The Rise of Luxury Outposts on Mainstream Cruise Ships

Cruise ships catering to thousands of passengers at a time have always had a variety of choices when it comes to room products: inside cabin, outside cabin, suite. But these are merely different rooms offered at varying price points.

On the other hand, some mass-market cruise lines are now doubling down on a strategy of creating segregated luxury outposts, where guests can hide away from the crowd and experience top-notch service, exclusive amenities, and privacy.

Oversized suites in these sections come complete with private concierge and butler services. Other amenities may include private pools, restaurants, lounges, and observation decks. On a typical ship with around 2000 staterooms, special sections usually house in the neighborhood of 70 to 80 suites.

Norwegian Cruise Line (NCL) was the first to bring the concept of a ship within a ship to fruition. After Hong Kong-based Star Cruises bought NCL in 2000, some of the ships that had been on order to cater to the Asian market were delivered instead to North America. These new ships came with 5,000 square foot garden villas.

“At first, we thought we might not get the dollars per square foot, but we kept them, as their existence made a statement,” said Andy Stuart, NCL’s Chief Executive and President.

After a few years in operation, though, NCL discovered the rooms made both a statement and plenty of money.

The success of the garden villas caused the line to take a closer look at the affluent market, where it noticed a gap.

“The luxury cruise ships were designed for older travelers. They were more sedate ships that puttered around the world for two weeks or more. We thought there might be demand among affluent couples and families looking for more fun, for nightlife, for entertainment,” said Stuart.

The Haven concept was introduced on NCL’s Jewel ships in 2005. Aside from a collection of suites, each area had a private courtyard, a pool and a private concierge. By 2010, a new and improved Haven concept added a private bar and restaurant to the mix. At this point, ten of the line’s 14 ships have a Haven, with suites selling for about 25 percent more, according to Stuart, than the highest-priced cabin in the main section.

In the meantime, Switzerland-based MSC Cruises introduced its Yacht Club concept ten years ago, when its Fantasia class of ships started sailing out of Miami.

“We wanted to develop a ship within a ship to attract luxury travelers who usually go to Silversea. We started with a separate environment with limited number of suites, plus a private lounge, pool, and butler service,” said Roberto Fusaro, president of MSC North America.

The concept evolved so that Yacht Clubs include a dedicated restaurant, plus extra amenities such as private in-suite shopping opportunities and exclusive shore excursions. Fusaro said that compared to the best cabin in the main section, “prices in the Yacht Club can be 50 to 100 percent higher, a price point competitive with luxury cruise lines.”

But the question is, why would luxury travelers opt for a huge ship when the Regents, Silverseas and Seabourns of the world cater specifically to their every need?

Kimberly Wilson Wetty is co-owner of Valerie Wilson Travel. Her agency’s clients tend to prefer luxury ships because “they are more personal and intimate (generally housing in the neighborhood of 400 to 600 guests), and more likely to be filled with like-minded people.”

Wilson Wetty isn’t at all convinced her clients would ever travel on their own on a mass market ship, even if ensconced within a special section. However, she does see a large opportunity when it comes to multi-generational trips. Grandparents who are accustomed to cruising in luxury can do so, while other generations of the family with tighter budgets can opt for lower-priced cabins elsewhere on the ship. A trend that also chimes with MSC’s Fusaro.

“Our experience as we grew the Yacht Club is that the extended family segment is a very important segment for us. It’s an interesting niche that passengers were telling us they needed – that they couldn’t invite their families on a luxury cruise ship,” he said.

The fact that the bigger MSC ships have special programming for kids, plus features ranging from aqua-parks to Formula 1 simulators, makes them more suitable for generational sojourners.

For Stuart, multi-gen is a significant part of the Haven’s client base, but certainly not the only one. He believes the ship within a ship concept may also appeal to luxury travelers new to cruising.

“There’s a whole segment of older luxury travelers who haven’t cruised because the only choice was the traditional luxury lines. They didn’t want the homogenous crowds and more sedate environments that luxury ships offer,” he said.

In addition to appealing to these more active older travelers, Stuart said the Haven attracts younger luxury travelers, some of whom have children who enjoy the amenities of the mass market ship. As Fusaro pointed out, “When they cruise, they can duck in and out of the big-ship experience and have children entertained for the week.”

According to Wilson Wetty, in today’s society, the mass market is looking for entry-level luxury.

“More people are craving private access and exclusivity.  So, these areas provide a great opportunity for mass-market cruisers to step up to the high end.”

Both Stuart and Fusaro agreed that the refuges give regulars a chance to trade up.

“We want to keep our clients for as long as possible,” said Stuart.

After all, offering a more exclusive option as a client moves up the travel food chain budget-wise, can help keep loyalists on board.