Crystal Cruises: One Year In

With the right product, there is definitely a luxury market, said Arthur Rodney, President of Crystal Cruises, looking back upon the new company’s first year of operations. Last year, Crystal launched the 960-passenger Crystal Harmony in the upscale luxury segment.

Rodney said that 3,800 travel agents were now producing revenue for Crystal compared to 1,600 only six months ago. He said that the average Crystal passenger is 58 years old; earns in excess of $75,000 a year; and comes from a Western state. He noted that one third of their passengers are first time cruisers.

Rodney said that while the first two Alaska cruises had been light, the subsequent sailings were full, and that the New England cruises were fully booked. He said that all the people who wanted to go to Europe still wanted to take a vacation so they went along to New England and Canada instead. He said this area was particularly attractive to Westerners. At the same time, he admitted that spring sailings to Mexico had been less than successful. Rodney also said that the company was taking advantage of the ship redeployment following the Mideast war by introducing the Crystal Harmony on the East Coast and putting more travel agents on fam cruises. He added that to his experience, their most effective marketing is to the travel trade and through recommendations.

Next year, the Crystal Harmony has been chartered for 18 days during the Olympic Summer Games. With 12 ships being chartered, Rodney said there will be fewer beds in the Mediterranean market next summer, which should make it more profitable for the cruise lines sailing there. Crystal will also be sailing a 63-day South Pacific cruise early next year and will come back for four New England/Canada sailings and will finish the year with transcanal cruises.

Rodney said that Crystal will not turn an operating profit in 1991, but expects to do so in 1992. Advance bookings for 1992 also indicate a 20 percent repeat rate of former Crystal passengers, according to Rodney. In 1992, the company also hopes to attract 10 percent of its passenger from foreign markets. Sales representatives have been appointed in Australia/New Zealand, England, Germany, Mexico and Brazil. In addition, there is also a sales office in Japan.

Meanwhile, the company is actively negotiating with shipyards for new tonnage in the same size category as the 49,000-ton Crystal Harmony. Rodney refuted rumors that he was interested in Holland America Line, but noted that he would be interested in the Royal Viking Sun at the right price.

Rodney said that from Crystal’s point of view, HAL has too much invested in ground operations in Alaska and is too dependent on the 120-day Alaska season. Rodney also said that the 740-passenger RV Sun would be acceptable at the $180 million to $190 million market value that was recently given in a prospectus from the parent company, but that the price was no bargain. He said that the ship was considerably smaller than the 960-passenger Crystal Harmony and would also require some rebuilding to fit into Crystal’s plans. He added, however, that RVL was interested in selling both the Sun and the new 212-passenger RV Queen, but that he was not interested in the small ship.

Rodney said that the small luxury ships tended to be too expensive to build and operate. He also said that passengers will not be satisfied with the entertainment and other facilities which will be limited because of the ship’s size, according to Rodney. He also said that small ships were not as comfortable.

Rodney said he believed there were only two ships in the market today that offer “real luxury”, the Crystal Harmony and the Royal Viking Sun, adding that he expected the Sagafjord and the Vistafjord soon to be “downgraded” because of their age.

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