Shuffling the deck


April 15, 2015

New faces have replaced familiar ones in the C-suites throughout the cruise industry, and nowhere has the change been more evident than at the brand president level. Meanwhile, river cruise companies are developing sophisticated recruiting and training programs to ensure that service standards keep pace with the sector's growth. 

Presidents' range of experience, ideas

By Tom Stieghorst

The top management levels of the cruise industry have gone through such an unprecedented transition in the last two years that for many, it has become hard to tell the players without a program. New faces have replaced familiar ones in the C-suites at companies large and small throughout the industry.

Nowhere has the change been more evident than at the brand president level. Nearly every line that sells primarily in North America has a new face and new talent in that crucial role.

Added all together, the presidents of Carnival Cruise Line, Norwegian Cruise Line and Royal Caribbean International -- lines with roots going back 40 years or more -- can only claim about eight months on the job.

The change is potentially disruptive, said Alex Sharpe, president of the Signature Travel Network consortium of luxury travel agents.  

"Maybe you've been working with someone, and now you have to build a new relationship," Sharpe said.

Still, Sharpe's take on it is a positive one. He pointed out that since the announcements of new leadership at the major public companies, every cruise stock has gone up.

"The knock on this industry is the penetration was low," he said. "I think you need some new people and new ideas."

Christine Duffy
Christine Duffy

Leading the way in bringing fresh perspectives has been Carnival Corp., where neither Carnival Cruise Line President Christine Duffy nor Holland America Line President Orlando Ashford had ever worked for a cruise line before being named to their new jobs.

Duffy, familiar to many as the former president and CEO of CLIA, the industry's trade group, started Feb. 1. Ashford, a surprise choice given his former role as an executive at Mercer, the global consulting firm, began his new role on Dec. 1.

At about the same time, Carnival named a new president of North America for its Cunard Line brand, Rick Meadows, who also serves as president of its Seabourn luxury line.

Michael Bayley
Michael Bayley

Meanwhile, in December, Royal Caribbean Cruises Ltd. (RCCL) named new presidents for its Royal Caribbean International and Celebrity Cruises brands, tapping veterans Michael Bayley and Lisa Lutoff-Perlo, respectively.

The following month, travel agent favorite Andy Stuart was picked as president of Norwegian Cruise Line, and Prestige Cruise Holdings elevated Jason Montague to be president of its Oceania Cruises and Regent Seven Seas Cruises brands.

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Each of the new presidents brings different experience to the job, and each has different ideas about what it entails.

Edie Rodriguez, who was tapped to be president of Crystal Cruises a little over a year ago, said the president of a cruise line has to eventually master every facet of the business.

"If they are truly a hands-on, focused leader, their responsibility from a day-to-day operations standpoint is to be cognizant and aware of every aspect of the organization," Rodriguez said.

Plus, the president's role is to hold everyone accountable for reaching the company's goals, whether that means financial performance, customer satisfaction, safety and security or employee engagement, Rodriguez said.

"I get down to the nitty-gritty when I come in in the morning," she said. "I'm even talking to people in the mail room to find out how things are going. That's my style of management."

Another task unique to the president is to define the brand and make that definition clear to the public, employees, vendors, guests and travel sellers. 

Adam Goldstein
Adam Goldstein

Adam Goldstein, who had 12 years' experience as head of Royal Caribbean International before becoming president of parent company RCCL, said the president is concerned exclusively with the interest of his brand, "which is distinct from the corporation. A brand is a subset of that." The brand, he said, may be bolder or tamer, more exclusive or more egalitarian than the parent corporation.

Jason Montague, 41, said a lot of his job as president of the two Prestige brands "is just to assure that we continue to deliver on the brand promise, for both Oceania and Regent, and then continuing to work with our travel agent partners to continue growing their business, because if they're growing their business, that means we're growing our business at the same time."

Jason Montague
Jason Montague

A good brand president is also able to calm troubled waters. When Meadows was appointed president of Seabourn in 2011, it coincided with Seabourn's relocation to Seattle from Miami and the decision by the previous brand president, Pamela Conover, not to make the move.

"Seabourn is a passionate brand," Meadows said. "Anytime people with that passion go through a change like that, it's quite a process. In three months we moved the entire operation of the company from Miami to Seattle, and that was a lot of work."

On top of the move, Seabourn was taking delivery of a new ship, the Seabourn Quest, three months later.

Meadows said that since moving up to brand president, he has learned to be a better listener, to be more flexible and to rely on his team to make good decisions and keep everyone informed.

Rick Meadows
Rick Meadows

Meadows' appointment as president of Cunard Line North America gives him the unusual role of running two major brands, although in the latter role he reports to Cunard Line CEO David Noyes.

But the 30-year veteran of Carnival said he participates fully in shaping the brand's strategy.

"I'm partnering very deeply with my colleagues in the U.K. on really working toward advancing the product experience, things that actually get so much deeper into product design," he said.

Meadows splits his time on a weekly basis between Seabourn's headquarters in Seattle and Cunard's North American office in Santa Clarita, Calif.

Like many of the new brand presidents, Meadows moved up to a more responsible role because room was created above him. He gave up a role as senior vice president of marketing at Holland America Line when Ashford was hired as president. Ashford, in turn, was recruited when former Holland America President Stein Kruse became president of a newly created Holland America Group at Carnival.

Changing of the guard

Andrew Coggins, a professor of management at Pace University in New York, who teaches courses on cruise travel and tourism, said all the new faces in the industry result from a generational changing of the guard.

In Coggins' view, the founding fathers of the modern cruise industry from the 1960s gave way to a second generation in the 1980s and 1990s. That generation has been in power some 20 years and is now yielding to the current crop of CEOs and brand presidents.

The transition began in June 2013, when longtime Carnival Corp. Chairman Micky Arison stepped down as CEO in favor of board member Arnold Donald.  CEO since 1979, Arison, 65, had learned the business from the ground up as the son of founder Ted Arison, and on his way to the executive suite, the younger Arison had done everything from sales calls to emptying slot machines.

That kind of learning might not be available to many of the industry's next-gen leaders, but Meadows, 52, said he counts Arison as one of his most important mentors. He's far from the only one.

Describing Arison as "an incredible leader," Meadows said, "He has a level of intuition and instinct that is unbelievable, and he's provided a lot of support and mentorship over the years."

Lisa Lutoff-Perlo
Lisa Lutoff-Perlo

Likewise, veteran leaders at RCCL such as Goldstein, Chairman Richard Fain and former Celebrity Cruises President Dan Hanrahan paved the way for Lutoff-Perlo, who became Celebrity president in December, one of a number of women reaching that level in the industry at the same time.

"I've been very close to the brand presidents I've worked with," said Lutoff-Perlo, 56, who has been with Royal since 1986. As a result, she said she feels very well prepared for her new role. "As I come into this job, it feels exciting the way I knew it would. I think it's exactly what I expected."

If Meadows and Lutoff-Perlo represent the end of a spectrum in which new leaders have been with their respective companies for almost their entire careers, Ashford and Duffy represent the other pole: those who bring outside perspective to the role.

"Part of my job is to ask a lot of questions: Why do we do that?" said Ashford, 45. "And most often the answer that comes back makes sense and is the right way to go. But there are those times. ... I was a consultant to a number of different industries around the world, so that's a filter I use as we go [examine] things we do every day."

Duffy, 53, said her background as a trade association president and, before that, as president of St. Louis-based Maritz Travel, an incentive travel specialist, gave her a new perspective on Carnival's issues.

Duffy's tenure at CLIA tested her mettle as the industry was grilled by senators on Capitol Hill and challenged by the press and various critics over its safety and environmental practices.

"It's not just that I was a trade association executive but that I led the cruise industry association during a period of great change," Duffy said.

Orlando Ashford
Orlando Ashford

Both Ashford and Duffy are very aware of the long histories that precede them at their respective companies.

"We're an iconic brand," Duffy said. "My job is to continue that legacy of taking care of our guests."

Added Ashford: "My job is to protect the things that have made us successful for 150 years and create room for the modern twists, the evolution that will prepare us for the next 150 years."

Duffy and Ashford, HAL's first black president, bring ethnic and gender diversity to the brand president's office that hasn't always been evident in the industry.

Dwain Wall, co-president of WorldCruise.cn, an online travel agency based in Beijing, worked for Duffy briefly at CLIA after a long stint as general manager of CruiseOne/Cruises Inc. and said he believes the industry, Carnival in particular, was looking for a way to soften its image and has turned to leaders with good public presentation skills.

Following the backlash after the Carnival Triumph fire in 2013, "they really wanted to try to change the image of the industry," Wall said.

Another new female brand president, Jan Swartz of Princess, said she has been focused on making employees and guests happy and hitting financial goals since she was named to her job in November 2013.

Swartz, 49, had been at Princess for 12 years prior to that, joining after five years at Bain & Co., where she had consulted for Princess on mergers.

"I come to the role with a very strategic view of what are the possibilities for our company," Swartz said.

Like all of the Carnival Corp. brand presidents, she is focused on some of her CEO's oft-stated priorities, such as exceeding guest expectations and collaborating across brands.

Reinventing Norwegian

Perhaps no company has had more revolution in the top management than Norwegian Cruise Line, which has had to structure new roles for executives following the $3.03 billion acquisition of Prestige Cruise Holdings and its two brands, Oceania Cruises and Regent Seven Seas Cruises.

Closing the deal in November set off a cascade of changes that began with a new corporate structure under a parent company, Norwegian Cruise Line Holdings (NCLH).

Next, Prestige President Kunal Kamlani resigned, followed two months later by NCLH CEO Kevin Sheehan.

With former Prestige Chairman and CEO Frank Del Rio stepping up to take Sheehan's place, openings were created for Stuart, 51, and Montague, 41, to step into brand president roles.

Stuart, a 27-year Norwegian Cruise Line veteran with a long history on the sales side of the company, said in an interview after being promoted that he would continue to be more involved in sales than the average brand president.

"The key part of this role really is driving demand for the brand," Stuart said. "I'm going to be very, very involved with travel partners."

For their part, travel agents are thrilled to have Stuart in such a high-profile role because, said Signature's Sharpe, they credit him with the line's "Partners First" initiative and its support for the agent distribution channel.

"I keep getting members calling me," Sharpe said. "They're so happy for him and for us."

Only time will tell whether all the change at the top is ultimately good for the cruise industry and travel retailers. But like Sharpe, Wall is optimistic that the positive energy of new blood will outweigh the loss of experience and institutional memory at some lines.

"It's easy to have tunnel vision and automatically assume the way to go is the way it's always been," Wall said.

Coggins, too, said that on balance the changes are positive.

"If you bring someone in from another industry, they come with fresh ideas," Coggins said. "They bring the perspective that will help attract the first-time cruiser."

Viking crew members gather around a table.
Viking crew members gather around a table.

River cruising's boom applies to staffing, too

By Michelle Baran

The incredible growth of the river cruise industry is impressive enough just in terms of the sheer amount of hardware being built and launched each year. But there is another aspect to the river cruise boom that is mostly overlooked: the people, or, more specifically, the people who are staffing the rapidly growing number of river cruise ships.

When it comes to the ships themselves, building them is arguably a process that can be somewhat automated: create a design framework, execute and repeat, with some tweaks here and there, of course.

But when it comes to people, there are myriad variables that could result in inconsistencies. And with the river cruise product rooted so heavily in service and in developing personal connections between the crew and the passengers due to the smaller size of the vessels, river cruise companies are having to develop sophisticated recruiting and training programs to ensure that service standards keep pace with the growth.

"If you want to look at where innovation is really occurring in river cruising, it is: How do you create a hospitality team of 50-odd folks that makes your trip abroad unforgettable," said Richard Marnell, senior vice president of marketing at Viking Cruises. 

A Viking crew member on a ship’s sun deck.
A Viking crew member on a ship’s sun deck.

Because Viking is churning out so many new vessels each year, it also has to invest a lot of time and money -- millions of dollars, according to Marnell -- to properly staff those vessels. In 2014, Viking hired 1,400 employees for its river cruise business. In 2015, the company hired 1,600 employees, including additions to both river and ocean teams.

That's hundreds of new hires each year just for one company. So where are river cruise lines finding all these recruits? Traditionally, many of them hail from Eastern Europe. Anyone who has been on several river cruises will start to recognize certain origin countries popping up regularly -- places like Romania, Hungary, Bulgaria, Poland and the Czech Republic. It's not uncommon to have staff from Western Europe working on river cruise vessels, as well, especially as cruise directors and hotel managers (though plenty of Western Europeans can also be found throughout the vessels). And increasingly there are more crew members of Asian origin on river cruise vessels, including from countries such as Indonesia and the Philippines. Marnell noted that in total, Viking has some 50 nationalities represented onboard its vessels.

As for experience, river cruise executives say that crew members often have previously worked on ocean liners or in hotels or restaurants. Of course, more technical positions, such as on the nautical teams, require relevant educational and licensing credentials as well as experience. But there are also plenty of onboard staff who are trained from the ground up.

For the 2015 sailing season, Viking held two larger training sessions for its employees, with approximately 900 employees participating in a session held in Cologne, Germany, and another 200 participating in a session held in Venice. These sessions, according to Marnell, are as much about training people for their respective tasks as they are about grooming good managers.

"The management on the ship is trained not only in their own tasks but even more so in leadership and in training, because they are key in developing the needed skills in the people that report to them," Marnell said.

But in the end, he noted, successful staffing really comes down to one main thing.

"Overall, our philosophy is that our best employees are hired based on the right attitude," he said. "With an adequate educational background, we can train a new team member with all he or she needs to know. But the attitude has to be there."

Photo captions for large images, from top: Crystal Cruises President Edie Rodriguez walks with Thomas Mazloum, senior vice president of operations, on the promenade deck of one of Crystal's ships; Maryland Transportation Secretary Pete Rahn and Carnival Cruise Line President Christine Duffy; Holland America Line President Orlando Ashford speaks at Cruise Shipping Miami; Princess Cruises President Jan Swartz with Princess’ float for the Rose Parade in Pasadena, Calif.; and Norwegian Cruise Line President Andy Stuart on the ropes course of one of Norwegian’s new-generation ships.