In an exclusive with trade media, Viking chairman and CEO Torstein Hagen took several of our questions about the river and ocean cruise line’s debut on the New York Stock Exchange, following its initial plans to do so.
In our discussion, the executive indicates how far the company — which started as a river cruise line, then later expanded into the ocean and expedition markets — has come in its nearly three decades of operation.
Not only are more vessels coming in the future, but expanding into land tours and even safaris may be on the horizon, too.
Why is now the right time for Viking to go public?
Over the past 27 years, Viking has achieved remarkable milestones, in large part because we are so different from others in the travel industry. Becoming a public company is a natural move to further solidify our position as a global leader in experiential travel, delivering high-end, destination-focused experiences under the one Viking brand.
We have an opportunity to expand beyond our current business to allow our guests to explore more of the world in Viking comfort.
[Going public] will increase our financial flexibility and may help us realize future long-term growth opportunities. We will continue to deliver on our existing products, but we have an opportunity to expand beyond our current business to allow our guests to explore more of the world in Viking comfort.
How will having shareholders change, or not change, Viking’s future, compared to other publicly traded cruise companies?
Viking has, from the very beginning, operated in ways that are not all that dissimilar from those of a public company, including having a board of directors composed mainly of non-management and external members. Becoming public will inevitably bring change to Viking, but there are several key things that I feel strongly should not change.
First, we will continue to obsess over our guests. We will do so by continuing to offer them an excellent travel experience at a good value, achieved through the design of our vessels, the service delivered by our staff and the effectiveness of our direct marketing and distribution model.
Second, we will continue to treat all Viking employees as part of a family. We shall seek to keep the family ethos that has been foundational to our company culture since the beginning.
Third, we will continue to be contrarian. We will always emphasize the importance of a long-term view and shareholder value creation, which may mean making use of unusual opportunities as they come along.
Finally, we will continue to do what is right when it comes to the environment. We already have very fuel-efficient river and ocean ships, and we are now working on a project for future ocean ships based partially on liquefied hydrogen and fuel cells, which would be a true zero-emission solution.
What will Viking’s IPO mean for travel agents, particularly considering any endeavors to sell more directly?
We partner with travel agencies to generate a significant portion of our sales, and we are committed to maintaining and strengthening these relationships. We have always had some of the most trade-friendly practices. Viking was the first cruise line — and remains the only major cruise line — with no NCFs [non-commissionable fees]. We believe we have created the most level playing field, with the same pricing available for all.
We believe Viking offers the most favorable booking takeover policy in the cruise industry. All bookings made onboard our ships are automatically transferred back to the original travel agency/travel advisor. And Viking’s marketing has always included the call to action, “Call Viking or your travel advisor.”
We believe that our robust marketing increases sales for all booking channels — and perhaps even the entire industry. Furthermore, we pay one of the highest booking commissions in the cruise industry. Again, our relationships with travel advisors are important to our business now and for the future.
How does the stock prime the company for potential growth?
Our increased financial flexibility is expected to help us realize future long-term growth opportunities.
First, we plan to continue expanding our fleet to address unmet demand from our core demographic. We have 24 new ships on order, including 18 new river vessels and six new ocean vessels, with options for 12 more ships.
Second, we plan to increase guests from outside of North America. We believe there is significant unmet demand for our core products in the U.K., Australia and New Zealand, as well as an opportunity to source guests from India, Singapore and the Nordic countries.
Third, we have started to enter new markets, such as China and elsewhere in Asia, where we see significant growth potential over the long term.
Finally, we plan to strategically expand our product portfolio, with products such as safaris and land tours, to appeal to our guests’ interests while staying true to the one Viking brand. We believe there remain significant opportunities to expand our itineraries and product offerings.
Our guests continue to tell us that they want to travel to new places and experience more with Viking. Our guests know they can expect a consistent, excellent experience on each voyage they take with us, which has allowed us to expand our travel platform successfully with new destinations and experiences.
