Richard Turen
Over dinner with some industry friends two weeks ago, I was asked if I could be a speck on the wall of a cruise line boardroom, which line I would choose. The obvious answer these days is Crystal. But that is not how I replied.
I am intrigued by Oceania Cruises and the line's willingness to break the mold of traditional cruising in some pretty dramatic ways.
In the summer of 2013, there were some intriguing discussions in the Oceania boardroom in Miami. Itinerary planners had an idea, and they had to sell a skeptical chairman Frank Del Rio on the idea. If it didn't work, it could turn out to be a rather costly mistake.
The idea put forth in those meetings concerned the upending of the traditional 90- to 110-day world cruise, a staple of the industry for decades.
The planners at Oceania, including then-president Kunal Kamlani, suggested taking the 684-passenger Insignia and stretching the world cruise scheduled to depart on Jan. 10, 2015 by two months. They were proposing something revolutionary: a six-month itinerary visiting 89 ports in 44 countries.
The discussion must have been fascinating. How do you prove there is a sufficient number of guests who want to be at sea for six months? How would you possibly be able to handle the value issue when your world cruise is so much longer than those being offered by any of your competitors?
Del Rio saw the wisdom of the plan and took a chance. The result was the fastest-selling world cruise in recent history. The ship was essentially sold out in a matter of weeks after it was announced in July 2013.
Guests were attracted by the line's ability to market the fact that the extra time would enable guests to truly see the world with many more overnights in port before moving on to the next destination.
These world cruises have traditionally departed just after New Year. There are symbolic reasons in that, but perhaps the Oceania itinerary planners saw something else. Winters were getting worse, more and more boomers and retirees were purchasing winter escape homes. People just felt they had to get away from the increasingly brutal winters in so many parts of the country.
So the concept of a winter cruise, a world cruise that could follow the sun to warm-weather destinations, had great appeal. It also meant that much of winter could simply be avoided.
Then there is the great marketing reality that no one dares mention. You won't see it addressed in brochures, and you won't hear it discussed at industry events. Our clients love to name-drop where they have been when they get back home. The product that gives them the best bragging rights is almost always going to be highly successful. And what is more brag-worthy than saying you spent the winter on the longest world cruise in modern history?
With this background, Bob Binder, one of the co-founders of Oceania and the line's current president and CEO, called a meeting last fall in headquarters attended by some of Binder's closest associates, including long-time sales and marketing executive vice president James Rodriguez. And from that meeting, an idea emerged that really excites me because of its long-range potential effect on the way we sell cruises.
Why not, thought Binder, separate out a new demographic from the world cruises? People who go on world cruises are interested in seeing the world in one fell swoop as comfortably and in the most cost-effective manner as possible. But, he argued, there is another demographic being ignored by the industry: the snowbirds who need to get away from punishing winter weather.
What emerged from that meeting was a creative new idea that Oceania has branded the Snowbirds in Residence program. Travel sellers now have the opportunity to compete with the real estate sector by promoting extended cruises specifically designed for residents of the Northeast and Midwest seeking to exchange the snow and biting cold for 58 or 72 days of tropical breezes and warmth.
The Oceania Marina departs on Jan. 22 on a 58-day itinerary, while the Riviera will sail for 72 days, departing on Jan. 3. Prices start at $15,599 per guest and $19,999, respectively. These prices include airfare, up to $4,200 in shipboard credits, beverage packages and up to 42 shore excursions. All gratuities are included.
But it is the marketing of this product that really interests me, because I think Oceania has tapped into a new source of revenue for agents willing to think outside the box. Here is why I feel this way:
• Someone is finally positioning cruise ships as what they are or have the potential to be: private homes or hotel rooms that have the amazing ability to float from sunny destination to sunny destination.
• Yes, 25 million people will cruise this year. But how many snowbirds will flee the cold climes in search of warmth? And what will they get for their efforts? Likely it will be a condominium rental overpriced during the winter season. Food won't be included. Housekeeping won't be included. Security may not be included. They will have to drive everywhere. They will find crowded and expensive restaurants. They will have to spend countless hours shopping for food. If storms come, their condo will not be able to seek safe harbor.
• We have left snowbirds entirely to the real estate sector. I want to get them to see the value of talking with a caring travel consultant about planning their winter escape. I now have an alternative to offer them: I can rent them a condominium that floats from one beautiful destination to another. My condo will provide them with gourmet food at no additional cost. My condo has a Canyon Ranch spa. Does yours? My condo has a staff of 800 whose sole job is to look after you. How many people look after you at your condo?
Oh, and by the way, my condo comes with a housekeeping staff that cleans every morning and turns down your bed each evening. Does your condo leave a chocolate on your pillow?
Of course, we've always had the ability to string together a pair of tropical cruises in winter and sell it to our clients as an alternative to a home purchase or rental in the Sun Belt. But we've never done it, and the vast potential of this new market for a cruise consultant's services has remained largely untapped. What Oceania has done is to create an entirely new revenue stream potential for agency owners who are not afraid to venture into an area of sales not previously associated with the travel sector.
Running the numbers can be fun. Think of going to the same winter getaway year after year. Think of the cost of resort accommodations, taxes, flights, autos, meals, entertainment, condo dues, insurance, etc. Now, think about floating through paradise in winter at a cost per couple of under $4,000 per week.
The media have focused attention on cruise line "live aboards," like the late Beatrice Miller, who lived aboard Cunard's Queen Elizabeth 2 for nine years; Lee Wachstetter, who lived on the Crystal Serenity for almost a decade; and Mario Salcedo, who has taken more than 950 cruises over 20 years, mostly on Royal Caribbean.
The figure often quoted is that Mrs. Wachstetter paid $164,000 per year for her stateroom.
These are interesting stories, but I'm not sure there is a business model here. I find the new Oceania initiative much more interesting and adaptable as a source of upscale agency business. When you think of the number of second-home owners and retirees seeking sun and relaxation, the benefits of entering the winter floating-resort market are obvious.
I would suggest that the Snowbirds in Residence program be made a case study at your agency. Hopefully, Oceania will provide agents and consortia with actual winter condo and resort costing versus this floating home concept. Agents need to be armed with specific comparisons. I trust that Oceania will also mention the advantages of having a qualified doctor's office just two or three decks down.
If you are as excited about this concept as I am, start looking for the very best real estate agent you can find who shares a passion for travel. They might love selling this vacation home alternative.