Holland America Line: ‘Evolutionary’

The Master Chef's Room on Holland AmericaIn the current economic environment, running a successful cruise line requires a finer balancing act between revenues and costs. How effective that performance is depends on how competent management is, according to Stein Kruse, president and CEO of Holland America Line.

“We have full understanding of where the costs are and how we best can manage them,” he said. “We are focused on improving our productivity and look at everything – the supply chain, vendors, and where we source.

“But we realize that we cannot save ourselves to profits. We have to strike a balance, and there are almost imperceptible ways we can adjust our cost structure, and we are asking people to do more,” he added.

“I pride myself on the fact that during the most difficult times of 2008 and 2009, we tightened our belts, but we did not lay off a single individual. We cut back, there were no wage increases, we cut bonuses and put a freeze on new hires. I had everybody’s best interest in mind – customers, shareholders, travel agents and our 17,000 employees.

“Our most important asset is our employees. They are not on the balance sheet. They are not recognized by Wall Street, yet they are responsible for delivering our product.”

Lest anyone should be confused, Holland America is more about evolution than revolution, according to Kruse.

“We are talking refinement as we move along. Look at our culinary council with five of the most respected chefs in the country and look at our Evenings at Le Cirque. We have transformed the Pinnacle Grill into one of the best dining experiences at sea. We have a partnership with Microsoft for our digital lab and with The New York Times for our Explorations Café.

“We continue to evolve our product in ways that we think are logical, refined and tasteful.”

The tagline Signature of Excellence was introduced in 2003, when the company launched a $220 million program to revitalize some of its older vessels. Since that time the investment has grown to “north of half a billion dollars,” according to Kruse.

He is steering a financially prudent course, however, noting that capital expenditures were higher in the good years of 2006 and 2007 and were curtailed in the leaner years of 2008 and 2009. Eight ships have been revitalized in terms of hardware and software.

While there were no newbuilds for Holland America on the orderbooks at press time, Seabourn was transferred to Holland America last spring, so Kruse in effect got six more ships added to his portfolio.

“It is our responsibility to fix the brand as best as we can,” he said. “It is a solid company. It has grown very fast and has not been able to take advantage of all the systems Holland America Line has. We are ‘wiring’ Seabourn into what we have.”

Having been president of Holland America for eight years, Kruse said he has moved the company to a new level in a much different environment. “It is a more complicated company in a more complicated world. When the time comes and I pass the baton, my objective is to hand over a company that is in as good shape as it can be – solid and progressive, with good people. I want people to be able to count on their career opportunities with Holland America Line.”

Excerpt from Cruise Industry News Quarterly Magazine: Winter 2011-2012

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