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Lap of Luxury: High-End Brand Survival


10 May 2011


Yachts of Seabourn proves that high-end brands can thrive in a tough economic climate. Leaving the line with an impressive success rate - with full sailings, record bookings and unparalleled growth, outgoing president and CEO Pamela Conover tells Phin Foster why great service and a taste of luxury will always be in demand.


Through winter 2010-11, Yachts of Seabourn embarked on yet another grand voyage, only this time the itinerary was across country and one way. In a move designed to harness efficiencies through sharing technology and support services with fellow member of the Carnival stable Holland America Line, the luxury operator's headquarters are migrating from Miami to Seattle, US. Carnival chairman and CEO Micky Arison estimates annual savings for 2012 of approximately $20m-$25m.

Both brands will continue to operate as separate entities and, other than climate, staff should not notice too many differences once the new office is up and running. The one major change, however, will be the individual who captains the ship: once this journey reaches its final destination at the end of March, so too will Pamela Conover's successful tenure as president and CEO.

Seabourn sails against the tide

The company that Conover hands over to her successor Richard Meadows is almost unrecognisable to the niche operator she inherited in November 2006. When Quest debuts on 20 June 2011, following the launches of sister ships Odyssey and Soujourn, Seabourn will have more than trebled its capacity in just three years.

This would be a remarkable story of growth in any operating environment, but to successfully develop a luxury brand on such a scale during one of the greatest financial downturns makes it extraordinary. Even at the height of the economic crisis two years ago, all sailings were fully booked, and November 2010 was Seabourn's best booking month ever, with a 166% year-on-year increase.

But tastes have not been completely unaffected; luxury operators may still offer the same high-end product as before, but the overall package is now being articulated in alternative ways.

"Seabourn has estimated annual savings for 2012 of
$20m-$25m."

"The message has to be slightly different," Conover says. "Previously, people might have been moved by material things, now they're looking towards the more timeless elements of creating memories and sharing experiences. Guests need to feel it's still okay to take a vacation; that the money is being spent on things that are important rather than frivolous."

Conover recognises the need not to convey oneself as elitist, but emphasises that finding value and enjoying life's luxuries are not mutually exclusive endeavours.

"People still want to travel in a certain way - for example, we haven't seen a reduction in champagne consumption. As a consumer there's never been a better time to enjoy a luxury cruise; the value is now so good. What you're offered is a pretty much all-inclusive product, including caviar and lobster, so it's our role to push that idea of value, and help people see beyond price point."

An element of the luxury experience that is more difficult to articulate through direct marketing is the level of personalised service so fundamental to the overall package.

"That is one of the intangibles," Conover says. "At this end of the market, word of mouth is critical. We are looking to appeal to segments beyond the regular cruise demographic, and that group pays far more attention to what friends say than they ever would to anything we can do in terms of marketing."

Onboard people power

Maintaining an emphasis on refined, intimate service is a challenge for an operator that is increasing capacity at such a pace. The three new 32,000t ships carry up to 450 guests, compared with the 200 boasted on its existing fleet, and cost $250m apiece. 

"We knew that everybody working frontline on the new ships would need to have already served on the existing Seabourn fleet," Conover explains. "We made the ultimate commitment: taking suites out of service. Trainees were then brought onboard to work alongside existing crew, so we could develop a cadre of people with experience of our culture.

"Seabourn's three new 32,000t ships carry up to 450 guests and cost $250m apiece."

"We're very picky about who we hire; people must have a genuine desire to serve."

A younger demographic is coming aboard, a trend Conover believes will be accelerated by the new ships, which suggests Seabourn's service culture will be forced to undergo change. But she disputes this, arguing that luxury service has moved beyond antiquated notions of 'white glove' subservience.

"I'm not saying it's wrong, but there's a huge difference between formal, somewhat structured service and the sort of personalised, anticipatory interaction we look to provide - our crew enters into a dialogue with guests and assess who wants what type of service." 

This longstanding tradition of dialogue was invaluable in designing the new fleet. Guest opinions were canvassed and many suggestions made it to the finished vessels.

"The relationship we enjoy means a lot of feedback, both through officers and management," says Conover. "I host at least one cruise a year and constantly talk with guests, and also run Q&A sessions."

Heart of a successful cruise

The message seems to have confirmed what Conover sees as fundamental in appealing to new and established demographics alike: choice. The new ships each feature 11 decks, two outdoor swimming pools and six whirlpools, water sports, a private diamond showroom, four restaurants and an 11,400ft² spa, the largest on any luxury cruise vessel. Of the 225 ocean view suites, 90% have verandas.

The company has also done away with the traditional reception area, introducing the concierge-driven Seabourn Square.

"Yachts of Seabourn' trades on the promise of its cruises being comparable to the luxury yacht experience."

"It's the heart of the ship," Conover explains. "It was about looking at how we could better create one-to-one interaction. But we also wanted to ensure the new ships had a similar look to the existing fleet. There are elements people know and are comfortable with - the sky bar is where you congregate, the club is great for a pre-dinner drink - and that sense of familiarity needed to remain intact."

However, such an increase in capacity creates a danger that brand qualities might be lost. The self-styled 'Yachts of Seabourn' trades on the promise of its cruises being comparable to the luxury yacht experience.

"Yes, it's a bigger canvas," Conover says. "But, unlike some lines that have sought to go larger, we chose a 450-guest maximum. The economies get better as you increase in size, but that was the limit we could reach while still offering the full Seabourn experience.

"The increase in size strengthens our identity. We are a niche brand and remain so, but the new ships give us slightly more presence and enable more itinerary options."

So will the size of operations ever strip Seabourn of that illustrious niche status?

"Honest answer? I don't know," Conover says. "But we've not hit that point yet."