FYI From Open Jaw

[DR John]

Fast Expanding Seabourn Offers Opportunities For Retailers

Seabourn is Carnival’s only higher-priced brand forecasting a decline in yields this year, but it's not unanticipated given that the line is expanding capacity so quickly - a 216% increase over a three-year period to over 2,000 beds.

 

This isn’t necessarily bad news for retailers, as customers - even wealthy ones - are still on the prowl for deals. Seabourn President Pamela Conover says retailers can be confident that her line’s prices are true discounts.

"Customers are more watchful than ever as to what is a real discount. We didn't raise rack rates to achieve two-for-one pricing,” says Conover. “Along with special air add-ons, these represent real values that are critical in driving the consumer."

 

Lower rates and fleet expansion is spurring a change in the demographics of Seabourn customers; Conover cites a 79% increase in first-timers. The balconies available on Seabourn Odyssey are one draw. "To some extent, a lot of the newcomers to us have cruised with Regent, Silversea and Crystal before, because the balcony issue was so important to them," says Conover. "We are also seeing tremendous growth in agents now selling Seabourn who weren't before."

 

With three new 32,000-ton ships Seabourn can offer a wider range of durations. While there’s a big increase in seven-day product, there are also more long itineraries, with the new Seabourn Sojourn doing a world cruise for the line in 2011. There are more destinations too, with Odyssey in the Med, Sojourn in Northern Europe, Pride in Southeast Asia and Spirit heading for Indonesia in 2011.

"The loyal, faithful Seabourn followers want new itineraries, and they're getting them," says Conover.

But the loyalists also want a clubby, intimate ambiance and some reports indicate there may be challenges for Odyssey simply because it is bigger. Conover responds: "On Pride, Spirit and Legend, the social mix of guests is very important. They mix very freely with each other. Also, being open seating makes it's easy to say, 'Come, have dinner with me.'"

 

Conover contends that while the new ships are bigger, much design attention was paid to preserving a smaller ship feel. "We tried hard to get intimate spaces on the new ships, so that guests still have a small ship cruise experience," she notes.

 

Maintaining the same pax to crew ratio on the new ships also helps to preserve a similar feel. Generally, the larger the ship, the higher pax to crew ratio, but Seabourn's new ships still have a pax to crew ratio of 1.3 to 1; a waiter is never far away.

 

Historically, when a line expanded with new ships at a rate like Seabourn's, they'd sell off some older tonnage to smaller, European-based lines. But that may not happen this time, as the ship buying market has changed. Not only are there difficulties in obtaining loans for these big purchases, but the big North American cruise companies have expanded to overseas markets, replacing smaller local lines that used to buy the older tonnage.

 

So, by the time Seabourn Quest arrives in summer 2011, the line will most likely be six ships strong, which will mean unprecedented port flexibility for the brand, a transformed rate structure and a changing passenger mix, with older ships continuing to play a critical role.

 

 

 

 

 

 

 

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