Cruise Lines Spar Over Caribbean

Princess Cruises, Royal Caribbean escalate competition for key market

By: Theresa Norton Masek

A battle is escalating in the Caribbean between two of the cruise industry’s largest lines.

In recent weeks, Princess Cruises has announced plans to dramatically increase its capacity in the region, a longtime stronghold of Royal Caribbean International. The campaign even has spilled into the agent arena with dueling trade ads by both Princess and Royal Caribbean.

The public back-and-forth in the media is noteworthy because such pointed campaigns are rare in the cruise industry.

“It’s all intended to be a light-hearted play on words designed to draw attention to our growth in the Caribbean,” said Dean Brown, Princess executive vice president of customer service and sales. “We want to highlight how competitive we are.”

Princess is increasing its Caribbean capacity by 75 percent in the winter 2004-05, basing six ships in the region. Royal Caribbean will have 11 ships in the Caribbean that season.

The Caribbean remains the No. 1 cruise destination in the world, with 47 percent of the industry’s capacity, according to 2002 figures from the Cruise Lines International Association.

Carnival Corp.’s flagship brand, Carnival Cruise Lines, and Royal Caribbean International are the top cruise lines in the region, but the expansion of Princess gives Carnival Corp. a high-profile premium product in the still-growing market.

In recent years, there has been one other ad campaign in the cruise industry that went head-to-head with a competitor.

That, too, was Princess, which took aim at its main Alaska competitor, Holland America Line.

At that time, Brown was the president of Princess Tours, the company’s Alaska division.

Brown maintains the Caribbean campaign is intended to point out how Princess differs from its competitors, but not to attack Royal Caribbean.

Still, the first Princess ad highlighting those features included a new tagline: “Princess. The only truly Royal experience in the Caribbean.”

Royal Caribbean apparently took note of the “Royal” reference and responded with a series of three-page spreads in the trades.

“You’d think our being the best in the Caribbean would have the competition climbing the walls,” the Royal Caribbean ad read, alluding to Royal Caribbean’s rock-climbing walls on their ships. “It would, if they had one.”

The next word from Princess in July was also a three-page spread.

“Because while rock walls are fine for rock climbers, Princess knows you prefer features everyone can get excited about,” the ad proclaimed.

The Caribbean invasion by Princess got under way last April, shortly after the Los Angeles-based premium line was acquired by industry behemoth Carnival Corp. At that time, Princess launched the first trade ad along with a series of travel agent seminars in the East.

Both were designed to gain attention among traditionally strong Caribbean markets, and showcase the differences between Princess “and its primary rival, Royal Caribbean/Celebrity.”

Still, Royal Caribbean’s Dan Hanrahan downplays the Princess ad campaign.

“When we saw the first ads where Princess compares themselves to us, we were very flattered that they see us as the cruise line they want to emulate,” said Hanrahan, senior vice president of sales and marketing.

“But we have no intention of getting involved in a war of words with Princess. If they want to keep running ads, fine, that brings attention to us.”

Royal Caribbean’s three-page ad was just “a message to the trade in general that there are things Royal Caribbean has that no one else has,” he said. Hanrahan said Royal Caribbean will continue its “Get Out There” television campaign with the catchy “Lust for Life” music.

“I don’t see the Caribbean as a battleground,” he said. “We’re competing against other vacation options, such as beach vacations and ski vacations, not the other cruise lines.”

But Princess’ increased deployment in the Caribbean makes sense to Joe Hovorka, a leisure analyst with Raymond James and Associates.

“Princess has never really had a big presence in the Caribbean, so it always seemed logical to move along those lines, even before its acquisition by Carnival Corp.,” Hovorka said.

“Carnival is very savvy in deploying their assets in the best way possible,” he observed.

“The proof will be how these things perform in the revenue standpoint.”