Former Commodore head to agents: Don't abandon small players

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HOLLYWOOD, Fla. -- Travel agents who turn away from niche cruise lines because of the bankruptcies last year of Premier and Commodore are harming themselves and their clients, according to Ron Kurtz, former president of Commodore Holdings.

"When there is reduced competition and the public loses choice, the channels of distribution are at risk," said Kurtz, who was president and chief marketing officer at Commodore Cruise Line and Crown Cruise Line, both of which were operated by Commodore Holdings.

After Commodore filed for Chapter 11 in the last days of December, following the demise of Premier in September, many agents said they believed that niche cruise lines with older ships cannot compete with large lines and their new megaliners.

"When agents talk about the permanent demise of the smaller carriers, they seem to be showing no appreciation for market and product segmentation, and that's a danger to the industry at both the retail and supplier levels," Kurtz said.

"That attitude will discourage innovation and product variation, which I don't think is good for the consumer."

Pointing to the airline industry, he said: "When you have consolidation and only a few players, agents get hurt by a reduction in commissions, and consumers get hurt by a loss of service. I'd hate to see an extrapolation of those trends to the cruise industry."

Kurtz, who left Commodore Holdings two weeks before its Dec. 28 bankruptcy, argued that Commodore and Premier did not fail because they were smaller lines and operated older ships.

He contended that both companies failed because they made expansionary new investments in a worsening economic environment.

"They had a lot of debt compared to equity," he argued, "and they took on more debt by starting up new ventures, which they weren't in a position to take."

Admitting that small companies may face special problems, he added: "I don't say it isn't difficult for small players, but their objective is to have a product and a market segmentation that big lines aren't serving adequately."

Kurtz said that Commodore and Crown were operating with relatively high load factors and attracting satisfied customers.

"We were filling our ships, and, given market conditions, were getting a pretty good yield."

He continued, "A smaller, older ship that is well maintained can offer an attractive difference to certain segments of the market."

Further defending the role of niche lines, he went on: "We recognize the big numbers [of passengers] are for the big new ships; that's where the public wants to go.

"But many passengers, including mature travelers, don't necessarily find that exciting. Many find it intimidating to get around those ships."

Kurtz, who was president at Sea Goddess Cruises and later a top executive with Windstar Sail Cruises, was a consultant to Oslo, Norway-based ResidenSea before joining the Crown and Commodore lines.

He now heads his own consulting firm, Management Resource Group, in Aventura, Fla.

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