Small Ships Hit the Big Time

Hebridean International Cruises has been setting the benchmark for luxury cruising since 1989. Its two small, five-star luxury vessels, Hebridean Spirit and Hebridean Princess, provide the highest standards of luxury cruise-ship accommodation with outstanding service, fine cuisine, spacious cabins and some of the most elegant public rooms afloat.

Spirit and Princess are small vessels, accommodating up to 96 and 49 guests, respectively. With their low-key entertainment, the emphasis is on relaxation and informality, a far cry from the latest generation of floating hotels with their spangled floorshows and casinos.

Much of the media focus on the world’s cruise industry has been centred on the current drive to build large megaships to meet the rising demand for cruising in this growing and price-sensitive market. In pursuing this strategy, it is the three major companies of Carnival, Royal Caribbean and Star that will undoubtedly secure the lion’s share of the first-time cruiser sector and reap the economic benefits of scale.

However, for Hebridean International Cruises, which operates in the small-ship, luxury sector of the market, bigger is not better. The forecast increase in the number of first-time cruisers is also good news for the small-ship cruise lines. There will always be a percentage of this new audience who, as they become more experienced cruise voyagers, will eventually migrate upwards to the ultra-luxury cruises that Hebridean offers.

The ultra-luxury market attracts the most repeat cruisers, with the niche-market categories following a close second. As Hebridean straddles both sectors, its data shows that the majority of its bookings come from repeat business.

While this is a wonderful endorsement of its cruises and is a clear measure of its success, having a high percentage of returning cruisers means that Hebridean must constantly strive to introduce new and more innovative itineraries and destinations to keep its cruise programme fresh. This means listening carefully to customers to ensure that the high standards that have ensured their loyalty are being maintained. However, the repeat business success of the past is no reason for companies like Hebridean to be complacent.

CONSOLIDATION VS EXCLUSIVITY

Although Hebridean believes that none of its competitors offer a genuine small-ship alternative, it is probable that there will be consolidation across the brands in this sector to offset the associated high fixed operating costs. Hebridean’s prediction for this scenario would be a homogenisation of small-ship cruising across these brands, a positioning that could not be further removed from the experience Hebridean offers to its guests.

The cruise industry in general is extremely price oriented and has to constantly strive to keep its cruise prices low, and thus it has a concomitant need to fully exploit economies of scale. Fortunately, Hebridean has found that the customers of the ultra-luxury cruise market continue to show a willingness to pay a premium for the small-ship cruising experience.

Hebridean’s vessels are decorated to the highest standards with elegant furnishings and all the amenities that a luxury cruise passenger could want. This, and the all-inclusive tariff that it operates one that encompasses every cost on board and ashore – justify the price premium. Yet these are only two factors that makes ultra-luxury cruising an appealing prospect for the discerning customer.

In the cruising market, small has come to mean exclusive, and not just on board: the major difficulty facing the operators of big ships when, for example, arranging shore visits for large parties is that many small but interesting and picturesque destinations are excluded because they cannot cope with large numbers of visitors.

Crowded shore visits adversely affect the experience for the individual visitor and, equally important, for the host destination. So for Hebridean, maintaining the intimate on-board atmosphere and carrying it over to the private shore visits offered to small party numbers is of paramount importance.

FLEXIBILITY FOR CHANGE

The flexibility referred to earlier is also relevant here: what Hebridean guests want has changed over the years, and the company has not been slow to recognise these changes and to incorporate them into its programme. For example, today’s luxury cruise guests are more active and well travelled than they used to be and, as Hebridean has found, they are more curious about the cultures of the regions they visit.

This is why Hebridean has succeeded in incorporating these changes into its itinerary planning without compromising the relaxed, sociable and entertaining atmosphere on board, which is one of the defining characteristics of life on a small ship, and one that people find so attractive.

On board larger ships, the sheer numbers can encourage the kind of social anonymity that may appeal to the group or family travelling together, whereas on a small ship guests usually sail as couples or alone, and do so safe in the knowledge that they will have the opportunity to get to know their travelling companions, many of whom will have common interests and a similar approach to travel and leisure.

PERSONAL TOUCH

On a small ship, good service often becomes a personal service. Hebridean cruises offer a guest-to-crew ratio of almost one to one, and its long-serving, intuitive crew members are able to build up a rapport with small numbers of guests, making them feel welcome, pampered and at ease. Skill, attention to the smallest details and awareness of individual preferences are the difference between an efficient service and a personal service.

Personal service and an environment of individuality and character add to the cruising experience, and currently this aspect of life on board is probably confined to the smaller cruise ships.

REAPING REWARDS

On the whole, the future for smaller ships looks good: there was a 4% increase in the UK cruise market in 2005, with forecasted growth of a further 17% for 2006. The European market is also growing, although less quickly, but when the vast and ever-increasing US market is taken into account, the latent potential for the global cruise industry is enormous. Moreover, an increased US interest in Mediterranean cruises bodes well for those businesses active in this area.

Furthermore, the dominance of the over 50s age group in the UK population and the strength of the grey pound are set to continue, and a company that really understands this group, their preferences and their needs, will reap the rewards in the coming years. The luxury small ship sector is well placed to do just that.

In the wider cruise market at the moment, there are no new builds being reported by any of the major cruise companies that have less than 2,000 berths, and so it may be some time before demand in the popular sector can safely be said to outstrip supply. However, this excess of supply over demand is evidently not the case in the small-ship market.

These ultra-luxury cruise operators are well positioned to take advantage of a strong market; they have a far wider repertoire of destinations to offer and limited available capacity for their increasing number of devotees.

The outlook for luxury small-ship cruising is a very healthy one. It occupies the smallest sector of a large and growing industry that now offers something for everyone. Hebridean is happy to report a steady growth in new customers in 2006 to build on its already excellent customer retention. This, coupled with a clear vision of where it is going, augurs well for a bright future.