the trip.

“It allows us to cover a lot of potential barriers,” he said.

CLIA, the trade association, will launch a training program called “Turn Their Heads — Grow your Business through 1st time Cruisers” in June to educate travel agents on bringing new clients into the fold. Wall said the seminar revolves around “teaching agents how to make the client feel that magic moment when they convince them to make that decision to cruise” and focuses on making sure newcomers understand what modern cruise ships look like and offer.

Cruise lines are working to get that message out themselves, in large part through major advertising campaigns meant to grab the attention of newcomers. Princess Cruises, part of Doral-based Carnival Corp., recently launched a $20 million ad campaign across television, radio, print and digital after more than a decade without advertising on TV.

The “Come Back New” campaign, which started airing spots on TV in January and continues through this month, is aimed at the “meaningful traveler” segment that craves enrichment through the places they go and people and cultures they encounter. Tests showed that the message resonated with the new-to-cruise market, said senior vice president of marketing Gordon Ho.

Since the blitz started, the number of first-time visitors to the brand’s website has doubled, Ho said.

Carnival Cruise Lines has also been spending an unprecedented amount on advertising, starting with a $25 million campaign last fall and continuing with Olympic-themed TV ads during the winter games.

“We want to reconnect with the broad marketplace, and we want to reconnect with first-time cruisers … one of the best ways to reach them with emotional content en masse is in television,” Berra said. He said that while the likelihood that first-timers would consider the brand, as well as bookings, fell after the Triumph fire, consideration has since returned to levels seen before the incident.

Royal Caribbean International, headquartered in Miami, also took advantage of the Olympics, with television commercials in major markets and a digital push featuring former summer Olympic athletes Gabby Douglas, Ian Thorpe and Tom Daley competing in onboard activities.

And Norwegian Cruise Line capitalized on a Super Bowl charter agreement with Bud Light that turned new ship Norwegian Getaway into the Bud Light Hotel. The days of events resulted in one billion digital, print and broadcast impressions, said Norwegian president and CEO Kevin Sheehan, key to attracting attention from potentially new customers.

“That’s how you resonate and get people,” he said. “As a smaller player in a big industry, we have to do those kinds of things to get people to notice us.”

Changed Experience

Cruise lines have been counting on advertising to draw attention to what they’ve already been doing for years to bring new people into the fold: redefining the cruise experience beyond shuffleboard and midnight buffets.

Norwegian pioneered the concept of “freestyle cruising,” which abandoned the scheduled, stuffy dining-room model and allowed passengers to choose from an array of restaurants at their leisure. Now, most cruise lines — especially large lines that cater to North Americans — feature a slew of dining options both free and for an extra fee.

The industry’s largest lines, including Carnival, Royal Caribbean and Norwegian, all have designs on bringing more families in to grow first-time business — and relatively similar approaches. All three say that their new-to-cruise population makes up about a third of passengers a year (slightly more, in Carnival’s case).

All have invested in activities that will appeal to both kids and active adults and have pursued partnerships with well-known brands that will serve as a familiar bridge to land-based comforts.

For instance, some Royal Caribbean International ships feature a Starbucks on board, DreamWorks entertainment for kids, surfing machines and rock-climbing walls for teens, and Broadway shows for the entire family. The line’s newest ship, Quantum of the Seas, will also include a mechanical observation pod, a simulated skydiving experience and bumper cars.

“A lot of the reason why we put them on the different ships was to attack the myths and misconceptions about the cruise experience and to make sure potential cruisers know that it’s more active, it’s less regimented, and they can have lots of new experiences,” said Adam Goldstein, Royal Caribbean International’s president and CEO. “We have spent a lot of at least the last 15 years very much devoted to the idea of making our product more accessible to people who haven’t cruised before.”

Carnival has moved into branding partnerships more in the last couple of years with a major revitalization project called Fun Ship 2.0, bringing in Food Network personality Guy Fieri for Guy’s Burger Joint; George Lopez to curate comedy programs; and Hasbro, Dr. Seuss and EA Sports. Recently, the cruise line announced Carnival Live, a concert series for cruise guests featuring performers such as Jennifer Hudson, Lady Antebellum and Chicago.

The line has added more perks for families, such as water parks, ropes courses and miniature golf.

“One of the barriers that families have is the concern that there may not be enough for them to do,” Berra said. “The fear of having bored kids on a vacation is obviously a mother’s and a planner’s worst nightmare.”

Norwegian, which has launched two ships in two years (and has two more coming up in 2015 and 2017), also offers water parks, ropes courses, mini golf and Broadway shows. The line has a partnership with Nickelodeon for children’s programs and introduced a venue showcasing Grammy award winners and nominees on its newest ship.

The Doral-based operator bought music production company Sixthman in 2012, which fills a ship with concerts in slower seasons.

“These people are there because they are into having a lot of fun and enjoying the music and talking to people,” said Sheehan, the Norwegian CEO. “Getting them on the ship in that environment, they usually leave with a very positive feeling. They usually come back with their family on another cruise.”

More lines are also trying to give first-timers a taste of cruising with shorter voyages of three to five days. While quick weekend cruises have long been available on mass-market lines, some higher-end operators have also added the option. Princess launched such “Getaway” trips last year and said they are drawing a large number of people who haven’t cruised before.

MSC, a Europesan line that just started sailing a ship full-time from Miami, emphasizes its Italian sensibilities with well-known brands from that country, including Segafredo coffee, Eataly dining and Nutella sweets.

To spread the word to possibly untapped markets, the line participates in events such as the Coconut Grove Arts Festival, Italian Film Festival and health expos, said Ken Muskat, MSC’s senior vice president of sales and marketing in the United States.

Michelle Fee, CEO of home-based travel-agent network Cruise Planners-American Express Travel, said cruise lines also are starting to get better at giving a new generation of smartphone-addicted cruisers what they want.

“Years ago, [when] you went on a cruise ship, there was no TV, you couldn’t call home,” she said. “You were so disconnected, and that was the way you sold a cruise … We’re no longer the same vacationers. We want to go away, but we want to stay connected. I think the cruise lines are starting to embrace that.”

Boutique Sailings

While most entry-level cruise lines are in the big-ship, budget-friendlier category, lines with smaller ships and higher prices are also making inroads.

Azamara Club Cruises, part of Royal Caribbean Cruises, attracts a significant number of first-time cruisers with its focus on destinations, offering night tours and staying multiple nights in port. President and CEO Larry Pimentel said that about 22 percent of passengers have never cruised before.

“These people are not uninitiated travelers,” he said. “They’re seasoned travelers.”

SeaDream Yacht Club, a niche, small-ship line that cultivates a “yachting” experience, relies on word of mouth in large part to bring in new customers. Last year, the company started hosting informal gatherings around the country for past guests and their friends, many of whom have never cruised.

“It’s just magic to watch our past guests telling their friends and connecting with everyone in their community,” said president Bob Lepisto. “As a small brand, we don’t have that marketing clout.”

Disney Cruise Line says it attracts new-to-cruise guests who want to try something new with a brand they already trust. And other operators have turned to partnerships with brands such as Dancing with the Stars and B.B. King (Holland America Line) and Bravo’s Top Chef (Celebrity Cruises, which will have four sailings with contestants from the reality show, as well as menus inspired by it).

Continuing on the food theme, Celebrity Cruises has sponsored the South Beach Wine & Food Festival for four years. This year, the cruise line held a Backyard BBQ at sea for the first time as part of the event.

With the slew of choices, cruise lines say they rely heavily on travel agents to steer first-timers to the right product so the first impression doesn’t turn them off.

Robin Katz, who owns a Cruise Planners franchise in Kendall, said she goes through a long list of questions so she can send her clients to the right place.

“You have to kind of ask at least 10 questions from your clients so you know what would be right for them,” she said. “Not everybody can get on Carnival and be happy. Not everybody is going to be able to afford a very high-end cruise line like Oceania or Regent.”

Al Richman, a travel agent in Lantana, said first-timer cruisers, which make up roughly 20 percent of his business, are his favorite to work with.

“My wife and I at this point have been on about 70 cruises,” said Richman, 70. “We remember our first cruise, but we have this great benefit or privilege where we get to relive our first experience through other people’s eyes. And we get to do it over and over again every time we introduce other people to the value of a cruise vacation.”

Richman, who owns a CruiseOne franchise, said he gets new business thanks to a button he always wears. It says “Ask me about cruising” and serves as a conversation starter wherever he goes.

Richman said he sees his job as matching the right person to the right experience for the best value.

“Before the cruise is over, it’s, ‘Wow, I’ve got to do this again. I should have done the seven-night cruise, not the three-night cruise’ if we’ve done our job right as agents,” he said.

For some potential cruisers, though, the vacation still seems out of reach.

Felix Gomez, a 51-year-old service member in the U.S. Army, said he has considered cruising but only taken land-based vacations. Currently stationed at Fort Bragg in North Carolina, he’s from Hialeah and has lived all over Florida, as well as overseas. He said he likes the idea of taking a cruise with his wife.

“The ideal would be to go through the Caribbean, stop at a couple of places, just have a great time just me and her,” said Gomez, who works in aviation.

Research has not turned up a sailing at the right time, place or price to make them commit so far, but Gomez said he hopes such a trip will work out in the near future.

“Everybody tells me it’s a great thing,” he said.

This article includes comments from the Public Insight Network, an online community of people who have agreed to share their opinions with the Miami Herald and WLRN.

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