Monday, 29 July 2013

A reset for Carnival on Europe

A reset for Carnival on Europe

By Tom Stieghorst
*InsightThe Carnival Sunshine is hosting a media group on its current Mediterranean voyage, and the top concern of the European reporters onboard is Carnival Cruise Lines’ decision to go without a ship in Europe in 2014.
The Carnival Legend, which had been scheduled to sail in Europe next year, is being deployed to Australia, after a winter season in Tampa.  It seems to reverse a promising expansion of Carnival’s sales deployment into the U.K.
At a news conference, Carnival President Gerry Cahill said it ain’t necessarily so. 
“We’re not stopping marketing to the U.K. and Europe,” Cahill noted, saying it would continue to sell cruises to the Caribbean, New York and Barbados to Europeans.*TomStieghorst 
But Americans made up most of the passengers on a majority of the line's European itineraries.
“Carnival caters best to middle America,” Cahill continued. “The cost of an air ticket to Europe became very, very high, and it was causing a lot of our guests not to be able to afford to come.
“At the end of the day, when the air fare costs more than the price of the cruise, that’s a problem,” he said.
The reset on Europe comes as Carnival is withdrawing from several regional ports on the U.S. East Coast, such as Baltimore and Norfolk, Va. Tighter pollution rules mean higher costs for clean fuels at those ports, and Carnival has an aversion to higher costs. When low prices are such an important part of your strategy, anything that raises them means trouble.
So Carnival is increasingly returning to tried and true markets where it has had traditional success: sailing to the Bahamas and the Caribbean, primarily from ports in Florida.
It recently bolstered its Caribbean capacity from Port Canaveral, where the Sunshine will sail for much of 2014, and from New Orleans, where it will have two ships year-round. Miami, Tampa and Jacksonville will also be home to Carnival ships next year.
For many passengers, flying to Florida isn't as cheap as driving to the port, but it is a lot less expensive than flying to Europe. Travel agents can sell a fly-cruise to Florida because the airfare isn't that scary. But it does mean getting people excited about an area that many cruise passengers have seen before.
The traditional itineraries may not be the most exciting. But with costs rising, they're the ones that Carnival can sell at a price point that middle America can afford.  Europe on Carnival will have to wait for another year.