Larger cruise ships on local deployments expected to be first to return

Larger cruise ships with local deployments will be the first to come back on sale following Covid-19, the former boss of Azamara has predicted.

Larry Pimentel, who stepped aside from his role as president and chief executive in April as the line made plans to survive the pandemic, said he expected older, smaller ships with international deployments to “sit on the sidelines simply because of the air travel” as travel resumes.

Speaking on a Travel Weekly webcast, he said: “Think about taking a 10, 12 or 15-hour flight in coach and the denseness that you’d find on these carriers. I’m not going to do that at the moment.

Click on the image to watch the Chat.


“We’re going to find big ships with local deployments are the first to come back,” Pimentel said. “You’re probably going to find short rotations out of the States and you’ll probably get three or four-day rotations going to private islands. Why? Private islands can secure the safety and health in all areas without a bunch of nonsensical politics layered in it, which makes things even more complex and, frankly, angers a lot of people.”

Pimentel said small luxury vessels sailing to less crowded destinations may also come back sooner, but said: “We still have an issue with social distancing in an industry that was all about the connection on the ships, so herein lies a paradoxical sort of scenario.”

Pimentel predicted many ships would not come back into the sector at as line battle with cash flow issues.

“Cruise lines need the cash right now,” he said, noting that the only income lines are bringing in is onboard revenue as cabins on 2021 sailings will be filled up with people who deferred from this year and used their future cruise credits to rebook. “So the cruise industry is going to have a terrible 2020, and a terrible economic 2021.”

Pimentel said: “The ships that come back are likely to fill up as there won’t be as many ships operating. Let’s face it, there will be some ships that will sit in the sidelines that won’t come back to the industry. The whole industry closed down in about three weeks. There is no way in hell we’re coming back in three weeks or even three months.”

He also predicted that “new cruise ship orders will slow so significantly that it will almost seem like they are stopping altogether, compared to we’ve seen over the last couple of years”.

“I fully expect a lot of options not to be secured,” he said. “This [recovery from the pandemic] is not months, this is a multi-year process.”

He pointed out that there are 19 new ocean ships on order this year, adding: “That’s a lot of vessels and right now, who needs more capacity? Nobody. But in the future, demand will be there. I’ve learned this about the consumer – once they feel even a little bit comfortable, and the value seems there, they will book.”

Tour company in development at Royal Caribbean

By Tom Stieghorst

Royal Caribbean Cruises Ltd. confirmed that it is working on a new subsidiary that would be focused on developing and marketing land tours around the globe.

The company is still in formation, but RCCL has named John Weis, its former vice president of global tour operations, to spearhead development of the unit.

RCCL already offers cruise guests thousands of tours in hundreds of destinations. It said the new subsidiary, to be called TourTrek, will operate in 90 countries.

In a brief statement about the company, Royal Caribbean described TourTrek as a technology company that will be wholly owned by RCCL.

Weis will report to Larry Pimentel, president of Azamara Club Cruises and chief destination experience officer for Azamara, Royal Caribbean International and Celebrity Cruises.

Pimentel has made destination a core attribute of Azamara, starting with Azamazing Evenings, a program of customized night events for guests on Azamara cruises.

Celebrity has also been venturing into more elaborate shore excursions. In March, Celebrity said it would begin offering a a land-sea package this fall that combines five nights in Africa with an 11- or 12-day Black Sea cruise.

The land portion includes bookings at game lodges or four- and five-star hotels in Kenya and three safari expeditions, followed by transfers to Istanbul, where guests board Celebrity Constellation with stops on the Black Sea and in the Greek isles.

Celebrity President Michael Bayley said the tours quickly sold out.

RCCL said that it has hired longtime Carnival Corp. executive Roberta Jacoby to move into the role previously occupied by Weis. Her title will be managing director of global tour operations.

Jacoby retired in 2011 after 35 years with Carnival. Her final job was as senior vice president of corporate special projects.

RCCL said that further details about TourTrek will become available over the coming months. 

Cruise lines increasingly onboard with overnights

By Tom Stieghorst

The emergence of evening port stays as a defining feature for Azamara Club Cruises has focused a spotlight on the growing use of this alternate deployment strategy.

Traditionally, cruise lines have offered few if any overnight stays and generally leave ports of call before sunset. Large-ship lines in particular have made their vessels into evening playgrounds.

“The shipping industry as a whole has built massively beautiful, stunning ships … but oftentimes in many people’s minds the ship became the destination,” said Azamara President and CEO Larry Pimentel.

A number of lines are flipping that playbook, making the actual destination the evening focal point.

“We have to think not outside the box, but outside the ship,” Pimentel said.

Other lines that have embraced overnight stays include Crystal Cruises, Seabourn, Silversea Cruises and Oceania, whose fleet deploys some of the same type of ships that Azamara does.

By offering more overnight stays in port, cruise lines risk declines in some key sources of onboard revenue, such as casinos, duty-free shops, bars and alternative restaurants.

Almost all the lines pursuing the strategy are upscale, small-ship brands with inclusive amenity policies and worldwide itineraries with a preponderance of longer voyages.

Crystal Cruises, for example, is offering a 14-day Asian cruise next January that overnights both before it departs Singapore and after it terminates in Hong Kong, as well as a mid-cruise overnight in Ho Chi Minh City, Vietnam.

Overnights have practical benefits in addition to giving guests more sightseeing time.

“When you overnight the day you arrive at port, the number of bags that miss the cruise drops to zero,” said Thomas Mazloum, Crystal’s senior vice president for operations.

Crystal is offering some epic holiday port stays, including a 2016 New Year’s Eve overnight in Sydney, Australia, that includes chartered catamarans to see a fireworks display.

Another line that is increasing the number of overnight stays it offers is Silversea Cruises, which for 2014-15 has increased to two days each its overnights in Livorno and Sorrento, Italy; Bordeaux, France; and Leith, the port for Edinburgh, Scotland.

Silversea has also increased late-night departures in cities with desirable night-life scenes, including St. Tropez, Ibiza, Monaco, Portofino, St. Barts and Amsterdam, spokesman Brad Ball said.

Likewise, Oceania Cruises and Regent Seven Seas Cruises have a list of nearly two dozen ports where they conduct overnights, including stays of more than one night in Jerusalem, St. Petersburg, Shanghai and Yangon, Myanmar.

Pimentel said that because several cruise lines have acquired some of the former Renaissance Cruises R-class ships, it is hard to compete by claiming unique hardware. And some competitors have more luxurious vessels.

“I am not naive about the fact that the ships are 13 to 14 years old,” Pimentel conceded. “I do not have new tonnage.“

But as long as he can offer a unique experience, Pimentel said, people will seek it out.

That also is the thinking behind Costa Cruises’ neoCollection, a portfolio of older, smaller ships that Costa is promoting as “slow cruising.”

Many neoCollection itineraries are exclusive to the line’s smaller “neo” ships, which can sail to destinations inaccessible to larger vessels. Itineraries are designed with longer stopovers at each port — often overnight and part of the next day — to allow maximum time on shore.
Ships in the collection include the Costa neoRiviera (624 cabins) and Costa neoRomantica (789 cabins).

Pimentel acknowledged that other cruise lines are offering some overnights but said no one else offers at least one on every voyage. “Nobody hits as much of this as we do,” he said.
Building a collection of evening tours has taken time, Pimentel said, because tour operators weren’t accustomed to having ships in port so late.

Azamazing Evenings, Azamara’s first evening product announced last year, included special events such as an operatic recital at a castle in Tuscany.

Each cruise had one such evening, which was included in the base fare and was designed to accommodate all 694 passengers who can be accommodated at dual capacity on an Azamara ship.

Now, beginning with the summer season in Europe, Azamara will roll out Nights and Cool Places. Unlike Azamazing Evenings, they will be fee-extra and are designed for a couple dozen guests at a time.
They will also take place after guests have dined on the ship, making the prices more affordable.

Examples include a visit to the Picasso Museum in Malaga, and a tram ride to a peak for a private concert and to view the laser light show in Hong Kong harbor.

A second program, called Insider Access, will take guests to private homes for immersion experiences or connect them to locals in ways that conventional tours do not.

Prices will start at $120 to $150 and run up to $800 for insider programs with elite personalities.

“There’s a lot of human effort that goes into making this happen,” Pimentel said.

He said that with relatively few slots in each night tour, he expects them to sell out at first. “We will add more because communities have more than one cool thing,” Pimentel said.

One factor that restricts cruise lines at night is that port labor agreements sometimes limit the availability of workers, or make them more expensive. Crystal’s Mazloum said that can make it challenging when a ship overnights pre-cruise and guests arrive after-hours.

By staying in port more days, ships also incur more port charges for dock space, security and services, although that is partly or wholly offset by fuel savings because the ship is not moving, cruise executives said.

Big Interview: Azamara boss looking to build on 'explosive' UK growth

By Hollie-Rae Merrick

Azamara chief executive outlines his UK plans for the line to Hollie-Rae Merrick

Azamara Club Cruises is looking to increase its presence in the UK market by targeting “high‑value customers” through luxury agents.

Larry Pimentel, the brand’s chief executive and president, says the company needs to push forward in increasing awareness in the UK and that first-time cruisers need to be a focus for the line.

His comments on the future of Azamara come as the brand unveiled Richard Twynam as its first dedicated managing director for the UK and Ireland.

Twynam, who takes up his position in the new year, has almost 20 years’ experience in the industry, having previously worked at Virgin Holidays Cruises and Kuoni. He will lead a 10-strong team including new commercial director David Duff.

As part of that, there will be a three‑strong sales team and a marketing and PR manager supported by a trade marketing executive for the first time.

The new team is being put in place as Pimentel looks to drive 
up guest numbers from the UK and Ireland, the brand’s second‑largest source market behind the US and Canada.

Pimentel expects UK passengers next year to account for a quarter of guests – a figure he aims to increase to one-third in two years’ time. The key to this, he says, is attracting more first-time cruisers, who accounted for 22% of passengers this year.

“Our growth has been quite explosive,” he adds. “We have 19% net yield growth – not many people can say they have that figure.

“If we look back to the beginning of my time [in 2009] 
we had 5,000 passengers from 
the UK; in 2014 we expect that 
to be 10,000. On two ships that hold less than 700 each, that’s pretty amazing.”

The upward trend continues. Pimentel says UK bookings for 2014 are up 41% over the past year and puts the brand’s success down to UK guests’ eagerness to explore destinations.

Pimentel says one of Twynam’s main tasks will be to drive the number of high-value customers booking Azamara sailings.

“I have no desire to be the market leader in low prices,” he stresses.

“It’s about getting to an even broader base of clients from other cruise lines and tour operators, and Richard has a background in that through Kuoni.

“He has seen it before and can use that experience to his advantage. He knows agents.

“We need to be even more focused on the trade. We already are very trade dependent and we want to be. It is easier to reach out to customers through the trade than directly. We are small so we don’t have the scope to go straight to customers.”

Pimentel: I want to build a fleet

Azamara Club Cruises is likely to add capacity in the future.

Larry Pimentel said that while no ship orders had been placed, his plan was to expand the line from its existing two ships, Azamara Quest and Azamara Journey.

“I didn’t join Azamara for just two ships; I want to build a fleet,” he said.

“There is always a desire for any chief executive to grow their business and to do so at the right time for the company – this is a view I take. We are proving the brand has return on investment capital and that a product like this can be profitable. That gives the board movement to grow the brand. There is no official word and I haven’t been given a green light yet, but I wouldn’t bet against new ships.”

Call centre move will not hinder drive for quality

The plan for Azamara Club Cruises, Celebrity Cruises and Royal Caribbean International to operate as individual businesses will allow Azamara to become even more focused on the UK, said Pimentel.

“The move will allow us as Azamara – through our team – to focus on the product.

“I’m very encouraged because for us it means a dedicated marketing team and sales people. This team will help to present us more in the marketplace.”

Despite some trade criticism of the company’s plan to base its guest and trade service call centres in Guatemala, Pimentel insisted he was optimistic.

He stressed that moving call centres overseas was always controversial, whatever the industry, and that the business was investing heavily in training its new staff.

“Some call‑centre moves haven’t been executed well.

“If we are going in a direction that doesn’t work, we change it – it’s as simple as that. This has been very well thought out and I’m positive about it.

“I have listened in to some of the test calls and the quality is quite superb.”

Azamara to pay Virtuoso agents more for high-value cruisers

Azamara Club Cruises and travel agency network Virtuoso have agreed to a new compensation model, in which Azamara will pay Virtuoso agents incremental commissions when they book high-value customers.

The new commission structure takes into account factors such as stateroom category booked, how far in advance the booking occurs and length of voyage.

“Virtuoso clients tend to book more than 300 days in advance, they book in higher categories, spend more on board and are brand loyal. We want to aptly reward advisers who are bringing us these valuable guests who can be converted into repeat cruisers,” Azamara CEO Larry Pimentel said in a statement.

Virtuoso CEO Matthew Upchurch said the new commission structure “recognizes the value of agencies and advisers who book higher-value clients.”