HAL strategy wrong? Go upmarket, better than going down market?

[Jade13]

I booked the Quest after =X= bought it and before they set up the Azamara brand. Journey had been at sea for a few months, and Quest for 4 or 5 sailings. In the center of the MDR, the waiter could barely pass between tables and I had an awful time going to the mens room during the 2.5 hour dinner. (One of 4 in the MDR) The waiter was also the beverage person and very busy, without time for any of the nice touches of dining room service.

We ate in the specialty ding room one night which was 3 stars nicer. The beverage manager told me the ship had 3 times as many pax as when it was Rennaisance.

 

Hmm, we only ate in the MDR one night on a 14 night cruise. We were usually in the buffet or Prime C. Three nights we ate off of the ship.

[m steve]

emphasizing the dress for the day. Not just formal or casual. If the staff enforced the dress it would work. If anyone hits the Maitre D' for trying to offer a jacket or suggesting another dining venue, security should take him to his cabin and restrict him for the balance of the cruise. He obviously does not belong cruising with civilized people. HAL seems to get a better class of cruiser but there's always some slob who won't try to comply and the rest of the passengers should not be subjected to their behavior. That's why we don't sail on Carnival any longer. HAL is not upscale like Silversea or Seabourn but priced so we can afford to cruise several times a year and enjoy ourselves. $500 a night pp is just not in my budget being retired. The only thing HAL could improve is their itineraries as they are so repetitive year after year.

[carlmm]

Why can't HAL pull away from the pack? Why must they be lumped in with all the other lines?

 

Why not run a big ad campaign, elegant cruising, cruising like it used to be?

Nice commercials showing the teak decks, teak lounge chairs and people dressed up.

 

CCL/HAL apparently believes just aren't enough people with the money and time to travel by ship who give a dam about such things...

 

It is even harder to understand CCL/HAL as many things would not bear any higher costs and thus not require passengers with more money.

For example, to advertise and to enforce a more elegant dress code does not cost anything more than an anything goes attitude.

And there is no reason why standards should not be maintained on a seven days cruise.

 

Money spent on gadgets to attract the non-traditional cruiser might as well be spend on securing the e.g. elegance of public rooms or the teak decks.

[bigdipper]

This an excellent thread and I cannot help responding with not an Apple but a Chrysler analogy. Both companies have been close to death's door more than once and both have a tradition of being distinct from competition as perceived both internally and externally. Chrysler (and HAL) over the decades are their own worst enemies, but those distinct characteristics do have emotional attraction to me. My guess is that the past just may repeat itself for both. Carnival, the US government, and Fiat have proven to be saviors whether deserved or not. As for me I'll continue to feel affection for both companies, patronize HAL and hope for the best for Fiat.

Ralph

[DRWhit]

Those of us who do care and do have the money to spend on higher fares for cruising aboard ships in good condition and with proper service will eventually tire of HAL and move to Cunard or Seabourn where CCL can pull more money from us for roughly the product we originally came to HAL for.

But in making that move, you could just as easily move to Azamara, Oceania, Regent, or some other line not owned by CCL. That would teach them!

[Alcarondas]

...who give a dam about such things...

 

I see what you did there.

 

It's not just a question of bigger ships/excess tonnage - it's acquiring those bigger ships with their excess tonnage just as the global economy came unglued. I'm sure that in the late 1990s-to-mid-2000's, adding 6 or 8 larger ships seemed like a great idea. Stockholders want to see their investments grow, after all.

 

More than ever, the bottom line is the Bottom Line. And for most folks, it's a lot lower than it used to be. Better that the ships sail full of socially-challenged bargain-hunters than that they go empty. Remember those stockholders? Not all of them are avid cruisers. Most are just trying to make a buck, and they're going to insist that the company they've invested in does the same.

 

I think that much of the seeming downmarket movement we're perceiving is more about business expedience than strategic planning. Many companies have had to cut back and compromise some principles in the name of staying alive. I wouldn't be at all surprised if, once the Boom/Bust pendulum starts going back in the right direction, HAL will retake its former place in the cruising hierarchy, and the shorts-&-flipflops crowd will be thrown to the sharks. Or at least to more casual cruise lines.

 

Of course, I could be all wrong. It wouldn't be the first time.

[HappyInVan]

...

 

 

By 2020, HAL will more than likely have just the 4 Vistas, the 2 Signatures and a couple of the proposed 110,000 ton/3000 passenger newbuilds. Perhaps a couple of the last R-Class ships will be remaining, but once those are finally gone by @ 2025, HAL will no longer have a ship appropriate for 100+ day World Cruises or 65-day Grand Voyages - All that will be left will be ships that can't make it across the Pacific without refueling as they were originally designed for 7 to 11 day Caribbean cruises out of Florida.

 

 

 

 

Thanks to bepsf for this insight into the industry.

 

 

I guess that HAL and myself do not have a future together. Someone will eventually fill the niche if there's demand. Sadly, there will only be memories of HAL 'classic'.

 

 

 

 

Oh my this is an interesting thread. I just got off the Eurodam and had such an experience that my hubby and I were trying to gather our thoughts to basically post a similar message.

 

 

We fell in love with HAL because they tote themselves as being "classic" and "traditional"... they're your grandparent's cruise line (skews an older crowd)... NOT a drunken frat party... .......

 

 

I agree with you completely. On the Rotterdam, there was a small group of young people who looked like beach bums. One nite, they were listening to Gary T'To in the lounge, dressed in faded shorts and T-shirts. To Gary's embarrassment, they tried to do a sexy dance to one of Gary's songs.

 

 

Not Cool. I walked away

[Twickenham]

This thread has made for a very interesting read. Some I agree with, others not so much.

 

One thing I must address however, is the impression I get that you don't think HAL has a specific strategy, or that strategy is somewhat random. I can assure you, a company the size of CCL has invested mega-bucks in marketing studies. They want to know exactly who their client is (for each of their lines), and what they want, don't want, and are willing to spend. If they are dumbing-down the product, it's because it's more profitable in the long run. While I don't say that they are fool-proof in their approach (the refitting of the Veendam seems to have been a dud), I can assure you that a lot of time and money has gone into the product and its place in the market.

[bepsf]

I can assure you, a company the size of CCL has invested mega-bucks in marketing studies.

 

Following marketing studies are the absolute WORST way to direct a company's product offerings -

- Marketing Studies are what gave us the Pontiac Aztec, New Coke and the XFL.

Edited December 7, 2010 by bepsf

[m steve]

and that helps them plan any changes (please don't bring up the smoking issue here) and they can use this information to correct problem. They also read CC Hal threads regularly as do many of the CDs and Food and Beverage Managers.

Edited December 7, 2010 by m steve

[wilsonqbc]

Well I guess it comes down to just filling the ships,

I remember maybe a decade ago when service was top notch, and prices higher, they were not always full. like 800 pax on a 1200 pax ship, so better sell more for less, and hopefully make more up in onboard spending. also, yes, there are way more cabins to fill with all these bigger ships, so certainly prices have come down, but costs have gone up, provisions, fuel, pilotaage docking fee, tugs, wages and what not, so service and quality must suffer to make up for it.

Crystal, Silver are also in the same dilemma, Rates are down, and their service has also changed from what it once was.

[Atomica]

It's always suprised me a little that almost no one here gives HAL any credit whatsoever. To read through the posts, you'd think the place was run by monkeys throwing darts at a board. Harsh criticism at best.

 

HAL, as a business, has a responsibility to continually evolve. Businesses that do not evolve tend to have a rather unique experience: bankruptcy.

 

HAL is also a cruise line. Royal Caribbean, another cruise line, has pushed the envelope by building the Oasis of the Seas. I personally think the thing is a godawful eyesore, but there's no denying one thing: it's extremely popular, and it is making money for them hand-over-fist.

 

Is HAL going to build an Oasis-sized ship? No. Will they build larger ships? Yes. Why? Because the cruising public - that's you and me - have voted with our hard-earned dollars that we enjoy them. Heck, I'm guilty of it - I prefer the Vista-class ships over the S-and-R-class, nice as they are.

 

On a larger ship, the economics of scale are such that each cabin can be sold to you and me for a cheaper price. Which the cruising public have largely said they want. The cost of operating an S-class vessel is more per berth than a Vista-class ship. Which some - but not all - have said they don't want. Which is why HAL (wisely!) has kept their fleet as-is. Remember all the moaning that went on when the Zuiderdam was launched? How the world was going to end? Chances are some of you have enjoyed yourselves on that very ship.

 

I hate change. If it were up to me, the Macintosh I bought back in 1998 that cost me a fortune would still work. My car would last forever, and I'd have one career until I'm 65 and retire comfortably.

 

But that's not the world we live in anymore. We live in a world of change.

 

I'd personally rather see a changed HAL than an obsolete HAL.

Edited December 7, 2010 by Atomica

[Atomica]

You're joking, right?

 

Apple is the Chevrolet of the computer world.

Low price, mass produced, one size fits all.

 

They try to give away the IPhone in Asia, but nobody will take them - even for free.

 

Apple's low-priced? Wow. They must just mark the prices up every time I need a new Mac...

[Kay240]

This last week on the Eurodam has proven that HAL is abandoning it's brand. DH stormed out of dinner one (smart casual) night to complain about a man that entered the dining room wearing cargo shorts, a margaritaville T shirt and flip flops. {I do not want to start a discussion here about dress code}. DH and I spoke in depth with 2 of the asst dining room managers as well as the head of guest relations on board, and ultimately the Hotel Manager.

 

We were basically told that this is what to expect now from HAL on the 7 day Caribbean itineraries. They have no choice. Rooms for last week were as low as $399. At a little over $50 per person per day - you get people on the ship that want a cheap quick get away, the beach, and all you can eat. They don't look at or care about the cruise line they are going to be on. They want their beach and food. The clientele are dictating the mood of the cruise.

 

The Hotel Manager told us that a few weeks ago they had a man walk into the dining room on formal night without a jacket or tie - they offered him a jacket - he said "get out of my way" - they asked him to change, take the jacket or go to the lido and he punched out the dining room manager. The HM said to my hubby and I "how far do we go, what lengths must we take to enforce the rules?"

 

And it wasn't just the dress code - loud music at both pools, drunk and all-around inconsiderate people, babies crawling on the floor in front of the bathroom.......

 

The staff have a meeting the week before they head to the Caribbean and remind everyone what they can expect for the next few months. They take a few deep breaths and head south - counting the days until they head back to Europe.

 

We were assured by multiple people on the staff - from every level (HM, bartender, dining room mgr, future cruise consultant....) that this does NOT exist on longer cruises or cruises in other areas of the world (except maybe a little in Alaska with rates dropping there too).

 

It's sad really.

 

 

 

Yes it is sad!

We are leaving on the Ryndam on Sunday for a 7 day Caribbean cruise with friends who have never sailed HAL; we booked this cruise ONE YEAR AGO. We selected it for convenience and the opportunity to be on the Ryndam for our first time. We have not taken a 7 day cruise in at least a few years, but are also planning to book an interesting 7 day itinerary on the Eurodam (never sailed on her either) in 2012. The type of behavior you described is part of why we left Carnival many years ago. We like the elegant, more traditonal and sophisticated atmosphere we were having on HAL.

[HeatherInFlorida]

........................

The staff have a meeting the week before they head to the Caribbean and remind everyone what they can expect for the next few months. They take a few deep breaths and head south - counting the days until they head back to Europe.

 

We were assured by multiple people on the staff - from every level (HM, bartender, dining room mgr, future cruise consultant....) that this does NOT exist on longer cruises or cruises in other areas of the world (except maybe a little in Alaska with rates dropping there too).

 

...............

 

Since we now cruise almost exclusively in the Caribbean mostly because we live in Florida and cruise for the ship and not the ports, I have to take issue with your first paragraph and find it insulting. I'm going to give HAL the benefit of the doubt believing they did NOT tell you that the staff is literally "counting the days" until they can get out of the Caribbean waters and away from the likes of us.

 

Or possibly it's true and it may explain why we're not at all sure we'll cruise HAL again except their itineraries are better than Celebrity as others have pointed out.

 

But isn't it interesting that we didn't experience any of what you describe on our recent Solstice cruise? So maybe, just maybe, the reason HAL can't fill their ships at regular prices and have to discount to the point that they attract people who don't believe in dress codes, are just looking for free food and a drunken party, just may say more about HAL than it does about the majority of the cruising public. When I have cruised HAL in recent years, I'm just not feeling that "signature of excellence" and just maybe I'm not alone.

[iancal]

The people that we have seen on a number of discounted cruises were not people looking for 'free food and a drunken party'.

 

They were, in the most part, retirees who live in Florida within easy reach of the port. Many told us they just wait for the bottom to fall out of the pricing and book at the last minute. They even told us either the TA's or the cruise companies actually visit the retirement homes to troll for business in order to sell those low priced cabins.

 

I can't comment about how much they eat or drink, however many of them seem to complain to EVERYONE who is in earshot about EVEYTHING that is wrong with their $399. seven day cruise on HAL, Celebrity, or Princess. We have even heard them complain about not getting upgraded because they are seniors. Not sure what this has to do with getting upgraded. Perhaps these are some of the people that the HAL staff would rather not cater to.

Edited December 7, 2010 by iancal

[HappyInVan]

This thread has made for a very interesting read. Some I agree with, others not so much.

 

One thing I must address however, is the impression I get that you don't think HAL has a specific strategy, or that strategy is somewhat random. I can assure you, a company the size of CCL has invested mega-bucks in marketing studies.

 

 

I'm sure that you are right! No doubt, HAL has spend money on marketing analysis. They are being advised by marketing professionals.

 

 

That said, the interesting aspect of corporate strategy are the choices that organizations make. There are key decisions being made, or not made.

 

 

Take the case of General Motors. Once upon a time, what was good for GM was good for the country! You would have thought their position was impregnable because of their advantages in economies of scale, financial clout, dealer network and marketing experience.

 

 

Today, GM is still teetering on the brink of extinction after cost/capacity cuts. Clever marketing plans and advertising campaigns have not saved them. Marketing cannot overcome strategic failures in vision and motivation.

 

 

IMO, the decline of HAL stems from the motivation of senior HAL management. I suspect that HAL management (same for the other subsidiaries of Carnival HQ) are being compensated for the amount of $ profits.

 

 

So, the incentive is there for expansion. Each subsidiary has been expanding regardless of the state of the industry over-capacity. It's like the property bubble. Short term individual gain is more important than the long term consequences.

 

 

It doesn't matter so much for the low end cruise lines. They can fill the megaships with first time cruisers if they drop the prices enough. Yes, they also have to drop quality. But, that's okay. At that end of the market, you get what you pay for!

 

 

The problem is in the higher price points. Customers expect a certain standard. They know when they are being short-changed. They don't subscribe to the 'pay less for less' philosophy because they don't need to

 

 

Of course, they are many HAL regulars who will gleefully cruise more when the price drops. Others will upgrade their cabins.

 

 

However, HAL has so many ships that they need to attract non-traditional customers. That's the beginning of the erosion of brand identity and loyalty. It's a slippery slope.

 

 

Will this blow over? Can the economy recover, and HAL return prices/quality to the 'classic' level?

 

 

I doubt it. HAL has been investing in marketing points like the Retreat and the kids area instead of modernizing the a/c system. The gap between the HAL and Celebrity ships continue to widen.

 

 

Moreover, there's still the excess capacity in the short-cruise market. In the Caribbean, the New Amsterdam's listed prices for March are down to $100 per nite OV. Almost the same as the 14-day Caribbean Princess ($1437 versus $1298). Ditto for the 14-night Norwegian Dawn $1149.

 

 

According to wikipedia, the Norwegian Dawn (1126/2224) has a higher crew/passenger ratio than the NA (929/2104)!!!!!

 

 

That's the reason why I suggested that HAL has to go upmarket. Drop the bigger ships. Use the smaller ships for a higher price point. Steal customers from Regent instead of Carnival/Princess/NCL/RCL.

 

 

As a matter of fact, Oceania is adding two 66,000 tons ships in 2011/2. So, there's pressure from the high end on Regent. You could knock out Regent (pay more for more) etc if HAL (value with class) attacks from the low end simultaneously.

 

 

That would leave HAL in command of a broad price point in the executive segment. That's a strategic commitment. Very different from the 'follower' strategy of today. :eek:

 

 

Instead, Regent will pick up the customers that HAL leave behind. A gift from HAL.

Edited December 7, 2010 by HappyInVan

[TahoeTraveler]

Happy, I have to agree completely with you. In fact, after the mediocre service and downright bad food on our cruise in August on the Eurodam, we have booked a Regent 7-day cruise to the Caribbean next month. And before everyone starts talking about how Regent is so expensive and not affordable for most, keep in mind that the lowest balcony cabin on the ship sold for $500pp a day...and this includes airfare to FLL, all shore excursions, all the wine, liquor, soda and bottled water you care to drink, all specialty restaurants, all tips and all taxes. The only thing you might pay extra for is the spa and any premium wines.

 

When we first started cruising with HAL, the thing that impressed us the most was the service. After this last cruise, I'm afraid I cannot say that anymore. I am hoping that Regent is tremendously better. If not, we will probably return to HAL...but only for one of those last minute, el-cheapo deals (where we will NOT complain about not getting an upgrade, and we will NOT be wearing shorts and baseball caps in the dining room, and we will NOT be drunken fools lowering the anchor while the ship is underway). But I don't see us ever paying that full HAL price again, at least not until they take a hard look at their current product.

[billie5]

Happy: to paraphrase Tahoe, I have to disagree completely with you. :p

 

So many of the comments on this thread seem, to me, just bad economics. For example, there are the posters claiming that if HAL does not go in the direction of upgrading, rather than downgrading, customers are going to switch to Seabourn or Regent. Now just how many customers do you think are willing to pay four times as much for a cruise? Some, no doubt, but for every such customer, I am sure there are 100 potential customers who will sail for a lower fare, not a higher fare. Moreover, it is simplistic to assume these changes are a business model change entirely under the control of HAL management. Every decision made by every other cruise line affects what choices are open to HAL.

 

Many other points raised are IMO equally poor economics.....

 

Bill

[tcook052]

Happy: to paraphrase Tahoe, I have to disagree completely with you. :p

 

So many of the comments on this thread seem, to me, just bad economics. For example, there are the posters claiming that if HAL does not go in the direction of upgrading, rather than downgrading, customers are going to switch to Seabourn or Regent. Now just how many customers do you think are willing to pay four times as much for a cruise? Some, no doubt, but for every such customer, I am sure there are 100 potential customers who will sail for a lower fare, not a higher fare. Moreover, it is simplistic to assume these changes are a business model change entirely under the control of HAL management. Every decision made by every other cruise line affects what choices are open to HAL.

 

Many other points raised are IMO equally poor economics.....

 

Bill

 

And poor sociology also IMHO. HAL doesn't exist in a vacuum and the issues with a more casual dress code are no doubt being felt on the luxury lines also.

 

Arrogant louts punching staff is sadly more of a comment on the selfish attitude IMHO far too many exhibit on a regular basis and that also is hardly HAL's fault or responsibility to correct. Think about that the next time someone's cell goes off in a play or movie.

[casamariposa]

I sail HAL for several reasons, the first of which is that I travel solo and have always felt very comfortable on HAL ships. I can't say that for other lines I've been on. Also, I like a ship to look like a traditional ship. Some of the behemoths (especially the NCL Epic) to me are just plain ugly! Also, I travel on HAL on the longer cruises primarily for its itineraries. I wish they would use the S-class ships primarily on more exotic itineraries. I was aboard the old Nieuw Amsterdam in '89 when Master Jack van Coeverdan announced that Carnival had just purchased HAL. He gathered the entire passenger complement to share the information. There was much weeping and gnashing of teeth. But the line has survived while so many have not. I specifically remember how soon after that announcement Royal Cruise Line bit the dust. Their misfortune was HAL's gain. We got the Prinsendam! Some things have changed, but I can live with the changes. I can live without my waiter handing me, at the end of the cruise, a portfolio that he's autographed that is filled with all the menus from the voyage. I can live without a white-gloved escort leading me to my cabin upon embarcation. It was nice, but I'm still happy with the HAL experience. Just don't do away with the bread pudding!

[bird2sea]

I also like HAL for way they make me feel, since I am also a solo cruiser. I have not cruised that many times but I have enjoyed myself very much on the HAL ships I have been on. They just have an elegant feel to me and like so many have said they look like a ship. I would be afraid to go on one of the new "super ships" in that I would probably never find my way around. That is part of my comfort level is to be able to find where I am going fairly soon after boarding. I have gotten very good service from all areas of the staff when I have cruised. Since I have not experienced any of the other cruise lines except a trip around Hawaii on NCL my opinion may not count very much, but I really hope that HAL is around for many more years. I ditto The last several sentences of Casamariposa, especially about the bread pudding.

[mikjr]

Why is it that really great cruise lines like Seabourn, Sea Dream, Silver Sea, and Crystal have NEVER made a penny of profit in their entire histories?

Because the cruising public is more interested in Quantity over Quality.

Everybody claims that they want the quality, but when it comes time to ante up, lowest price always wins.

 

You hit the nail on the head... I would rather spend money on HAL or Princess and get 14 days, than spend the same money on Seabourn and get 7 days. If I was wealthy, and money didn't matter, that would be a different story, but until I hit the LOTTO, HAL, Princess, and X will continue to suit my cruising needs.

[AFuncruiser]

I love HAL’s sense of tradition, older cruisers, teak decks, art, and itineraries. I do not confuse premium cruising with traditional cruising. There is no doubt CCL has moved HAL to the mass market. CCl knows what they are doing least we forget CCL saved the HAL brand with their purchase.

If HAL would attempt to move up market their older HAL cruiser would drop them like a hot potato. Hal’s customer base of (senior) seniors would never stand for higher prices. HAL and CCL’s big problem is what happens as their older cruise base dies off. On this point I sense certain desperation in some of HAL’s cruise directors and Dutch.

I see the day coming when mass market ships like HAL give the cruise away and charge for every bed change, clean towel, all entertainment, all meals, operation of the ship etc, etc, etc. The daily service charge is just the start.

Dennis

Jacksonville, Fl

428 days at sea

36 cruises

[Alcarondas]

...waiter handing me, at the end of the cruise, a portfolio that he's autographed that is filled with all the menus from the voyage... white-gloved escort leading me to my cabin upon embarkation...

 

They were still doing this as late as 1999/2000. It was seriously cool, and I miss it quite a bit. (I still have 2 menu packages stored away with the rest of my memorabilia.)

 

While the bread pudding is killer, I think I'd give it up to have the other little touches back. They were just the sort of thing that made you feel special. It probably got expensive to print and give away all those menus, though. Cost-cutting, price points, and all that...