High-touch not high-tech in the cruise industry

The luxury market has changed from ‘having’ to ‘being’, says Hapag-Lloyd Cruises’ CEO Karl J. Pojer. He talks to Susan Parker about the company’s strategy

High-touch not high-tech in the cruise industry
Hanseatic Inspiration and Hanseatic Nature will boost Hapag-Loyd's share of the expedition cruise market (Image: Hapag-Lloyd Cruises)

This article was first published in Spring/Summer 2018 issue of the International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.

Hapag-Lloyd Cruises held its first press conference in London to target the international market in September 2012. At that time, it was also building Europa 2, which was specifically designed to appeal beyond Hapag-Lloyd’s traditional German-speaking clientele to a wider audience.

Just over six years later, the brand has revealed its first English-language main brochure for Hanseatic Inspiration. Now in the early stages of construction at Vard’s Tulcea shipyard in Romania, she is one of Hapag-Lloyd’s two expedition ships scheduled for delivery in October and April 2019. The other is Hanseatic Nature.

“Hanseatic Inspiration will be the second fully bilingual ship in Hapag-Lloyd’s fleet and we’re developing that strategy,” says Karl J. Pojer. “Today we’re very well off with German-speaking countries on Europa, Bremen, Hanseatic and Hanseatic Nature, but the additional capacity will make the international market a great add-on. The international offering is good for the onboard atmosphere.”

The fact that Hapag-Lloyd’s owner, the TUI Group, fully supports the line’s growth strategy and market positioning shows that the plan is working. “TUI Group already does 50% of its business through cruise ships [also TUI and Marella Cruises] and hotels, so there’s a very strong backing for what we’re doing,” Pojer explains. “As long as we’re successful in contributing to the brand and the bottom line, this will continue forever.”

The future certainly looks promising. “Despite expedition bookings not opening until 23 January 2018, we had 6,323 pre-bookings by 16 January – including 2,400 for Hanseatic Inspiration,” says Pojer. “Over 42% of the total guests are ringing week by week, and if these are converted to sales, we might have a good start. We believe that we’ll achieve even more internationally than we did with Europa 2.”

If Hapag-Lloyd’s existing expedition ship Bremen is anything to go by, the company already has a dedicated expedition following. Bremen is the most popular ship in the fleet, which is demonstrated by the fact that, in early January, there were only 46 cabins left available for 2018. While she may be an older lady, Bremen was one of the first to receive the polar ship certificate, which becomes mandatory for vessels operating in polar regions from January 2018.

The global expedition ship orderbook has reached unprecedented levels, which is increasing market competition. “Research into the German-speaking market shows that, although there will be about 20 expedition ships arriving – seven in Germany – the potential is three times higher, so we strongly believe that our leadership and experience in that segment is key,” Pojer comments.

He adds that the diversification, variety and flexibility that can be offered by having three expedition ships gives Hapag-Lloyd something special. “There will not be many ships coming out on expedition that will also be five-star. The general market is big enough and we have our niche, which will enable us to fill our ships accordingly.”

It also helps that Hapag-Lloyd is not solely focused on expeditions. “Last year we had the best financial results in the company’s 127-year history,” notes Pojer. “We had the highest rate of repeaters [65%], the highest rate of guest satisfaction [98%] and also the quality of the guest experience was the highest. In the German-speaking market we are the quality and market leader with a very strong and loyal customer base.”

Pojer believes that Hapag-Lloyd’s brand is a strong one, especially today when clients are looking for security, individual service and a particular product. “We’re not selling cabins and suites, but experience and emotion,” he says. “I think this counts at the end of the day and that’s important. As long as we can deliver that and develop it further, we’ll have a very strong position in the market.”

Already strong in the German market, Hapag-Lloyd is now developing its Dutch, Belgian and UK markets, says Pojer. “We have good potential for markets that want high quality and luxury expedition.”

Owning ships is key to meeting new market demands, says Pojer. In this respect, the fleet’s only chartered ship, Hanseatic, will return to her owner in October this year. The brand also refurbishes the vessels every two years. “We don’t have to, but in the luxury market, you have to stay on top of trends and constantly increase the hardware quality,” he comments. “You can’t stand still with a luxury product. We’ve recently invested almost €10 million (US$12 million) in refurbishing both Europa and Europa 2 at Blohm + Voss shipyard.”

Pojer shares more of the brand strategy he has masterminded since he joined in May 2013. “We had top crew, a lot of experience, a highly motivated team and good hardware, but we had to be clearer to the market about what we are and what we’re not, what we do best, or better than others. When Europa 2 debuted, we had to tell our clients and the retail market that we had something totally different to before. We decided we didn’t want to cater for all segments, but concentrate on luxury and expedition. To do that properly, we must understand how luxury travel works and anticipate what clients want.”

According to Pojer, luxury is a combination of hardware and software. “Our biggest asset is the crew [crew to passenger ratio of 1:1.4] and we’re very strict on casting these people,” he says. “When spending a lot of time onboard, it’s important that there are certain relationships built up between crew and clients. It’s also important the crew communicate on a certain level and has good manners.”

Taking responsibility for the environment is another key tenet at Hapag-Lloyd. The new expedition vessels, for example, will have battery-powered Zodiacs, cold-ironing capabilities and will burn 70% marine gas oil so they can be self-sufficient for at least 36 days. “If you have a strategy inspired by nature, you can’t have submarines and helicopters onboard – we strongly believe in that,” Pojer says.

Just like Hapag-Lloyd’s captains, Pojer and his team are skilled at sailing uncharted waters. “A lot [joining this sector] are underestimating the challenges of expedition,” says Pojer. “Expedition is no place for experiment. In creating this new Hanseatic-class we want to set new standards for routing, quality and crew. This is really a promise.”

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Susan Parker
By Susan Parker
Monday, June 25, 2018