“There’s Just Too Much Demand”
So said a European river cruise executive at a travel show in February about current market conditions, as reported recently in an article entitled "Selling River Cruises? Better Get On Board Early" in Travel Market Report.
Certainly, it’s been a frothy few weeks for this rambunctious segment of the cruise industry. Where to begin? If you haven’t been keeping track, here’s just some of the news:
VRC Chairman Torstein Hagen says his goal is to operate 100 ships worldwide by 2020, including new vessels on US rivers.
Viking River Cruises christened 18 news vessels in Europe this past month, apparently setting a new achievement in the Guinness World Book of Records. This follows four new ships two years ago, another ten last year, and plans for another ten or 12 next year. The company also is strongly hinting that it will enter the US riverboat market by 2016, presumably on the Mississippi-Ohio river system with sleek, modern “non-steamboatin’” type vessels, for want of a better word. Chairman Torstein Hagen says his goal is to operate 100 ships by 2020, just six years away.
A relative newcomer to the US market, CroisiEurope just christened the 88-passenger Lafayette along with two smaller canal barges. At least three new European riverboats are planned for next year, and the company just completed the purchase of four ships in Southeast Asia from Mekong River Cruise Company. More boats are planned there, too, and for the Irrawaddy in Myanmar.
Avalon Waterways recently launched two new European riverboats and there are “plans to build more next year and in 2016.” Avalon’s Euro fleet is currently around 15 vessels, with a few more offering river cruises in China and Southeast Asia.
Tauck’s brand new 130-passenger Inspire has now commenced its European cruising season and will soon be followed by the sister ship Savor. This puts the Tauck fleet at a half-dozen. According to Rick Baron, Tauck managing director of worldwide accounts, "there's not enough supply."
The new 182-passenger Tauck Inspire. Photo: Tauck / Scylla A.G.
Australian-owned Scenic Cruises is also making big inroads into the US market, and is in the midst of launching two new 182-passenger vessels in Europe via its Emerald Waterways venture. 1960s supermodel Twiggy christened the "Star Ship" Emerald Sky earlier this week. Scenic itself markets another half-dozen European riverboat vessels. A recent article noted that Emerald plans to launch two additional ships next year “to keep up with the demand.”
AmaWaterways will begin operations of its new 164-passenger AmaSonata and AmaReina this summer, bringing to 14 the number of its vessels on Europe’s rivers alone. Two more are planned for 2015. The company also operates riverboats in Russia and Southeast Asia.
Actress Catherine Deneuve christening Uniworld's new SS Catherine last month. Photo: Ralph Grizzle.
Uniworld made a splash in late March with actress Catherine Deneuve’s christening of the 159-passenger SS Catherine. Uniworld now operates about a dozen boats in Europe, with additional river vessels in Egypt, China, Russia and Southeast Asia.
Let’s not forget the recent announcement by Luftner Cruises that it has launched a new Boston-based sales company to intensify its marketing penetration of North America. Amras Cruises will promote the company’s 11 European riverboats. This number will increase to 12 next season.
Grand Circle recently announced its acquisition of the 90-passenger Sea Cloud II to be renamed the Chanson. The vessel joins a dozen or so GCT riverboats in Europe and Russia, not to mention quite a few other small ships plying the world’s waterways.
Four new riverboats, similar to the Queen of the Mississippi, will join the American Cruise Line fleet over the next several years. Photo: American Cruise Line.
American Cruise Line announced just two months ago that it is building four new riverboats for the Mississippi-Ohio river system and the Columbia and Snake rivers in the Pacific Northwest. These vessels will be built in a traditional “steamboatin’” style, with functional paddlewheels.
Lindblad Expeditions seems poised to replace their 62-passenger Sea Bird and Sea Lion. While not riverboats, these shallow-draft vessels have competed on the Columbia and Snake rivers and the waters of Southwest Alaska, Baja California and the Sea of Cortez for two decades.
I’ve undoubtedly left a few worthy companies out of this line-up, announcing other revolutionary-design riverboats, celebrity christenings and statements of overwhelming demand.
Let me just say that this is all great news for the consumer, proving that healthy competition encourages fair pricing, the delivery of real value, and more comfortable and technologically advanced ships.
Readers of my blog know that I’m one of the original small ship advocates, promoting them for the better part of 30 years as the best way to experience a destination. Beyond being an advocate, I’ve had the tough chore of marketing small ships, including European riverboats, since the late 1980s. It’s been a great job, but I can tell you that it’s never been easy, even in the days when there weren’t so many brands clamoring for a share of the North American market.
But something seems to be missing in many of these recent articles, both in the statements from the riverboat operators themselves and also in the reporting by the travel media. For me, there are two major disconnects between what I’m reading on one hand and what I’m actually seeing in the marketplace on the other.
Major Disconnect #1
A panel of river cruise executives at the New York Times Travel Show in February flexed its collective marketing muscles, saying the segment has “potential for still more growth,” “there’s not enough supply,” “clients will miss out if they are buying last minute,” “there’s too much demand,” and my favorite: “Clients need to book a year in advance. And contrary to what people think, the best deals are in the brochure.”
“Marketing is a two-way street. It requires not only a multi-faceted outbound effort to promote one’s own product, but also a preternatural ability to listen; to observe; to put into perspective what’s happening throughout the entire industry segment; and to adjust accordingly.”
If your inbox looks anything like mine the past couple of weeks, you know this bravura rings a bit false. It doesn’t take much effort to call a travel agent or go online and find sizable discounts for the upcoming 2014 season, even two-for-one offers by some of the leading European riverboat operators. The best deals are in the brochures?
My hunch is that river cruise executives tend to look at the early deposits and healthy group blocks and mistakenly assume that a high percentage of this business will actually materialize. In a very competitive marketplace with many choices to agents and consumers, this rarely happens.
Emerald Sky crew enjoying the christening ceremonies last week. Photo: Teresa Machan / UK Telegraph.
Making it worse is the cavalier attitude of some sales executives who wouldn’t budge on their original group deals made last year with agencies and tour operators, even in the face of initial weak bookings from these usually reliable producers. They fail to see that a lack of early group bookings is an important barometer of market conditions and and indicator of what could be a glut of empty space as the season approaches.
Marketing is a two-way street. It requires not only a multi-faceted outbound effort to promote one’s own product, but also a preternatural ability to listen, to observe, to put into perspective what’s happening throughout the entire industry segment, and to adjust accordingly.
Major Disconnect #2
The travel media largely focuses on what the river cruise executives want it to cover: stateroom size and design details, architectural features of the latest new build, or how many vessels will be introduced next year. What is seldom asked by reporters is how the river cruise operator plans to provide a better destination experience, one that really engages the traveler in the region they’re interested in visiting. And one that engages them differently from their competitors.
I made the following comment last week in a Travel Weekly column by Michelle Baran, who compared her inspection trip last month aboard Uniworld’s new S.S. Catherine with a more recent visit aboard American Steamboat Company’s American Empress. I wrote in response:
There really is no need to compare the two [riverboats], any more than there is a need to compare the south of France with the Pacific Northwest. Unfortunately, small ship operators tend to over-focus on shipboard amenities, heated bathroom floors, what celebrity has christened the ship, etc. as important differentiating factors when in fact these mean very little to the end user. What is worth comparing is how well the different operators are successful at providing a real engagement for their passengers with what the destination has to offer. Sorry to be so blunt, but the ship is just a means to an end and not an end in itself. That’s not to say that comfort and quality of hardware aren’t important; they are. But I don’t believe they are the deciding factors for most travelers.
I’ve written about this concept in the past, in the final paragraphs of an earlier blog post. I don’t blame river cruise executives for being proud of the innovative features, amenities and cuisine offered aboard their vessels. And I know that different lines focus on various market demographics and methods of sales distribution, differentiating themselves in these non-product-related business strategies.
“River cruising is really about the destination—a region’s people, culture, beauty and history—and the ways in which this destination should be shared with the traveler.”
But are features and amenities the real reasons most clients book with a particular line? I don’t think so. If you really ask the passengers, you’ll find that their aspirations are about experiencing the destination in a comfortable but meaningful way; shipboard features are just one small aspect of that larger holiday vision. In my view, small ship operators shouldn’t feel the need to be overly focused on their amenities and hardware because river cruising is really about the destination—a region’s people, culture, beauty and history—and the ways in which this destination should be shared with the traveler before, during and after the cruise.
Viking River Cruises christened 18 vessels last month, all bound for Europe's rivers and waterways. Photo: Viking River Cruises.
By focusing more on the 4Es—Education, Enrichment, Entertainment and Engagement—in bringing a destination to life for their guests, small vessel operators can create a “sense of place” in ways that big ships can’t and their competitors don’t. My long experience in this industry has shown that this is what converts prospects, builds a loyal past passenger base and, ultimately, solidifies tariffs in the face of stiff competition.
Riverboat cruising is a wonderful way to travel and explore new destinations, cultures and communities. What are your thoughts on the expanding inventory of river cruise vessels? I'd love to hear your comments.