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.

“The ultra-luxury market attracts the most repeat cruisers, with the niche-market categories following a close second.”

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 Sorry, there are no polls available at the moment.

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.

“There was a 4% increase in the UK cruise market in 2005, with forecasted growth of a further 17% for 2006.”

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.