INSIGHT
IS CRUISE FACING
CRUNCH TIME?
Juliet Dennis looks at the cause and eff ects of Carnival UK’s decision
to ditch its Ocean Village brand – news that has sent ripples through a
sector thought to be resistant to the global fi nancial crisis
Plans to scrap the fi ve-year-old
Ocean Village brand shocked
the trade this week but showed
the sector is not immune to the
economic downturn.
The news came days after sister
brand Carnival Liberty pulled
ex-Dover sailings for 2009 and
follows Island Cruises’ acquisition
by Thomson Cruises.
Carnival UK chief executive
David Dingle attributed the
transferral of Ocean Village’s
two ships to P&O Cruises Australia
by the end of 2010 to the
pressure of high fuel and air
costs and the fact the ships can
make more profi t in a less mature,
growing market. “Where
you see an opportunity elsewhere
it would be irresponsible
not to act on it,” he said.
Observers point out the
cruiseline’s brand is still a
relative newcomer, relying at
certain times of year on the
struggling family market without
the back-up of its own
airline or shop network.
Dingle is adamant the move
is not a result of failings of Ocean
Village, which carries 100,000
passengers a year, or the concept
of using older ships with a lower
book value to reap “adequate”
returns on lower margins.
Revenues and general cost
control are decent, he said, and
there is a well-developed recog-
nition of the brand. He added: “It
is not a demand issue. This is because
of the rising cost of fuel.”
Taking the ships out of UK
circulation will mean a drop of
3,300 beds. However, by the
end of 2010 the group will
have added 5,200 beds with
P&O’s Azura and Cunard’s
Queen Elizabeth 1 and 2 ships.
“I am not in any way reducing
our UK presence,” added Dingle.
Operating fewer brands
would lead to greater business
effi ciencies, he admitted, but
stressed capacity growth elsewhere
in the group and natural
attrition meant no job losses
were anticipated.
To establish itself as the informal
cruiseline “for people
who don’t do cruises”, Carnival
UK has already spent millions
of pounds on marketing. Its TV
campaign in May, the second of
the year, cost £1 million.
Its bid to attract younger,
fi rst-time cruisers is thought to
be largely successful – the average
age on a summer Ocean
Village cruise from Palma is 46.
But brand experts are less
sure. PR Week editor Danny
Rogers said: “I would question
whether the central proposition
was right in the fi rst place.”
Dingle argued the slow
phasing out of the brand demonstrates
it still has value and
Carnival UK will be “as active
as ever” to promote the brand
in the peak January sales period.
“It will still operate for two
years. It will be put on the shelf
but I would not want anyone
else getting their hands on it.”
For more cruise news
go to www.travelweekly.
co.uk/cruise
Ocean Village
One and Two
will transfer
to P&O
Australia
before 2010
is out
RIVALS SET
TO GAIN NEW
CUSTOMERS
Rival cruiselines say the
phasing out of Ocean Village
will give them an opportunity
to gain extra customers.
The brand’s demise
comes as cruiselines openly
admit extreme trading
conditions in 2009.
Royal Caribbean UK and
Ireland vice-president and
managing director Robin
Shaw said: “The environment
[has become] dramatically
diff erent in the last few weeks
– the economic situation will
have an impact on business.
Capacity is fi xed and it’s
down to the cruise industry,
partners and the media to
convince guests of the value
of cruising. Clearly, with
Ocean Village, there will be
opportunities for upselling.”
TUI Travel director of
cruising David Selby said
Thomson Cruises would
look to sell to former Ocean
Village customers, while
Norwegian Cruise Line said
its freestyle dining concept
would appeal to them. UK
general manager Stephen
Park said: “There is an
opportunity to migrate people
up the cruising ladder.”
But Carnival UK is keen to
migrate customers to its own
sister brands. Chief executive
David Dingle said: “Ocean
Village prices are already
knocking on P&O Cruises
prices.”
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