The stars must be aligned for change in the cruise industry. It’s normal for executives to be promoted, to retire or to move elsewhere, but never in more than 25 years of covering cruising have I seen anything remotely like the across-the-board changes in leadership in the past year and a half. Collectively, these moves have the potential to transform cruising.
Some of the new executives are cruise veterans, while others come from outside the industry. More women are moving to top positions. The major lines are being reinvented, as are the corporations behind the brands, and these changes will impact the world of cruising. The immediate result of these moves will be an intensified global perspective, more shared services across brands and an emphasis on finding and developing talent.
Going Global
The new appointments and reshuffling of responsibilities reflect a growing emphasis on the global nature of cruising.
As president and CEO of Cruise Lines International Association (CLIA), Christine Duffy spearheaded globalization of cruise associations around the world to create a unified voice for the industry. Now, as president of Carnival Cruise Lines, she joins the company just as it has initiated aggressive growth in China and deployment into Australia and Europe.
“My experience running CLIA for four years gave me a unique opportunity to learn the industry at a global level,” she said.
Alan Buckelew, chief operating officer (COO) of Carnival Corporation & Plc, has expanded his role, moving to China to spearhead partnerships and initiatives the company is pursuing in this market. Strategic planning and development has included a partnership with Chinese shipbuilders to explore joint ventures, working on port development and regulations and setting up a domestic Chinese cruise brand.
Orlando Ashford, president of Holland America Line, left a global consulting firm to join the cruise industry. Ashford was president of the talent business segment at Mercer, a firm with some 20,500 employees that operates in more than 130 countries. He now has the opportunity to put into direct practice the advice he has given major corporations, such as how to gain access to millions of eligible workers worldwide who have skills and experience but, in many cases, not the usual credentials.
“I want us to get more than our fair share of the human capital that has been overlooked,” Ashford said.
The belief that a strong team is essential to building a superior cruise line is shared by other new leaders. Former Darden Restaurants executive Drew Madsen was brought in by Kevin Sheehan to succeed him as president and COO of Norwegian Cruise Line.
Since taking the job, Madsen has been deeply involved in employee engagement. Under Madsen’s leadership, Darden was recognized three years in a row as one of Fortune’s 100 Best Companies to Work For. Madsen has stated that the effort put forth by cruise line employees is what makes the difference between an average cruise and a great one.
New Responsibilities and Possibilities
With new leadership comes increased efforts to restructure and share more functions across brands. Last September, for example, when Norwegian announced it was acquiring Prestige Cruise Holdings (composed of Oceania Cruises and Regent Seven Seas Cruises), synergy was cited as a major factor.
“Our complementary strengths and skill sets will pave the way for new cross-selling opportunities, cross-brand collaboration and cross-business support,” said then-CEO Sheehan. “It will also lead to joint partnerships that, coupled with meaningful synergies that can be quickly implemented, will provide solid accretion to earnings per share and drive long-term shareholder value.”
The acquisition resulted in expanded responsibilities for several executives. Crane Gladding was named senior vice president of passenger services for three separate reservations teams, and Colin Murphy became senior vice president of destination and port operations for all three lines (Norwegian, Oceania and Regent). International sales for the three brands is headed by Andrew Stuart, executive vice president of sales, international sales and charters, who is also responsible for meetings, incentives and corporate events for the brands.
One of the most intriguing developments involved the role of Frank Del Rio, co-founder of Oceania and CEO of Prestige since April 2007. Del Rio had planned to semi-retire, but each time he tries to do so, it seems a new job opportunity arises.
With the unexpected departure of Sheehan, Del Rio is now president and CEO of Norwegian Cruise Holdings (Norwegian, Oceania and Regent). Jason Montague, former chief financial officer (CFO) of Prestige, is now president and COO for Oceania and Regent, following the surprise departure of Kunai Kamlani.
An industry veteran with Oceania from its inception, Montague described himself as “not the traditional CFO.”
“I was always entrepreneurial, and we were a small company and all wore many hats, so I was involved in everything from agent relations to itinerary planning,” Montague said. “I have a talent for numbers, but I always wanted to be more into operations.”
Montague’s key goal is to keep the innovations coming, and his chief challenge is the introduction of two ships for two brands in a three-month window. He’ll be put to the test when Ocean Princess debuts as Oceania Sirena, and Regent’s long-awaited Seven Seas Explorer launches next July.
“With Oceania, it’s a little easier; people already know the R-ships and what to expect,” Montague said. “But it’s going to take considerable work to help people understand Explorer.”
Several executives have grouped responsibilities. Seabourn Cruise Line president Richard Meadows now heads two luxury lines as president of Cunard Line North America. Meadows sees the two brands as very distinct from each other, and he intends to keep them unique and separate. He defined Seabourn as smaller-ship luxury, with an exploration angle and access to unusual ports, and Cunard as luxury on a grand scale, with a broader array of accommodation options.
“These are two different brand propositions,” he said. “That’s why two different teams will remain: Cunard in Santa Clarita, Calif., and Seabourn in Seattle.”
Seabourn has two newbuilds on order as it releases its smaller ships to Windstar Cruises, and Meadows believes the company’s long-term partnership with UNESCO World Heritage sites will be “another step to deliver on the mission to help guests connect to experiences that are relevant and life-changing.”
He said the task with Cunard is combining the line’s tradition with relevant style, bridging the legacy of the Golden Age with modernity.
“There’s incredible power in history, and people still love those things that are timeless and elegant,” he said.
Other major executives promoted from within include Michael Bayley, now president and CEO of Royal Caribbean International, and Lisa Lutoff-Perlo, president and CEO of Celebrity Cruises.
Market penetration is Lutoff-Perlo’s top priority. To that goal, Celebrity is equipping travel agents with numerous ways to get first-timers to try cruising, from its Explorations land programs and a presence in the Galapagos to new combined river-and-oceangoing cruises.
“I have always believed we can have greater market penetration,” she said. “It’s the new-to-cruise consumer who is our biggest opportunity. I can’t take credit for our destination strategy, but I think it’s terrific. People are brought in because of our city stays, through river cruises and thanks to exotic cruises such as the Galapagos. I look forward to strengthening this aspect even further.”
As cruise lines adjust to new leadership, agents can expect to see sharp messages of brand distinction and education aimed at bringing first-time cruisers onboard. There will also be a greater emphasis on international markets, with some ships being redeployed as a result. Perhaps best of all, the North American market will be poised to achieve the growth that has been elusive all along.
