Travel Agent - November 12, 2007 - (Page 62)

CRUISES A New Sister on the Horizon? Apollo Management holds a Oceania’s Insignia Oceania Turning Five Line’s sales and fleet are growing JUST SHY OF ITS FIFTH BIRTHDAY, OCEANIA CRUISES IS ON TOP OF THE WORLD. Launched with a mere $14 million in capital in early 2003, the premium line was sold to Apollo Management earlier this year for $850 million. Three 684-passenger ships ply the world’s oceans, and two 1,260-passenger “Oceania class” vessels are set for delivery in 2010 and 2011. “Apollo has been nothing but fantastic, supportive and helpful, especially with the negotiations for financing of the new ships,” says Frank Del Rio, the line’s chairman, CEO and co-founder, who says Apollo is definitely letting him run the show. “Nothing has changed in the day-to-day operations, and business is stellar.” The line has already sold 77 percent of its 2008 inventory, compared with 64 percent of its 2007 inventory sold at this time last year. Yields for 2008 are up 7.5 percent. For 2009, the line has sold 26.4 percent of its space released to date, compared with 17.5 percent for 2008 at this time last year. Yields for 2009 are up 10.25 percent. “We’re always sailing full, so I can’t wait to get my hands on the new ships,” says Del Rio, who says only about 50 cabins for 2007 remain unsold. 62 | TravelAgent November 12, 2007 BY SUSAN J. YOUNG Deeply embroiled in the design process, Del Rio says the new ships will be fast, so they can stay in port longer. That’s important to the line’s destination-focused clientele. On a 14-day European itinerary, Oceania typically spends two days at sea; that will likely shrink to one day. The design of entries and exits will allow fast disembarkation. While design features remain under wraps, 98 percent of cabins will be outside, and 95 percent will have private balconies. Look for more connecting cabins, larger bathrooms and six open-seating restaurants. Del Rio revealed expansion plans exclusively to Travel Agent. “I imagine that after we take delivery of our next two vessels, you will see us in Alaska, you’ll see us in northern Europe, you’ll see us having a ship based on the West Coast of the U.S., and you’ll see us having a bigger presence in the Pacific Rim countries,” he says. This November, the line will spend $1 million to update all bathrooms in Nautica’s 52 penthouse-level cabins with marble and granite. Insignia will receive that upgrade in March 2008, and Regatta in April 2009. All accommodations will receive flat-screen LCD or plasma TVs. majority ownership in Oceania and owns 50 percent of NCL. But “they [Apollo] have said they’re not done acquiring others,” says Del Rio. “There is a possibility, depending on what brands get acquired, of additional operational synergies,” he says, citing Carnival Corp.’s model of operating independent brands but cultivating joint purchasing arrangements to cut expenses. Other credible sources say Apollo is definitely shopping for a luxury brand and has been in discussions with Regent Seven Seas. Apollo’s financial clout also could help Regent—as it did Oceania—realize its dream of more new ships. One expert we talked to off-the-record suggests that if a deal could be reached with Regent, that luxury brand would most likely be a sister brand to Oceania (as NCL is), rather than part of the Oceania operation. At press time, no deal had been announced. Stay tuned. About 3,800 agents book at least one Oceania Cruise annually. The line’s focus on two-for-one pricing and free air will continue. “Since we’ve started in ’03, our yields have doubled,” says Del Rio. “If we discontinued free air, our yields would be even higher, but the value proposition that our guests and travel agent partners have learned to love…would be diminished.” Right now, Del Rio says, Oceania is “analyzing” the air add-on situation; it currently pays 5 percent. Other lines have discontinued air add-on commissions. Itinerary deployment, Tranquility beds, fine dining and overnights in port remain big brand draws. “Smart travel agents and experienced consumers know the difference between the original brand and the impostors. We believe innovation has been the key to our success,” he says. I CONNECTING YOU For more updates on the cruise industry, visit www. travelagentcentral.com/cruise http://www.travelagentcentral.com/cruise http://www.travelagentcentral.com/cruise

Table of Contents Feed for the Digital Edition of Travel Agent - November 12, 2007

Travel Agent - November 12, 2007 Online Now Contents From the Editor From the Publisher Contributors Europe: Berlin Has a Vibrant Arts Scene Central & South America: Iberostar Grand Amazon: Adventure, but with Upscale Cruise Comforts Culinary Tours in Argentina and Peru Belize Eco-Lodge Packages Pacific/Asia: Bali Awaits Discovery by U.S. Tourists Las Vegas: Three Days in Vegas for Baby Boomers Caribbean & Bahamas: CTO’s Chairman Sees Growth in the Market Dominica’s New Tourism Director Discusses Challenges and Opportunities for His Island St. Vincent and the Grenadines: Where Less is More St. Maarten as a Destination for Foodies Tours: Sunshine and Disney are Just Two of Florida’s Options Cruises: Theme Cruises Generate Demand and Revenue Oceania’s Sales and Fleet are Growing Cruise Deals Cover Story: The New Wave Supplier Profile: Viking River Cruises Launches Land-Only Tour Operation Air Lift: Sabre Takes UpSell to the Skies A Tough Season Ahead: Rising Rates and Demand Give Hotels Edge in Price Negotiating Agenda: Fam Trips, Deals & Incentives, Calendar Caribbean Tourism Conference Cruise and Hotel News Trends In U.S. Travel to France Disneyland Upgrade Travel Week In the Spotlight Classified Marketplace Editorial Index Advertising Index Trendwatch

Travel Agent - November 12, 2007

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