Fred. Olsen Expanding Passenger Sourcing, Adding New Vessel

Fred Olsen Cruise Lines will expand its passenger markets and develop new itineraries, following the acquisition of the 750- passenger, 28,000-ton Star Odyssey, which is currently sailing for Royal Cruise Line, a division of NCL Holding (the former Kloster Cruise Limited).

The Oslo, Norway-based Fred Olsen purchased the 1972-built vessel last month for $55 million from a Bahamian firm, F&A Corp. Ltd., which had bought the Star and Royal Odyssey for $ 110 million on a sale/charterback agreement from the former Kloster.

Oslo and Miami-based Hoegh, Persen & Partners brokered the deal.

According to Nigel Lingard, Director of Fred Olsen in Ipswich, England, the firm has been looking for a second cruise ship for the past three years. During that period, added Lingard, Fred Olsen had made a previous unsuccessful bid on the Star Odyssey.

Fred Olsen currently operates the 11,500-ton, 450-passenger Black Prince on longer European programs that average about 17 days in duration, said Lingard.

A Good Fit

Various factors make the Star Odyssey ideal for Fred Olsen’s needs, noted Lingard.

“She is a ship that was designed for long distance cruising – for instance bunkering and water capacities allow the ship to sail for long distances. Most second­ hand ships are very slow, but the Star Odyssey has a cruising speed of around 18-1/2 knots.

“Additionally, she has good-sized cabins, good deck space and public space that we can easily convert to our specifications,” Lingard said.

The company will take delivery of the ship, to be renamed Black Watch, in October at which time she will undergo a one-month refurbishment, at a yet-to-be­ determined shipyard, before assuming service in November under the Fred Olsen banner.

The bulk of refurbishment will be to the ship’s public areas, although Lingard noted that some cabins will be fitted with upper berths to suit the line’s heavy summer-season family traffic.

The Star Odyssey will also “be brought back to two-seating dining” in the main restaurant, said Lingard: An alternative dining option is also under consideration.

Many of the ship’s shops will be re-located. “We don’t think the present shopping facilities are adequate enough to meet our passengers’ modern-day shopping demands,” noted Lingard.

And most of the ship’s present casino facility will be removed.

The changes pave the way fo r expansion of various areas, said Lingard.

“The vessel will be furnished with a much larger library and reading room; a bigger card room will be added because our passengers like bridge; a better children’s area will be provided; and the ambiance of the lounges will be altered to fit our passengers’ tastes,” he noted.

New Passenger Markets

With a second ship, Fred Olsen is looking to develop new passenger markets, specifically from Holland and Belgium. The line’s primary market now is from the UK, which accounts for about 98 percent of the company’s business: The remaining two percent are split between Holland and the U.S.

“We have discovered that the Dutch and Belgian markets cruise well with our primary audience from the UK,” said Lingard.

And, because the ship is well-known to Americans, Fred Olsen also hopes to develop additional business from the U.S., mostly from the Northeast corridor, and especially for the firm’s Norwegian/Baltic programs. According to Lingard, Fred Olsen will continue to rely on its exclusive marketing agent, New York-based EuroCruises, to bring in more passengers.

Lingard anticipates that average brochure per diems for the Black Watch will be about 160 pounds: currently the Black Prince commands approximately 120 pounds.

With an occupancy rate of around 94 percent, the Black Prince carried about 10,000 passengers in 1995: The vessel averages about 20 to 22 voyages per year. Bookings for 1996, noted Lingard, are “the highest ever,” with relatively minimal lowering of prices which Lingard directly attributed to the “dumping” by North American lines in the UK market.

Fred Olsen, he added, remains virtually unaffected by the low pricing strategies of such UK operators as Airtours and newcomer Thomson vacations, because they sell inexpensive products.

New itineraries are also on the horizon for Fred Olsen.

“In early 1997, we intend to conduct Great Britain to South Africa itineraries because a lot of our passengers still have relatives in South Africa.

“We are also looking at an around- the-world voyage in 1998,” noted Lingard.

“There is also corporate interest to eventually develop the Far East market with, for example, an eight- to 10-week winter sailing season in the Far East,” he said. Singapore would mostly likely be the homeport of choice because of its proximity to various ports of call and the republic-nation’s good air connections.

However, Lingard acknowledged that the staggering airfares to the Far East region serve as a crippling factor to developing these programs.

More Ships?

As for future expansion, although focus remains on bringing the Star Odyssey into the Fred Olsen fleet, Lingard noted that, “The Star Odyssey has two sister ships – Roval Odyssey and Crown Odyssey – and we would not be adverse to looking at them down the road.”

However, NCL announced that it has exercised its option to extend the charter of the Star Odyssey and Royal Odyssey. While NCL will charter the Star through Sept. 24 until the ship’s delivery to Fred Olsen, it plans to operate the Royal Odyssey through 1996.

Additionally, the Crown Odyssey will transfer to the NCL fleet, to be renamed the Norwegian Crown.

It is also reported that Seabourn Cruise Line has been in discussions with NCL Holding about RCL’s fourth ship, the Queen Odyssey which was originally built in 1992 as a sister ship of the two ships currently operated by Seabourn.

NCL said that an announcement regarding the Queen Odyssey’s future will be made shortly.

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