Skipping ahead of competition

With 2023 inventory almost sold out, all future cruise credits utilised, and more than half of its Asia-Pacific customer population being new-to-brand, Regent Seven Seas Cruises’ senior vice president and managing director Asia Pacific, Steve Odell says the luxury brand is ready for a brilliant new year

There is so much talk about pent-up travel demand being unleashed this year. What does this pent-up demand mean for Regent Seven Seas Cruises?
In different degrees, people have been locked up for nearly three years. Some people have continued to spend their money on things like second homes, new kitchens and Birkin bags. But there are also a lot of people who are inherently travellers that didn’t go anywhere and are now just bursting to do so.

The interesting thing for us is that people are now planning further ahead, going for longer trips, and spending more.

Locking travel in far ahead is a general trend now around the world but it is particularly interesting to see in Asia because it is a complete shift in travel patterns; Asians tend to plan for travel in the short-term. It is almost like people have a fear of missing out, that if they booked too late, they might not get it.

South-east Asia has come around very fast, with surprising growth in Indonesia, Thailand and Singapore. These markets opened up earlier than other parts of Asia. China is about six to eight months behind South-east Asia.

We are getting more new-to-brand customers – about 55 per cent in Asia and 57 per cent in Australia. That is quite fantastic. New-to-brand customers tend to prefer something shorter (in duration), so we need to provide something that is between eight and 10 days for them.

We think people are coming from the big ships, wanting something more intimate. Some new-to-brand customers are also new to cruises, drawn by the fact that cruises are a very safe place today. We have robust health and safety protocol, as well as medical care on site.

Regent Seven Seas Cruises had hardly any Covid incidents since we resumed our first sailing in August last year and our last ship in our fleet in March. We never had to stop our ships (because of Covid incidents).

How are your Asian customers booking?
Besides far more planning, they are also taking longer cruises – our average duration in Asia is moving to 14 days, up from between seven and 10 days. Most of the bookings are for Concierge Level and up.

We are also seeing a lot more family and friends travel – people are making up for lost time and planning trips together. We are getting a lot of multi-generational travel groups from Singapore, Indonesia and the Philippines.

There is definitely a shift in behaviour in Asia, perhaps more radically than other markets.

Is there a change in preferred voyages among your Asian customers?
Given that people are looking at longer cruises, some different favourites are emerging. For example, West Africa. I think that is because you cannot really go there by land and it is such a unique destination.

The Mediterranean and Northern Europe will continue to be the core. We’ve got a new Holy Land cruise in October 2023 that offers Cairo and Jerusalem, and that has been quite appealing to people.

There is also a lot of demand for Iceland out of our North Asian markets. Our eight-day round-trip cruise in August is very hot.

Not forgetting our own backyard, our Tokyo cruises are always in high demand. Asians absolutely love Japan. As soon as Japan reopened, people flocked back! So, we have put in more of Japan in our itineraries going forward.

People want unusual things and bucket list experiences that they have never done before.

Seven Seas Explorer will make its maiden voyage to Asia and arrive in Singapore on December 12. At present this season is already on waitlist. Where did all that demand come from?
It is a complete mix from US, Europe, Australia and Asia. We were pretty clever with what we did earlier on. We didn’t stop marketing throughout Covid, we kept spending money, and we focused on close-to-home voyages that we managed to fill quite early on.

So, we don’t have any space on that ship that is arriving into Singapore, and we are almost full on the voyage leaving Singapore for Sydney.

On the way back, we had a little bit of drop out when travellers were due to pay their final balance, which is about now. We had some Europeans and Americans dropping out, leaving a little bit of space for Bali to Bangkok, and Bangkok to Tokyo. I think we are in a really comfortable place though.

How well do you think this intense pent-up travel demand will hold up next year against our VUCA environment?
All our future cruise credits have been used up by 31 December, so 2023 will be a cash year. We are moving into the new year in a very strong position and with very good demand.

We are close to 70 per cent full for our 2023 inventory. We still got some gaps but our marketing and promotion has gone ahead to 2024/25.

The big deciding factor and headwind (for 2024 travel performance) is air capacity because that is still recovering. Airfares at the moment are still ridiculously high. As more flight capacity comes into the market, prices will balance out.

For our customers, issues with interest rates and inflation do not really matter. They can weather that. They are not saving to take a trip. Luxury travellers are quite resilient. So, I don’t think the environment will affect them much. Furthermore, uncertainty has always been there.

You spoke of some customers dropping out from Seven Seas Explorer as final payment approached. They have money, so what happened there?
It was the lack of flight capacity, as well as hesitancy among some people. Some older generation travellers are still worried about travelling too far too soon or being too far from home should they fall sick. They want to travel, but they prefer somewhere closer.

I suspect air availability and cost is the biggest factor, though. We were due to go to Miami about a month ago. Round-trip Sydney to Miami was normally US$10,000 pre-Covid, now US$23,000. People have a threshold for the right price for something, even if they are wealthy. They see that they are paying more for the air ticket than for their cruise.

Many tourism businesses took the years of disruption to reassess their operations, products and guest experience, to come up with something better, more efficient and different. Did Regent Seven Seas Cruises do the same?
We had time to reassess ourselves, and we did a lot of things ship-wise as well as marketing- and product-wise.

We did a lot of refurbishment, a lot of work with the air filtration systems on board, and essential maintenance.

We also did a lot of work on destinations, trying to create different experiences. For example, we revisited quite a lot of our tour programmes and introduced many more eco-friendly shore excursions.

Because (we didn’t stop marketing throughout Covid), we did not have to worry about filling up spaces at the last minute. And so, we were able to perfect our launches for maximum results. We had record launches during the pandemic, which is extraordinary considering how people could not travel then and could only dream of it. We had eight record launches!

Those were strange but very busy years for us. We reduced our staff by just a little bit and didn’t stop spending money. I think that helped our brand to emerge from the pandemic much faster than our peers. Our relationship with our travel agents is also stronger because we didn’t stop supporting them, we honoured commissions, and we paid out refunds very quickly.

How does Regent Seven Seas Cruises regard the travel agent channel, and are there new programmes to engage them for even more business contribution?
Travel agents are a one-stop-shop solution for a lot of issues that travellers face today – visas, medical requirements, travel insurance, flight changes, etc. Travel agents have definitely become more important to travellers since the pandemic. There are more business opportunities for them now. Unfortunately, there are fewer of them.

A big challenge for us right now is to get more travel agents back to work. There are lots of new people coming into the industry from non-travel related industries, and they have to undergo an education process. We are very strong on training and offer a travel agent resource centre that gives them all the tools to sell. However, we have to get more basic than that to train new people, to explain what the brand stands for, how it is different from others, and where the customer fits. This is particularly important for us, as we are a luxury brand and one of the most expensive in the cruise market. We need our travel agents to be able to explain to the customer the value and position of our brand.

Right. They need to be able to sell the Regent Seven Seas Cruises story.
Yes, and that is the hardest thing to teach. If you think about the cruise market in Singapore, you will find that the most noise comes from Royal Caribbean International and Resorts World Cruises because they are here every week and are always in your face. Because there is a lot of volume for them to move, a lot of money is being pushed into promotions.

But they represent only one sector of the cruise market. Regent Seven Seas Cruises is boutique and we have got to cut through all that noise to make sure people understand what our proposition is.

The post-lockdown traveller is said to crave meaningful and responsible travel experiences. Are you seeing that demand surfacing among your cruise customers?
The younger generation, especially, takes ESG (environmental, social, and governance) issues very seriously. They expect travel and tourism options to be responsible.

Eco-Connect Tours is our effort in this aspect. It is a series of more than 150 sustainable tours that provide our guests with enriching opportunities to interact with local culture, communities and nature. Eco-Connect Tours are highlighted in our free shore excursion listing. There are some great experiences – some are culinary focused, some are environmental focused.

More and more, we have noticed that our customers pay attention to the hotels that they are staying before their cruises. They want to know what those hotels are doing about recycling and conserving resources, for example. So, we all have to work in tandem to achieve ESG goals in travel and tourism.

We now tell our travel agent partners to make sure they understand what ESG goals are all about because their customers are conscious of them. Our travel agents must be able to tell their customers what Regent Seven Seas Cruises is doing to achieve ESG goals. Travel agents are welcome to adapt their ESG policy to ours.

How else are your voyages and shore programmes evolving with current traveller expectations?
Through customer research, we know that the destination often emerges as a top three critical consideration. So, we have been looking at how we can evolve the destination message.

One of the things we are trialing today is the Gift of Travel, a series of free included pre- or post-cruise land programmes on select voyages to Europe. We’ve chosen seven bucket list destinations that are not necessarily at the port of embarkation, but close to, like Madrid in Spain, Ljubljana in Slovenia, and London and Cotswolds in the UK.

We are running this for two months, and have earned very good reactions to this initiative because Europe is always a popular destination and the Gift of Travel offers our guests a chance to extend their cruises for three or four nights without having to pay extra.

This is how we evolve. When you include everything like we do, you have to look at new ways to offer value adds.

Let’s whet the appetite of Asian travel advisors looking to sell a luxury cruise experience soon. What can you do for them?
We work with our travel agent partners to craft our products to Asian groups. For small groups, for instance, we can offer small buses. We can tailor to the needs of individual groups or customers.

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