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New Management Style Helped Costa Turnaround

When Howard Fine joined Costa Cruises in 1983, as President and Chief Executive Officer, the line was poorly rated, operated its ships under several flags, and was not easily identified by consumers. Since then, however, Costa has worked to distinguish itself under the “Cruising Italian Style” theme, and is achieving full capacity on most of its sailings, according to Fine.

Fine said that he was able to help turn Costa around without a turnover in management, and he attributes his success to his participatory management style.

“I am involved in all levels of operations, and believe that if you motivate people, the bottom line takes care of itself,” Fine said. “I think it is important to look at problems from everyone’s point of view, and I let my executives run their own departments. I also travel aboard our ships at least once a month and talk to the entire staff – from the captain to the kitchen crew. I listen to any suggestion they may have about how we can better accommodate the passengers, and I make each one feel as if he is the most important person in the company – and in a sense, that is very true because everything a crew member does affects the Costa reputation,” Fine added, noting that his onboard crews now earn “A” ratings from 99% of the line’s passengers.

Fine also believes that it is important to listen to the passengers – a contention he has adhered to from his first day at Costa.

“I knew that in order to clearly distinguish Costa in the market, we had to register our ships under one flag, but before we did, I wanted to find out what impressions the consumers had about the various nationalities,” Fine said. “We did extensive research, and after holding several focus groups, discovered that all consumers, cruisers and non-cruisers, felt that an Italian staff would offer the best cruise experience. We also found out that the things they thought would be best about an Italian cruise, the food, ambiance and service, also were our strong points, and we began to emphasize them in our advertising.”

Fine sails frequently on the Costa ships, and makes an effort to interact with all of the passengers. According to him, the passengers have been responsible for many of Costa’s marketing innovations, and their wishes are particularly represented in the strategies for the line’s new ship, CostaRiviera, scheduled to begin operations on December 14, 1985.

CostaRiviera will sail seven-day cruises in the Caribbean year-round, with calls in St. Thomas, Nassau and St. Croix – islands the line discovered were the three most popular among vacationers.

In order to differentiate itself in an already crowded market, Costa is capitalizing on its Italian identity by offering passengers a “Riviera” experience at sea.

“We found that the Riviera theme was more appealing to the consumer than a Caribbean one,” Fine said, noting that CostaRiviera features decks such as the “Amalfi, Riviera, and Portofino,” and rooms that the line has named “The Grand Prix Bar,” “Monte Carlo Casino” and “La Scala Showroom.” There also is the “Galleria Via Venato” that features a Gucci Shop, Italian leathergoods boutique, and pizzeria, among other shops. The new ship also has a dining room with a dance floor and an outside exercise spa – amenities customers have requested in the past.

“These may not seem significant, but the inexpensive ideas often make more of a difference than the million dollar ones,” Fine said. The line also is featuring impromptu entertainment by comedians, jesters and dancers all day long because it discovered that these unexpected attractions were among the things passengers enjoyed most.

According to Fine, Costa needs 10% of the Caribbean market to fill its ship, and already is “way ahead” of its original projections. Noting that three sailings sold out before the line ran its first trade ad, Fine said that “more ships like the CostaRiviera are in Costa’s future.”

As for additional future plans, Fine said that Costa will announce a new marketing program targeted to the business segment in the near future, but would not elaborate further. He also said that the line is in the process of developing the Costa International Hotel Resort Chain, and a line of Costa International Cruise­ wear that will be distributed to department stores throughout the country.

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