This article was first published in the Spring/Summer 2015 issue of International Cruise & Ferry Review.
River operators are adding ships, some more than others. While this is a positive trend for the industry, it is beginning to create some concern about the amount of capacity coming onstream and how to differentiate brands.
Uniworld’s largest market is the US, followed by Australia, Canada and the UK. It is a little different from its competitors in that it owns and operates its 12 ships in Europe while chartering one on the Douro. In total it sails on 17 vessels. Chief executive officer Guy Young comments: “The biggest challenge is the amount of capacity that we see on the rivers now. My view is that it is has almost doubled in the last three years.
“I think for the first time in 2015 the supply is exceeding demand so it is harder to fill the ships. We want to maintain our yields but there is a lot of discounting in the market place.”
Growing at the brand’s own pace is key, says Young. “Our motto is ‘not the biggest but the best’. We don’t want to over-extend ourselves. In the last two to three years, even during the huge uptake, we have stuck to our model and we think it works well for the company. As long as the market remains strong, we can rationalise all the newbuildings but at some point in time there will be a downturn and we want to be able to get through it. All our ships are self-financed which to a degree limits the number of ships we put out each year.” The company has launched one or two ships a year for the last six years with Maria Theresa being introduced this year.
David Winterton, brand manager at Emerald Waterways (EW), agrees: “The main challenge is ensuring capacity remains on a par with demand and that we don’t all get giddy and start adding capacity because we will just end up reducing costs like ocean cruising.” Next year the EW fleet increases to five vessels while fellow brand Scenic takes delivery of four, bringing the total to 16. The former’s market is about 50% UK while the latter is 60% Australian.
Over at Tauck, which has seven vessels with two more coming next year, senior vice president River Cruising Katharine Bonner says that differentiating the product is key. “It takes a while for people to understand the brands. When travel agents think about [ocean] cruising it is pretty easy to see who is mass market, luxury etc. but with river, understanding it is a little more difficult because the market is growing so fast.” Tauck carries 85% North American passengers but the UK is becoming a very important market with three sales employees now working in the UK. “So far our demand is larger than our inventory.”
When it comes to building, Viking Cruises is bringing tonnage to the market at an enormous rate. Senior vice president Richard Marnell says keeping a clear vision of the target market is key at this time. “We are very focused on our core demographic of experienced travellers, aged 55 and older, who have an interest in history, art, culture and exploring new destinations. Some of our competitors are starting to broaden their audience with the addition of child-friendly programmes and onboard gimmicks. We do not try to be everything for everyone.”
Young, however, is finding the family market a positive one, having worked on it for some time. “Next year we will have 16 departures [from five this year] for those parents who want their children to have an immersive experience in culture. The ones we have done have all sold out. We do see this as a great opportunity. We have specially designed excursions and menus for children and hands-on workshops onboard.”
Meanwhile UK sales manager for AmaWaterways, Natalie McMahoney, says: “River cruising is the fastest growing sector of the travel industry and growing even faster than the ocean cruise market. The recession has had surprisingly little impact. Demand has been consistently high and to meet the international increase in demand, AmaWaterways has built two new ships each year for the past five years.” Next year is no exception with two more coming onstream.
Viking’s bullish newbuilding programme is slowing from 12 this year to six next. Marnell comments: “In recent years we have built ships at twice the rate of all our competitors combined and in the last four years alone we have launched 40 of our longships.” With a fleet of 60 vessels it has 50% of the North American market share.
Due to the rivers and bridges, river ships are restricted in length (to 135m) and height and hence the key is in the interiors. How these are configured can vary significantly depending on the number of passengers onboard. For example, Viking accommodates 190 while Tauck carries 130 on the same size of vessel.
Each operator has different attributes. Marnell explains: “By utilising three full decks [compared to two-and-a-half on most ships] and moving the galley forward, we are afforded remaining space for additional standard staterooms on the main deck, providing not only more capacity, but also more stateroom category choices. By hosting more guests on each of our sailings, we are able to offer a better value across the board.”
MacMahoney comments: “Twin balconies are exclusive to AmaWaterways’ new generation of ships and the newest ships also feature interconnecting cabins. A Mozart cafe is being installed on new and existing ships. The most recent newbuilds have deck-top swimming pools, spa and massage facilities and running tracks.” EW has its “unique pool at the back”, says Winterton.
At Uniworld, “each ship is one of a kind and we do invest more than our competitors,” says Young. “Every single ship starts from scratch in terms of design and theme and we try to match it with the region in which they are travelling. We have a very different style and approach to shipbuilding and outfitting which is the most visible point of differentiation.”
More attention is now being paid to health and wellness. “We do now have a health coach, light menus and gyms onboard all our ships. From 2016 we will expand our butler service for suite guests to the entire fleet.”
At Tauck, the ethos is very different. Bonner says: “Our ships are great but for us and our guests it is about destination experiences and what we can craft that is exclusive to Tauck.” For Scenic too, “it is all about the experience and having a wonder moment,” explains brand manager Nicola Absalom. All-inclusive too is important: “Others say they are but they are not.”
New rivers and regions are being added both within and beyond Europe. In terms of the latter, Viking entered Myanmar for the first time in 2014. AmaWaterways has added Mekong, Irrawaddy, Zambezi and Chobe to its portfolio. Scenic launches Mekong next year and EW has done so too. Meanwhile Uniworld is heading for the Ganges early next year on 56-passenger newbuild Ganges Voyager 2. Being the first into destinations is something it does well. For example it was the first North American operator on the Douro, Venice and Po and also in Bordeaux, according to Young.
With rivers becoming more popular, infrastructure is under pressure. More is being built and new places emerging but Bonner comments: “We have to plan well ahead to get into the docking locations that we want. A lot of smaller cities on the rivers are building docks and waking up to the opportunities it presents to them.” Young adds: “The rivers are becoming more crowded. We are looking for new docking arrangements, alternative docking times so we are not there with everyone else.”
Alternative shore excursions are also being sought both due to the increasing numbers but also as a way of differentiating one brand from another. Young highlights an example of this with Uniworld’s immersion excursions which it has been working on in the last couple of years. Themed sailings at AmaWaterways include Jewish heritage and knitting cruises.
While most of the companies are not involved with crewing, Young does point out that sourcing crew is becoming more difficult as the capacity increases. “For operators staffing is more challenging. We have a strong reputation for being a good employer but, for example, we are finding captains very challenging to find now.”