Princess Cruises: Delivering Today for the Future

Royal Princess under construction at FincantieriThe key to the future is how you deliver (the product) today, according to Alan Buckelew, president and CEO of Princess Cruises. “How well we please the passengers today will be the key to our long-term success,” he said. “Happy customers will not only return, but they also go home and proselytize.”

Buckelew described Princess as the largest premium brand. “We cater to experienced cruisers with a wide range of itineraries around the world,” he said. “Our ships are consistent with a familiar Princess feel that our guests find attractive. The onboard environment is comfortable and relaxing, giving our guests an opportunity to rejuvenate. We are catering to their needs.

“Service is key to our success. We want to be the consummate host, allowing our guests to escape.”

While evolving, the basic product has not changed much over the years, according to Buckelew. He said: “Our three brand pillars are destinations, great service and an atmosphere of relaxation.”

With a modern 16-ship fleet, Princess is building two new vessels at Fincantieri for introduction in June of 2013 and spring 2014. At 141,000 tons and 3,600 passengers each, they will be the largest ships in the fleet.

“The larger scale has allowed us to take the atrium to a whole new level,” Buckelew said. “The atrium is 50 percent larger than our previous ships. As soon as you walk in, you will feel the excitement.  We have created an entertainment hub in the ship, with cantilevered bars. It will be spectacular.

“We have also expanded the spa and moved it to Deck 5, and we have added a TV studio, plus a few other smaller features.

Behind the scenes, being a prototype design, the Royal Princess will be much more efficient, according to Buckelew. He noted: “We have considered every aspect of the ship. When you continue to build sister ships, you have fewer opportunities to improve, but with a new ship, we started with a clean sheet of paper and attacked everything – the hull, propellers, hotel-side – to make everything more efficient”

Built in 1984, the original Royal Princess was also a prototype – the first ship to feature an atrium, all outside staterooms and balconies. On the new Royal Princess every outside stateroom will have a balcony – otherwise new features will be similar to the other ships in the fleet, Buckelew explained. “We try to improve with every new ship. “The new Royal Princess will have a more exciting Sports Court and the Seawalk will be a first in the industry.”

The Seawalk is top-deck, glass-bottom walkway, extending more than 28 feet beyond the sides of the ship.

A sister ship, the Regal Princess, which is already under construction since the keel laying in August, will be almost identical.

While Princess’ market focus has always been on English-speaking markets, its reach is getting broader.

“Our sister companies in the UK, Australia and New Zealand have been selling our product there, and over time, their success has allowed us to deploy ships in these markets.

“Over the past five years, we have grown the Australian market to become a little bigger for us than the UK. The majority of our passengers are from Australia and New Zealand, but also from Asia and Europe,” he said.

For the 2012-2013 season, with four ships, Princess will have the largest Australia and New Zealand deployment of any of the North American-based cruise lines.

Next April Princess will also be deploying a ship out of Japan. “We have been looking at Japan for a long time. We see this market as an opportunity. It is the fourth largest economy in the world and an island nation used to the sea and sea travel. We are tipping our toe into the market,” Buckelew said.

Buckelew said he is focused on making the business more efficient, while managing the cost pressures on commodities. This requires rethinking of priorities and creative solutions, including offering more self-service options to customers and partners.

 “Fundamentally, we are not changing what we do, but how we do it – becoming smarter, more efficient – and get the same or better results,” he said. “It comes down to creating a better product for less money.”

Buckelew continued: “Ultimately, it is people who drive our success. When guests write and comment on the cruise, they rarely mention the hardware, but they talk about the service and the crew they have interacted with.

“Hence, we are working on training and service delivery all the time, aligning our crew with our mission and core values. We have approximately 26,000 employees.”

While the bottom line is profitability, especially for a publicly traded company reporting quarterly earnings, Buckelew said there were two ways to measure profitability: one is the traditional way, reporting earnings per share for the last quarter, the other is reporting the measures the company is taking to ensure that the brand is profitable in the future.

According to Buckelew it is a balancing act – delivering success today, while also building for the future.

Excerpt from Cruise Industry News Quarterly Magazine: Fall 2012

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