TUI Cruises on playing the numbers game

Sam Ballard speaks to Wybcke Meier, CEO of TUI Cruises, about the company’s plans for cruise industry domination

TUI Cruises on playing the numbers game
TUI Cruises' new Mein Schiff 6 offers luxurious suites, an outdoor pool, contemporary public spaces, and custom-made artwork
This article was first published in the Autumn/Winter 2017 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.

Founded as a joint venture between Royal Caribbean Cruises Ltd. and the TUI Group, TUI Cruises has always been a curious animal.

Targeting premium clients in Germany’s growing cruise market, TUI Cruises has offered the country’s 2.02 million cruise passengers a middle ground between Carnival Corporation’s AIDA Cruises brand and the ultra-luxurious operator Hapag-Lloyd Cruises. The company has defined its customer base as being those who place a “particular importance on personal choice…quality and individual service”. The average age of its passengers is 51, putting the mix of customers sailing with the line as being everything from young families to retired couples. TUI Cruises is more a concept than a cruise for a specific customer. And, with 40% repeat rates, it’s clearly doing something right.

The success that the company has enjoyed has been well documented. Since launching in 2008, it has embarked on a rapid expansion plan. Mein Schiff 1 was launched in 2009 followed by Mein Schiff 2 in 2011. In 2014, the company debuted its first newbuild and followed this with a new vessel every subsequent year to 2017, when it introduced Mein Schiff 6.

“The launch of Mein Schiff 6 went very smoothly,” explains Wybcke Meier, CEO of TUI Cruises, who has been in charge of the company since 2014. “Just like Mein Schiff 5, our latest newbuild was delivered ahead of time – we got her six days early. This gave us the chance to offer pre-cruises to interest potential guests in our vacations at sea. Our regular guests were of course also very excited about our new ship with all her highlights. The trips were fully booked in a very short time.”

The next two vessels to launch will disrupt TUI Cruises’ unabated chronological naming system. Next year, the company will introduce a new Mein Schiff 1 and Mein Schiff 2 to replace the current Mein Schiff 1 and Mein Schiff 2, which are the former Celebrity Cruises’ Celebrity Galaxy and Celebrity Mercury, respectively. The move will complete the line-up for TUI Cruises for the time being, Meier says, giving it an entire fleet made of vessels built to their own designs.

“The newbuilds will replace Mein Schiff 1 and Mein Schiff 2 successively, which will then cruise for Thomson Cruises in the future,” she adds. “With this highly modern six-ship fleet we aim to increase our market growth in the long run. The new category of ship will be a little bit bigger and we will have more suites, in order to meet our guests’ demands. The product as a whole remains the same. The new ships will also cruise under the Mein Schiff concept.”

Weighing in at 111,500gt, compared to the 99,000gt Mein Schiffs 3 to 6, the newbuild is another step up for TUI Cruises and shows the confidence with which Meier is steering her company into the future.

The pace of the growth is becoming a serious business for the company. The German market, which is currently the third biggest in the world behind the US and China, generated €2.95 billion in direct cruise industry expenditure. Meier and TUI Cruises are looking for a bigger chunk of that market.

“With the growth of our fleet to six ships, it is our corporate goal to expand our market share to around 30% in the German-speaking source market by 2019,” she explains. For any one line to try and take that much of a country’s business within the current climate is unheard of. National lines in most countries do not have that kind of pull any more – either through the diversification of holding companies, or a general diluting of the market with other similar brands.

The way that Meier and TUI Cruises have managed it is multi-fold. On the one hand, they have captured an important part of the market. Germans have traditionally been avid fans of river cruising and Meier has made sure that her company is at the forefront of a rising popularity for ocean cruising. The other major string to TUI Cruises’ bow is the strength of its distribution channel, and it’s certainly paying dividends.

“Agents still play a very important role for us – direct sales make up about 14%, while the rest of our trips are being sold through travel agencies,” Meier says. “This share is still relatively high due to the product itself: cruises often require intensive consulting. For this reason, it is very important for us to inform our travel agents about our product in the best possible way. To ensure this, we have our sales team, offer training courses and the chance for our travel agencies to come onboard and get to know our product on a regular basis.”

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