While many industry analysts are forecasting that small cruise lines will be unable to successfully ride the wave of increased competition, Commodore Cruise Line and Dolphin Cruise Line are reporting that they will finish 1986 with revenue load factors in the high 90’s, and that the outlook for their one-ship operations in 1987 is even brighter. In addition, both expect to announce plans for fleet expansion in the coming year.
Low price structures and the emphasis on a “smaller is friendlier” theme are the keys to staying afloat in a sea of major cruise lines, according to executives from both of these lines.
New Ship For Commodore
Expansion – of its fleet and into new markets – is the key word for 1987 at Commodore, according to Mark Conroy, the line’s new president.
“We are the third or fourth oldest line, and we have not own for several years. That will all change in 1987,” he said. “To survive in this market in the long term, you have to be bigger than a one-ship operation.”
Commodore recently appointed a committee, headed by Vice President of Marketing Bob Garrity, to study the best way to acquire additional ships, Conroy reported. Despite some industry reports that the line will probably build a new ship, several key executives at Commodore said that no decision has been made yet. However, they did say that if a new ship is built, it will most likely be constructed in Finland, as that is where the line’s parent company, Sally Shipping, is based.
Caribe Prices Reduced 13%
For the 900-passenger Caribe, the line recently adapted a new marketing strategy in which “great value is the whole pitch,” Conroy said.
According to Conroy, the line has lowered prices about 13 percent. “That should help us avoid last minute discounts,” he explained.
In the past, Commodore has positioned itself as the “happy ships,” and has attracted mostly middle-income travellers. Conroy attributes its success to a loyal passenger following.
Florida, the Southeast and Midwest are Commodore’s key markets, according to Conroy.”There is also a strong potential market in the West, and we hope to be expanding there, as well.”
Controlled growth, however, is the line’s goal.
“As a small operator, we have to develop a very focused marketing effort,” he said. “We have to be very specific about how and to whom we want to target. The ‘whom’ is often a geographic question.”
More Emphasis on Direct Mail
Direct mail is one of the more effective marketing tools, according to Conroy, and one, he believes is underutilized in the industry.
“We are currently studying ways in which we can most effectively implement this type of promotional campaign,” he said. “More co-op partnerships with the trade will also be developed.” During the fall, the line relied mostly on newspaper advertising in its key markets.
Dolphin Adds 19 Free Gateways
Dolphin Cruise Lines – the smallest operator in the three- and four-day Miami cruise market – will complete its first full year of operations reaching near capacities on most of its sailings, except those in September, according to Geoff Atack, director of marketing.
Next year will be even better, he said, particulary because the line has increased its air/sea programs. Free air will now be offered from 66 cities – up from 47 last year-and with all of the line’s cruises, rather than just the four-day sailings.
Dolphin also plans to announce plans for a second ship in 1987, but is not ready to elaborate yet, Atack said.
The key markets in 1986 were Florida, New York, Chicago, Atlanta, and North and South Carolina. There was also an influx of passengers from Los Angeles when Transtar began its service to Miami.
With the addition of the new gateways, Atack expects San Francisco, Detroit and Montreal to be particularly lucrative.
To promote the Dolphin, the line uses newspaper advertising in key cities and has a small sales staff to cover key territories. To a great extent, however, Dolphin relies on word-of-mouth from travel agents, Atack reported.
“They are happy with our product and feel good about recommending it,” he said. The main attraction, he added is Dolphin’s low tariffs – from $325 to $735 for a three-night cruise, and from $425 to $855 for a four-night cruise.
“The quality of the cuisine is also unique for a ship in this market. And we are the only company to offer complimentary wines with meals during a three- or four-night cruise.”
Conroy and Atack believe the small ship operators can stay afloat amid the major lines, as long as their marketing efforts remain focused. They also believe that there is room for everyone, as long as the industry continues to diversify.