New Upscale Line Favoring Small Ships

“I believe that the market likes smaller ships, and we are building a cruise ship with complete, spacious facilities,” Warren Titus said, “not a yacht or a new concept that cruise passengers and travel agents would be unfamiliar with.”

This is partially why he believes that the new yet unnamed Norwegian cruise line he is heading up in the United States will work.

According to Titus, the major problem of Sea Goddess and Windstar is that they came into the market with new ship concepts and thought they had identified a niche. But the ships may be too original.

“Sea Goddess was not a yacht nor a cruise ship,” Titus said, “which makes it very difficult to know how to communicate to your market. And to a degree the same applies to Windstar. It is a brilliant concept, but you also have to sell it.

“We are going into this open-eyed,” Titus explained. “We know very well what the pitfalls are, and feel we have countered them in the design of our new ship.”

The ship is expected to be between 9,000 and 10,000 tons, 432 feet and will carry 200 passengers in all-outside suites with picture windows. There will be a total crew of 93. Deck and engine crew will be Norwegian; hotel staff will be European.

Norwegian Petter Yran is the interior architect. He also designed the Sea Goddess sister ships.

The $46 million ship is being built at the Seebeck Werft in Germany. Tank tests of the hull were recently completed. Corporate offices will be in Oslo, Norway. CEO is Erland Raastad who most recently was President of Kloster Cruise overseeing Norwegian Caribbean Lines and Royal Viking Line, and was formerly President of Royal Viking Line in San Francisco. The new line is owned by the Norwegian company Made In whose principal owner is Atle Brynestad, a Norwegian financier who is already involved in the travel industry through a number of hotels in Norway.

According to reports, the company has achieved “excellent financing terms” including the normal 8 percent interest over eight-and-a-half years and yard subsidies up to 28 percent under EEC guidelines.

The new line will primarily be marketing its cruises in the United States. It will aim at a broad-based FIT sales approach, but will also target groups through retailers and wholesalers. Charters are something Titus will consider for the long term. He is ideally looking at charters 2 months out of the year and fixed at least a year in advance.

Titus is looking at the existing upscale cruise market, but will not commit to per diem rates as high as $650 which have been reported in the press. He is also looking at converting a younger market -­ “in the 40’s and up.”

“Our break-even point based on a reasonable per diem around a 50% load factor,” he said.

The new line is now undertaking market studies to determine what the situation will be in 1989 in terms of rates and what the best cruising areas will be. Itineraries and rates are expected to be set by September/October.

Tentative plans call for 14-day cruises offered in seven-day segments – in Northern Europe in the summer; in the Mediterranean in spring and fall; and in the Caribbean, South America or trans-Canal in the winter.

Promotion to travel agents will begin with trade advertising and direct mail in October.

Consumer advertising will start in January of next year.

Titus is currently establishing cruise line offices in San Francisco and is hiring staff executives. Concessions and outside services have not yet been finalized.

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