Crossing the luxury line

Cruise line categories

Contemporary
Carnival Cruise Lines
Royal Caribbean International
Norwegian Cruise Line

Premium
Celebrity Cruises
Holland America Line
Princess Cruises

Upper Premium
Oceania Cruises

Upmarket
Azamara Club Cruises

Luxury
Cunard
Paul Gauguin
Regent Seven Seas Cruises
SeaDream Yacht Club
Windstar Cruises

Ultraluxury
Crystal Cruises
Seabourn
Silversea Cruises

Source: CLIA's consumer site at www.cruising.org. Some CLIA member lines do not indicate a service level or category on their CLIA page, including Disney Cruise Line, Costa Cruises, MSC Cruises and American Cruise Lines. 

Cruise lines of all stripes have diversified their accommodations, and as a result, the demarcation line that traditionally set the boundary for what constitutes "luxury" has become increasingly blurred.

Cruise clients can book a 10- or 12-day itinerary in a premium-ship suite with butler service, for example, for about the same or less cost than a seven-day voyage on a luxury line.

Some agents argue that the difference between products no longer is cut, dried and stacked. They say it has become difficult, for consumers in particular, to determine where premium, upper premium, upmarket and luxury each begin and end.

Celebrity Cruises is a good example.

The nine-ship premium line, which later this year will christen the Celebrity Reflection, recently began using "New Modern Luxury" as its marketing theme.

Enhancements this year to its existing Suite Life experience added amenities such as Egyptian cotton bedding, luxury bath products, a bottle of sparkling wine and reserved seats for theater productions.

These perks joined many others that already were in place, such as the services of European-trained butlers, priority boarding on tenders, free dinners at specialty restaurants and fresh flowers in the suite.

The line's president, Dan Hanrahan, said the lure of these amenities has been successful in attracting passengers who previously sailed on luxury cruise lines.

"Twenty percent of our guests have sailed with [one or more] luxury lines," Hanrahan said. "We've given luxury cruisers a question to ask themselves: 'What am I really looking for in a cruise?' And a lot of them come to us and sail with Celebrity."

Hanrahan, who also said he believes the line between premium and luxury is blurring, noted that the number of passengers choosing Celebrity over a luxury line has increased by about 30% since the entry of the line's Solstice-class vessels in 2008.

"Even with Millennium class and Century class, we were getting guests who came from luxury lines," he said.

The Reflection, part of the Solstice class, will feature nearly a full deck of AquaClass suites. Aqua accommodations debuted with the Solstice vessels.

But is the percentage of Celebrity's passengers who were lured away from the likes of Crystal or Seabourn a sustainable commodity? Are they returning to Celebrity for a second or third cruise?

Yes, Hanrahan said. "The repeat numbers of those who had sailed with luxury lines is consistently in the 10% to 22% ballpark," he said. "We're getting those repeats. In the luxury lines, there are not that many ships, not that many cabins."

Breaking the mold

Celebrity is just one of several contemporary and premium cruise lines that go to great lengths to attract the luxury crowd.

MSC Cruises now has three ships offering its MSC Yacht Club, a "ship within a ship" private-access area. Passengers who book the club accommodations never have to leave their sanctuary, since it has its own recreational and dining venues.

But as Rick Sasso, president of MSC Cruises USA, often points out: "Our guests always have a choice whether to go 'downtown' or not," meaning to the nonexclusive areas of the vessels.

Giving passengers that choice is a relatively new concept. At Travel Weekly's 2011 CruiseWorld conference in Fort Lauderdale, Sasso explained how the industry no longer is as formulaic as it once was.

"It used to be that younger guests went here, the older ones went there, and we had income guidelines telling us where consumers [would book]," he told attendees. "But the rubber hits the road on the combination of price tag, food and spa offerings, the destinations and level of service and pampering. We changed the industry on purpose."

Norwegian Cruise Line, a contemporary product, is another example. Its Norwegian Star was the first to offer Garden Villas, the 6,000-square-foot-plus luxury suites.

The line now has five ships that offer the Haven, an exclusive area of suite and villa accommodations with butler service, private pools and lounge areas and other perks, such as preferred seating in the theater and priority spa access.

What's good for the goose

These changes, which have led to a not-so-solid demarcation line, are good for the retail trade because they point up the value of an agent's knowledge and recommendation, according to Vicky Garcia, executive vice president of Cruise Planners.

"It makes our role more important," she said, but she added that the blurred line means it's more of a challenge to qualify clients.

"We train for this a lot," Garcia said. "We ask our advisers to listen very carefully before [they determine if] someone belongs on a luxury ship. We'll ask what they normally do on vacation, what type of hotels they book, do they fly in first, what credit cards do they use, are they a country club member? And from the answers we begin to develop a profile that shows us what they want their experience to be.

"It isn't as simple as asking whether they want a suite or not; a website can ask that question. This is about getting to know your client. If they use an American Express card and they have a million points on it, you know they spend a lot of money."

Cruise products have diversified so much that "you can't put them each into their own little boxes anymore," Garcia said.

Using herself and her friends as an example, Garcia said that while she enjoys a luxury line experience, "I don't necessarily want to go on a luxury product. I want to be with people like myself."

She likened the choice to the diversity in the hotel industry.

"People might stay at a Westin vs. a Ritz-Carlton, but they'll get the Westin suite," she said. "I see it among my friends and colleagues who are lawyers and other professionals. They don't always see themselves on a luxury line, but they'll always book luxurious accommodations."

She described this kind of client as people who don't need "bragging rights."

On the other hand, Garcia noted, there are plenty of consumers who want to be "a top dog. They want to be seen walking into a suite and being treated special. On a luxury line, everyone is getting the luxury product, so those types of people, who want to stand out, will be attracted to products like Celebrity."

Similarly, she said, "there are lots of people who book the best suites on Carnival."

Stepping up

Ross Spalding, president of Princeton, N.J.-based Crown Cruise Vacations, said he believes there exists a crossover of clients between premium and luxury, "but it's not the norm."

From his perspective, he said, it appears clients mostly are stepping up their accommodation choices rather than stepping down.

"I can tell you I've never had anyone get on a luxury ship and then have them say, 'That was wrong ... I would've rather been on Holland America.'"

His agency also operates a luxury unit, called Crown Cruise Collection, which sells Regent Seven Seas Cruises, Oceania Cruises, Azamara Club Cruises, Crystal Cruises, Seabourn and Silversea Cruises.

"We're seeing our largest increase this year in bookings of both upper-premium suites and luxury," Spalding said.

"The one big difference why people are either sticking with luxury or stepping up to luxury is the size of the ship," he said. "When my clients come home, they're not telling me that they liked the upgraded shampoos or the concierge lounges. It's service, itinerary and quality of food."

He added that although "the pricing is closer," the luxury product still delivers a considerably better experience, with food probably the top consideration.

Luxury clients, he said, typically want to be with "like-minded passengers" of similar socioeconomic status. "On Celebrity, they can stay in the Owner's Suite for $1,000 a day, but others are staying elsewhere on the ship for $100 a day," Spalding said. "You don't see that on a Regent ship. And the luxury lines are winning the itinerary battle, too.

"Of course, [some] lines are going to say that they're taking share from luxury, but that's an oddity, because there are so many different types of luxury clients. Everyone considers luxury a different way: the cabin, the food, the all-inclusiveness."

Sister brands Regent Seven Seas Cruises and Oceania Cruises are so close that it's difficult to differentiate the two other than by noting the inclusive nature of Regent, Spalding said.

The client qualification process, he said, starts with a conversation about ship size and the itinerary.

"If someone says, 'We're in bed by 10, but we might go hear some music before,' well, we'll start with the luxuries and see where it goes," he said.

Family ties

While lines such as Celebrity might be able to lure away some luxury guests, Spalding said he believes that "ultimately, the people who fill the luxury ships are going to keep filling the luxury ships. We deal with a lot of luxury clients, and unless it's a multigenerational, family-type cruise, they are not on anything but the luxury lines they like to travel on."

It's precisely those multigenerational groups that are prime targets for Royal Caribbean International, said Vicki Freed, the line's senior vice president of sales, trade support and services.

"We do get luxury bookers, and many times that client is the parent or grandparent who is taking the whole family along," Freed said. "Those parents, who might usually travel on upscale lines, know that, for this vacation, it makes more sense for the whole group to travel on one of our ships."

Freed noted that the line offers an abundance of family suites.

Royal also attracts luxury clients "who simply are enticed by our choices" and "who are really happy being in that special category," Freed said. "We are a contemporary/premium line. There are many guests who are comfortable in this environment. Yes, they have the money to do luxury, but they'll say, 'I fit better in this kind of place.'"

Freed compared it to vacationing in Las Vegas: "Do you want to stay in a Bellagio suite or at the Four Seasons and have a boutique experience? They'll cost about the same, but if you want to be around the excitement, the shopping and amenities, you'd feel more comfortable at the Bellagio. On our ships there are more things to do, so for some we are a better fit than a 200-[cabin] all-suite experience."

Big fish, small pond

According to luxury cruise agent Josh Friedman, who owns Josh Friedman Luxury Travel, a Virtuoso agency in San Francisco associated with Casto Travel, it all comes down to the idea that "certain people like to be a big fish in a small pond, while others like to blend with their own kind."

For the most part, Friedman said, he hasn't seen much blurring of the luxury line.

"The ultrarich will not book a Celebrity suite," he said, adding, "They don't need to make a statement. They like Silversea."

Friedman said that his luxury clients don't even ask about suite accommodations on premium ships.

But he agreed that the line can become blurred or nonexistent when retailers don't know the products.

"I had a customer in Montana," Friedman recalled. "He found me on the Internet a few years ago and wanted to book a Scandinavia vacation. [Afterward] I sent out a mailer to him and he called and said, 'What's Silversea?' He had gone to a local agency that didn't even know about luxury lines, so they offered him a suite on Holland America Line or Celebrity. I don't think it would ever occur to that agency to sell Seabourn, for example."

Celebrity's Hanrahan said that in the end, it doesn't matter so much to him where his customers come from, even though the line is aggressively reaching out to attract luxury cruisers.

"If a cruiser decides to come to us from a premium line, I'll take them," he said. "I think that what's really important is that I see there is a differentiation between the brands. My big fear when I joined the industry 13 years ago was that everyone would copy one another. But they are all doing a good job marketing themselves differently. The most important thing is to attract new customers to the industry overall."

CORRECTION: An earlier version of this story gave an incorrect affiliation for Josh Friedman Luxury Travel. That firm, a Virtuoso agency in San Francisco, is an independent contractor affiliated with Casto Travel.