The Business of Cunard: a new President for North America and adjusting course?

[japyke]

Hello all fellow Cunarders. I’m not a big forum poster but I’m going to give it a shot and see if I can get a general Cunard thread going that people might contribute to and enjoy.

 

First things first. Cunard has a new President for North America, Richard Meadows and I think acknowledgement of this and a welcome are due in this forum. Afterall, many of us wouldn’t be here if we didn’t care. Welcome aboard Richard. From the press release we learn that Mr. Meadows has been with Carnival in various roles for 29 years and will continue to also be president of Seabourn, a roll he’s held since 2011. He is transitioning out of his Exec. VP position at Holland America. This suggests to me that Carnival has plans for Cunard, which I suspect, needs a little TLC. I think we can look to his success at Holland America and his experience with Seabourn for clues to the future. In these days of ever and ever larger fleets, it’s time to do something with Cunard. It must be very expensive for Carnival to support a leading brand with only 3 ships. Plus with it’s split English/N. American clientele and substantial operations on both sides of the Atlantic profitability must be challenged compared to it’s siblings in the World’s Leading Cruise Lines family.

 

It’s not that Cunard isn’t a great line but it does seem to have a bit of an identity crisis. It has the heritage, a true flagship, some unique itineraries, and a ‘class’ structure (Brittania and Grills, or ship within a ship, think MSC Yacht Club) which all the big lines seem to be moving toward. Yet it seems to struggle with filling it’s mid-sized ships without serious discounting. Disclosure: I’ll be the first to admit would preclude me as a customer should it end and I'll miss it. My hunch is new leadership is going to move in the direction of premium/luxury along the lines of Oceania which has been very successful, a line which, by the way and for those of you who have not heard, has been swallowed up by Norwegian. Inclusive premium or ‘near luxury’ is where it’s at these days, what with the aging of the boomers.

 

As for Cunard’s fleet I have a few things to mention. The QM2 is a keeper as we all know. She’s unique, magnificent, and necessary for the year round scheduled N. Atlantic service which is the foundation of the brand. Yes, she’ll need updating and maybe some reformatting but she’ll probably soldier on for the forseeable future. The lesser Queens however have a bit of a problem. These are maxed out Fincantieri Vista+ class vessels which may or may not have a long term future in the Cunard Fleet. With their single aisle (someone will hopefully correct my terminology) architecture in their public spaces they are a bit cramped and at present they are not set up for true alternative dining which I think it’s fair to say is here to stay. Plus they could easily be moved elsewhere in the Carnival fleet without major refitting. That leaves us with possible new builds and the following question: bigger or smaller? Does Cunard go the Viking Ocean or Oceania route with smaller premium ships (say 1200-1600 passengers) with larger staterooms and more interior space per passenger (This interior space is one of the things we love about the QM2), or does it go the HAL route with a post-panamax (130 ft. beam vs the QE/QV 106 ft. beam) ship like the new flagship Koningsdam with 2650 passengers, or does it combine the best of both worlds with a new Koningsdam sized ship with say 1800- 2000 passengers. The latter solution would give Cunard the largest Premium/Luxury ship out there with lot’s of space for larger balcony rooms (this is a very competitive statistic), lot’s of true alternative dining venues, and larger public spaces for all the enrichment that the Cunard clientele desires. The question might be whether they could fill a larger ship at consistently higher prices in a true inclusive premium/luxury format. I suspect that with the clientele Cunard has developed in the last 10 years they could.

 

I have not even touched on the whole itinerary component of Cunard's future and how this matters. I am not very qualified to opine as I’m not an experienced cruiser, having been on 5 cruises total. My first was a trip to Bermuda on the M/S Island Venture in 1972. I was 8 years old, lodged in the bow, seasick the whole time, and plunged my entire right arm into the tentacles of a Portugese man-of-war while swimming there. Ouch! A couple of years ago some friends of ours lured us onto the QM2 for a discount crossing, I found great success with ‘sea-bands’, played bridge non-stop, and I’ve been hooked ever since. We followed up two years later with a crossing on Oceania Marina. Last year we did back to back January crossings on the QM2 and QE; That’s it. On the last trip I picked up a copy of ‘Giants of the Seas’ by Aaron Saunders. This book combined with a love for business have me following the industry with a passion (otherwise known as an addiction). It’s fascinating! This year we’re booked on the QV for the Panama Canal, I’ll let you know how it goes!

 

Thanks for reading and I hope some of you share your thoughts. I look forward to reading them.

[pmb1]

We won't have a clue what this executive change means for Cunard until well into 2015. Until then speculation is pointless. Meanwhile, lets wish the man well in his new job and hope that he has sailed on QM2 at least once, preferably incognito.

[Classiccruiser777]

I'd love to see Cunard go with smaller ships, more intimate itineraries without the need for tenders, less "nickel and dimming," and more US/Pacific Rim options. The QE2 was big enough for me.

[fantasy51]

Japyke, welcome to this posting business! I enjoyed reading your first-ever Cunard post. I hope you continue to contribute.

 

You've pointed out a few things that I did not know. Thank you for that.

 

Your speculation is very interesting. Only time will tell, of course, but you have pointed out some interesting ways for Cunard to head in the future. I love things as they are because I manage to sail on a luxury cruise at a discounted price. I would hate Cunard to be priced out of my range, but c'est la vie!

 

My cruising has been on Princess (3 cruises), Oceania Riviera (one cruise in her first season) and Cunard (16 days to go before I reach Diamond level). I loved the elegance of Riviera but I feel at home on Cunard, especially QV, and her ballrooms and Dance Hosts sell Cunard line for me every time. I would hate to see any changes to that or to prices that allow me to indulge.

[Ray66]

From the Cruise Industry news website:

 

Cunard today announced that Richard Meadows has been appointed President of Cunard Line – North America, assuming operating responsibility for the iconic Cunard brand throughout the North American continent from 1 December 2014.

 

He will report to David Noyes, CEO of Cunard Line. Meadows will retain his role as President of Seabourn, leading all business and global operations for the ultra-luxury cruise line.

 

“With Rick having worked at so many brands within the Carnival Corporation portfolio, we are eager to leverage his knowledge, experience and skills to advance the Cunard brand in North America,” said Noyes from the Line’s headquarters in Southampton. “His background in leading Seabourn is particularly valuable, as he understands well the nuances of delivering superior service and enriching onboard experiences – the things that directly appeal to Cunard passengers. We are thrilled to have him join our team.”

 

http://www.cruiseindustrynews.com/cruise-news/11892-richard-meadows-named-president-of-cunard-line--north-america.html

 

David Noyes is Executive Vice President, Operations at Carnival UK. Responsible for leading the shipboard and shoreside operational teams for both Cunard and P&O Cruises brands for Carnival UK.

[Artemis]

Welcome, japyke! Thank you for your thought-provoking post. I am an avid traveler, and I have greatly enjoyed our two Cunard voyages, both crossings on QM2. However, as both a traveler and Carnival shareholder, I strongly feel Cunard needs to figure out a sustainable brand identity for the future. I look forward to watching how new leadership tackles the need to evolve.

 

 

Sent from my iPad using Cruise Critic Forums mobile app

[deck chair]

Hello:

 

As one who has sailed with Cunard countless times (Diamond several times over) this is what I hope for going forward:

 

That Cunard does not try to be all things to all people thus foolishly diluting the brand.

That Cunard does not do away with the formal ambiance aboard their ships. (In the evening.)

That Cunard does not do away with all the wonderful musicians it has on its ships as many lines have done. (One reason I will never sail with HAL again.)

That Cunard will expand its loyalty program above the Diamond level.

That Cunard will continue to and expand and plan longer cruises with many sea days.

That Cunard will add some ships to as to provide more choices.

That Cunard does not go to anytime dining outside the alternative dining venues.

That Cunard does not cut back on the waiters and cabin stewards to save money such as HAL has done. (Another reason I will not sail with HAL again.)

 

I love sailing on the Queen Mary back and forth to Europe but it Cunard fumbles I will simply fly and book with Crystal for cruises.

 

That is it for now....your ideas welcomed!

 

DECK CHAIR

[pris993]

I am fairly new to Cunard, but not new to cruising, have 50+ cruises on 9 different lines. More recently, cruise Princess, HAL, Celebrity, Cunard and NCL.

 

We did our first Cunard cruise on the OV a couple of years ago, loved it!! So much booked a second cruise within 6 months. Cunard and the OV surpassed our expectations, on both cruises (a 16 day TA and a 12 Eastern Mediterranean). Found food, service, entertainment aboard in a balcony cabin consistently excellent.

 

We just booked our first OM2 cruise for Sept 2015, a 14 day cruise out of New York to Quebec City and back. Looking forward to it.

 

What we like best about Cunard is it's more formal atmosphere, would really hate to see that change in the future. We are not fans of freestyle cruising or the more casual attire that one finds on more and more on other lines.

 

The size and atmosphere on the OV is just right for us, we will see how we like the OM2.

[Salacia]

We won't have a clue what this executive change means for Cunard until well into 2015. Until then speculation is pointless. Meanwhile, lets wish the man well in his new job and hope that he has sailed on QM2 at least once, preferably incognito.

 

I agree with that - moreover, I am curious about what Richard Meadows' salary and compensation package will be in his new position. By way of reference, Donald Arnold, President and CEO of the Carnival Line has a total compensation package of $7,856,350 per year [source: http://www1.salary.com/CARNIVAL-CORP-PLC-GBR-Executive-Salaries.html] - And he isn't even the highest paid executive!

 

I have no doubts that CCL stocks will continue to yield dividends -after all, the Board votes for that, and they benefit most. What is chump change to stockholders holding a hundred shares is big money to those holding the largest amount of shares (Mr. Arison, and the Board.)

 

If only executives believed enough in what could be done to make ocean voyages safer, more pleasant, and more realistic in regards to revenue, changes could be made. Stop the bleeding by reducing salaries for corporate execs, increase the salaries for a well trained staff and crew, maintain ships properly. Don't promise what you can't deliver.

<end of rant>

 

Salacia

[Skipper Tim]

Japyke makes some very interesting points.

 

The OP rightly points out that Cunard is something of an oddity. It is arguably the most iconic brand in the industry but only has three ships. I thought I would slip in "the industry" but the truth is Cunard's industry is also an oddity. It markets itself much as the original design aims of the QE2 in being a hybrid cruise and ocean liner.

 

These days, I am sure most transatlantic guests make the crossing for pleasure but there will still be a significant number, I know of several personally, who use the QM2 as a means of transport because of the amount of luggage they have, because they don't like flying or airports these days or any number of other reasons. Cunard have no competition in the scheduled North Atlantic sea passenger business - yet, there is the Chinese-built Titanic II threatening to join in.

 

Then there is the traditional World Cruise - a 3 month journey giving passing glimpses of parts of the World without ever having to unpack or even change your restaurant table or table mates. I find it very eccentric. My QE2 Southampton to New York crossing was actually the first leg of the QE2's World Cruise that year. My fellow guests were interesting, well-heeled, of a certain age and yes, a little eccentric. Despite their excessive durations, the World cruises attract some of the highest rates per night of any of Cunard's itineraries.

 

The rest of the business is more conventional cruising with much competition. Yes, I am sure that MSC copied their 'ship within a ship' Yacht Club directly from the grill classes of Cunard and successful it is too. There are other similarities too: MSC is an 'Italian-themed' Italian cruise line; Cunard a 'British-themed' American line. They both have local operations to 'localise' the produce they are selling. In the case of Cunard this is limited to North America and the UK. The rest of the World may get local Cunard offices but they sell either the UK or NA product. MSC on the other hand have carved the World up into regions and each region gets a totally different product right down to on board service (it depends where you book as to what is included) and itineraries - rarely is the same MSC itinerary available to book in two different geographical regions though they may overlap and be on the same ship!

 

The contrast between MSC and Cunard could not be greater in terms of expansion. MSC have four new mega ships under construction with options for four more. Between the cheeky new entrants, where does this quirky Cunard line, with its ageing past clientele go?

 

The transatlantic service is core to the Cunard branding and probably very profitable. I note however that the QM2 takes two days longer than the QE2 ever did - less speed means lower net fuel costs, more time means more onboard revenue. This is a well-run part of the business but currently only occupies one ship for part of her time.

 

The World Cruise is also iconic but only open to the relatively well-heeled with much time on their hands. This is far more likely to me a 'once in a lifetime' holiday with little prospect for repeat business, at least on another World cruise. My mother can testify that the World Cruise crowd are very, very different to the 'two weeks round the Med' crowd. The twain may never meet. The World Cruise business looks profitable but again, hard to expand - unless there was far better marketing. It should be the thing to do upon retirment. Honestly, I think the marketing people at Cuard have no idea.

 

So we have we have a US cruise line with a split NA/UK personality, marketed on the basis of two core areas of business with little prospect of expansion, still catering for the well-heeled and retired, prostituted to a younger crowd as and when commercial necessities dictate and facing ever-increasing competition - with a severe risk on the North Atlantic route.

 

Well, I have to agree with the OP. It was a mistake to bring two ships which are nothing more than cruise liners into the fleet. After the triumph, originality and genius of the QM2, the QV and QE diluted the brand terribly. They got it wrong, big time.

 

1. Divest Cunard of these errant ships. There are plenty of places within Carnival they could go.

2. Commission the QM3, QM4 and the most luxurious new QM all based on the current QM2. They need dedicated single cabins and areas. Most of us are single now.

3. Make the transatlantic service weekly, year-round. "A luxury alternative to flying". (Two ships employed. Always sell round-trips for less than two one-ways.)

4. Put one ship on permanent World Cruise duty. Four per year, like clockwork.

5. Resurrect the brand! Drop the med-trawls from Southampton. Be serious, at least go through Suez and take people to places they could not get to easily or comfortably otherwise.

 

I can't help but feel that Carnival has thoroughly squandered a fantastic asset in Cunard. They bring their wrong knowledge and apply it ignorantly. Better to set Cunard sail free.

 

Those are my thoughts.

Edited November 24, 2014 by Skipper Tim

[Salacia]

Hi Tim. Thanks for your comments which were very interesting and thought provoking. I will give them careful consideration before commentating. Regards, -S

Edited November 24, 2014 by Salacia

[Dancer Bob]

Does anyone know for sure that QM2 is actually making a profit?

[Salacia]

Does anyone know for sure that QM2 is actually making a profit?[/quote

 

Dancer Bob, I have been unable to find that information.

 

But I did note that the salaries of the CCL executives has not been reduced - quite the opposite in fact, as has been the expenditure for marketing promotions, especially promotions to attract first time cruisers. -S.

[pmb1]

Does anyone know for sure that QM2 is actually making a profit?

Well a year ago during the 200th crossing I heard Stephen Payne say that of the three great examples of Anglo-French cooperation of recent decades - the Concorde, the Chunnel, and Queen Mary 2 - only Queen Mary 2 made money.

[Thaxted]

Does anyone know for sure that QM2 is actually making a profit?

 

If we can believe the powers that be, it would seem to be doing just that. In their article in Travel Weekly celebrating QM2's tenth anniversary, Rebecca Tobin and Donna Tunney quote Micky Anson as saying that QM2 has been "very profitable" for Carnival. To which the recently departed Peter Shanks added, "She's the best-performing Cunard ship by a mile, and she's always done well on the transatlantic," noting that sales of QM2's crossings tend to remain strong "even when the economy's tougher and airfares are higher." http://www.travelweekly.com/Cruise-Travel/Queen-Mary-2---A-decade-at-sea/

[Salacia]

Well a year ago during the 200th crossing I heard Stephen Payne say that of the three great examples of Anglo-French cooperation of recent decades - the Concorde, the Chunnel, and Queen Mary 2 - only Queen Mary 2 made money.

 

Ah, but that is not the same thing as making a profit, is it?

[laktex]

Well I am afraid I somewhat disagree with the OP concerning the Queens Victoria and Elizabeth. Personally I find them very pleasant ships and as I have posted several times have certain features which (again in my opinion) surpass QM2. eg I far prefer the Grills arrangement on Victoria and Elizabeth, The Commodore Club is a nicer place, The Lido buffet is vastly superior to QM2 Kings Court, and the Queens Room layout is to my preference. For many voyages I would choose them over QM2 and even my experiences on them as they cross the Atlantic have been wonderful journeys.

[Austcruiser84]

Cunard won't move away from the QE and QV. Despite some posters' claims to the contrary, these are excellent ships and it is clear Cunard thinks so given extensive and expensive refits.

 

I'm all for an interesting discussion, but this is pure hypothetical. The OP is WAY off the mark with this thread.

[Austcruiser84]

Well, I have to agree with the OP. It was a mistake to bring two ships which are nothing more than cruise liners into the fleet. After the triumph, originality and genius of the QM2, the QV and QE diluted the brand terribly. They got it wrong, big time.

 

1. Divest Cunard of these errant ships. There are plenty of places within Carnival they could go.

2. Commission the QM3, QM4 and the most luxurious new QM all based on the current QM2. They need dedicated single cabins and areas. Most of us are single now.

3. Make the transatlantic service weekly, year-round. "A luxury alternative to flying". (Two ships employed. Always sell round-trips for less than two one-ways.)

4. Put one ship on permanent World Cruise duty. Four per year, like clockwork.

5. Resurrect the brand! Drop the med-trawls from Southampton. Be serious, at least go through Suez and take people to places they could not get to easily or comfortably otherwise.

 

I can't help but feel that Carnival has thoroughly squandered a fantastic asset in Cunard. They bring their wrong knowledge and apply it ignorantly. Better to set Cunard sail free.

 

Those are my thoughts.

 

Couldn't disagree more. QE and QV are popular ships. Unfortunately, both debuted during the worst financial crisis to hit Western economies in a long time. America and the UK (the largest passenger demographics for Cunard) are only just recovering.

 

Despite being maxed out Vista ships, the two Cunarders are beautiful on the inside and are far more aesthetically appealing on the outside than most ships these days. I actually found the QE to be better than QM2 in a number of ways.

 

As for your suggestions on how to reshape the brand: never going to happen.

 

There is not a market for multiple QM2 sized luxury liners, nor is there a market for year round TAs. If there was, Cunard would certainly have already gone this way. They aren't short of cash, what with Carnival backing them.

 

As for criticism of the Med voyages - there is a reason Cunard has opted for this: it sells. Week long (or longer if you package multiple segments) voyages work well for the average working person who doesn't have the time or money to cruise for weeks or a month at a time. I suspect Cunard caught onto the fact that the fastest growing demographic in cruising today isn't retirees.

 

Wall that said, a little fantasy cruise line management never hurt anyone. For my money, I'd like to see some Asia/Australia/Pacific cruising with Cunard outside the World Cruise season. Of course, that is as likely as Cunard building multiple QM2s.

[BlueRiband]

...Make the transatlantic service weekly, year-round. "A luxury alternative to flying". (Two ships employed. Always sell round-trips for less than two one-ways.)...

 

Much as I like that thought there are not enough of us to support weekly, year round, transatlantic service. It there was QM2 would have Aquitania 2 as a running mate.

 

Just look at past schedules where QM2 would make her first WB TA in mid to late April. Now it's mid-May. April apparently attracted only the bargain hunters. It was more profitable to keep QM2 on a longer world voyage.

Edited November 27, 2014 by BlueRiband

[Classiccruiser777]

Ah, but that is not the same thing as making a profit, is it?

 

I have been on three crossings with Stephen Payne and we have talked many times. He told me that QM2 had paid for herself in her first 5 years of service.

 

As an add-on, the QE and QV have won me over. IMO, what makes Cunard Cunard is the ambiance and service that goes on inside the ship, not the hull.

[Skipper Tim]

Almost all the comments defending the QV and QE have been from the perspective of Grill Class. Relatively very few Cunard guests get to experience this.

 

Classiccruiser777 made the most inteligent point that the Cunard experience is down to the service not the hull. To a degree, I agree. If this were the case however, why is there not a huge chain of luxury Cunard hotels around the World offering 'White Star' service? Of course, there should be.

 

No, the Cunard brand at sea is about ocean liners on top of the service. The QV and QE are not ocean liners. You may have a lovely time on them but you may have a lovely time in a tent sharing a chemical toilet as long as it comes with White Star service. "May I wipe your bottom sir?".

 

The QV and QE may be very pleasant - then shouldn't all cruiseliners be? - but that is it - they are cruiseliiners. The Cunard brand has rested upon its reputation for ocean-going vessels, not floating blocks of flats like mere cruiseliners.

 

"You may fool some of the people, some of the time"...

 

Ocean-going ships have the power and speed to cross vast distances at speed regardless of the weather. This gave Cunard the advantage to run the regular tranatlantic crossing in 5 days (not the current timetabled 7) as well as reach distant parts of the globe on schedule and in half the time of the average cruiseliner. Such a reputation should not have been messed with.

 

Yes, fuel is more expensive now but Cunard already charges a hefty premium above cruise lines to cover it.

 

What is Cunard now? A 'Cunard-themed' Carnival cruise line?

Edited November 28, 2014 by Skipper Tim

[balf]

Classiccruiser777 made the most inteligent point that the Cunard experience is down to the service not the hull. To a degree, I agree. If this were the case however, why is there not a huge chain of luxury Cunard hotels around the World offering 'White Star' service? Of course, there should be.

 

?

 

Cunard would have to improve the fabled White Star service to compete in the

Luxury hotel market.

 

David.

[Austcruiser84]

Almost all the comments defending the QV and QE have been from the perspective of Grill Class. Relatively very few Cunard guests get to experience this.

 

Classiccruiser777 made the most inteligent point that the Cunard experience is down to the service not the hull. To a degree, I agree. If this were the case however, why is there not a huge chain of luxury Cunard hotels around the World offering 'White Star' service? Of course, there should be.

 

No, the Cunard brand at sea is about ocean liners on top of the service. The QV and QE are not ocean liners. You may have a lovely time on them but you may have a lovely time in a tent sharing a chemical toilet as long as it comes with White Star service. "May I wipe your bottom sir?".

 

The QV and QE may be very pleasant - then shouldn't all cruiseliners be? - but that is it - they are cruiseliiners. The Cunard brand has rested upon its reputation for ocean-going vessels, not floating blocks of flats like mere cruiseliners.

 

"You may fool some of the people, some of the time"...

 

Ocean-going ships have the power and speed to cross vast distances at speed regardless of the weather. This gave Cunard the advantage to run the regular tranatlantic crossing in 5 days (not the current timetabled 7) as well as reach distant parts of the globe on schedule and in half the time of the average cruiseliner. Such a reputation should not have been messed with.

 

Yes, fuel is more expensive now but Cunard already charges a hefty premium above cruise lines to cover it.

 

What is Cunard now? A 'Cunard-themed' Carnival cruise line?

 

You're living in a by-gone era. The days of high speed TA crossings are over. There is no need for them in the jet age. Not to mention the exorbitant cost of fuel in pushing the engines so much.

 

Cunard has actually been very clever moving from 5 to 7 day crossings. Not only are they saving A LOT on fuel, but passengers are spending more money while at sea. Just like the Cunard of old, it's ultimately about making money. However, all passengers today get a luxury experience, unlike most in the old days who slummed it in the hull.

 

The good thing about the QE and QV is they are better suited to calm water cruising. QM2 is built for the Atlantic. The ships complement each other nicely, giving Cunard brand strength.

 

As for QE, I found Britannia class to be excellent. in fact, I received better service there than in the Q1 on QM2. As someone who cares about these things and who demands luxury on travels, I would say you need to experience QE before writing nostalgic, misinformed and traditionalist 'it's not better than the QE2' posts.

[bobby1119]

The comments in this thread make for very interesting reading.

 

The North American market is Cunard's most difficult-to-sell market. This management move is no doubt an attempt to address this issue.

 

Many N. America sailings are deeply discounted, especially the off-season crossings. Queen Mary 2 has been almost completely pulled from the Caribbean market which is a difficult sell.

 

Cunard management will follow the money, understandingly, with little regard to preserving the rich heritage the brand purports to offer.