Seabourn and “The Thinning of the Herd”

Right up front: A very minor trade paper has spun a rumor that Seabourn and Cunard may be for sale. According to an extremely well-placed source there is no truth to this. If you were to head over to the rumor-monger, “Trade Winds” you can only read the headline and this sentence, “Carnival has denied talk of a sale, which sources say is being prompted by ageing customer demographics and a need to generate higher returns”…and then it requires you to pay at least $1,500 to read the full story. And, of course, this rumor has not been picked up and verified by any other outlet.

What this single sentence and play for expensive subscriptions left out is that Seabourn has a well-off demographic of motivated-to-travel guests and one of the youngest fleets in the industry and, further, that Cunard also has a young fleet with a significant portion of its clients being upper-middle-class and above.

Based upon Goldring Travel’s experience in this COVID-19 world, over 80% of its Seabourn clients have rebooked for 2021..and quite a few are holding on to hope for sailing in November and December 2020…and have also booked for 2021. I also have had some nice bookings with Cunard. The Seabourn and Cunard demographics still have money and time…and a real urge to get back to traveling the world! (And, to be sure, Silversea, Regent Seven Seas and Crystal Cruises are all in the same ‘er um boat.)

But what clearly has led to this is what can only be called “The Thinning of the Herd” of the cruise industry. And, for me, it is a good thing. I have expressed my concerns over the past years that the cruise industry has been building too many new ships and diluting the market to such an extent that there has been too much focus on “putting heads in beds” rather than improving the quality of the cruise experience and the providing of a consistent experience.

I believe the basis of the rumor is the significant reduction of the Holland America fleet, with it off-loading by sale or scrapping four old ships, as well as some of the ancient Carnival Cruise Line ships. Seabourn and Holland America share certain back-office operations…and both of them share certain aspects with Princess as well. So you can readily see the “If A I wonder about B” becoming a rumor.

Personally, I was glad to see Holland American off-load those ships for a few reasons. First, the message at Holland America has been mixed and confuse or years. And, yes, I had “discussions” with Rick Meadows when he took over as Seabourn’s president that I hoped he would not do to Seabourn what he had been doing at HAL, to wit: Providing different experiences on different ships while marketing to a narrow client-base that could not sustain a modern cruise line. Fortunately, that didn’t happen at Seabourn. In fact, Seabourn’s client-base has widened over the years with more active experiences combined with the classic ones eventually evolving into the sale of the triplets to Windstar and the construction of new, consistent if not identical, ships and eventually the evolution into the Seabourn Venture and the Expedition programs. (Antarctica anyone?)

Meanwhile, at Holland America it was building new ships with more “youthful” venues such as the great B.B. King Blues Club (still not focused on reaching out to a significantly younger audience) while maintaining near ancient ones. Holland America, to my mind, while building more modern, still focused on providing modestly priced cruises to older/elderly people on older/ancient ships; thus undercutting any possible real penetration into younger and more affluent markets. With the old and ancient designed ships gone and the more modern HAL being a consistent product I see some real progress and positivity.

I have sailed on the newly gone circa 1993 Maasdam and it was my worst cruise (not just my least favorite). The ship was, at best, sad and the product was, at best, frustrating. It had no balconies. It had small staterooms. It had public spaces that were inward-looking and, thus, dark. It had a segmented, crowded, layout. The 1996 Veendam was not much better, as my ship inspection after her refit a few years ago disclosed. I was, in fact, frustrated that these ships still were sailing. But they had a loyal, if not economically vital, following.

And there were very strong hints that the Amsterdam, launched in 2002, was going to be offloaded. Really? I say, “Duh.” Recently launched was the Niew Amsterdam! If you didn’t see that message…

The ships that Carnival Cruise Line (as opposed to the parent company) rid itself of were also old, tired, and not really moneymakers. Same for the quarter-century old (circa 1996) Costa Victoria and circa 2002 P&O’s Oceana.

My travel writer friend, Gene Sloan, wrote he was saddened by Royal Caribbean offloading the Sovereign of the Seas. I understand Gene’s romance, but if you are not one who has been cruising since its infancy (my first cruise was on Royal Caribbean’s first ship, Song of Norway) you would look at the ship, both outside and in, and find it’s design antithetical to what you now know to be what a cruise is about…and even more inconsistent with what Royal Caribbean makes its money on: The Show!

So why is all this happening now? And why is it happening in the lower to mid tier cruise lines? To me the answer is pretty obvious. In those markets the vast majority of the passengers are still of working age. Though the upper income guests may still be working, these folks are more subject to layoffs and furloughs and business closings. Most also do not have stock market portfolios to support their travel, but rather – if they have one – focused on growth that is eyed toward planning for retirement or college; not leisure. So they save up for their cruise or they put it on credit cards to be paid off. But with the weak economy, coupled with the above, they just are not in a position to travel in the near future.

So while the passengers for this large market struggle with uncertainty and a significant reduction in their disposable income in the short-term, what exactly are the cruise lines supposed to do with its excess inventory of ships; ships that haven’t been huge money-makers in recent years anyway? Hence the days of “We got ’em so let’s sail ’em and make a little money” have turned to “We ain’t gunna make money sitting with these ships empty, so why keep them as they suck money out of our coffers when they have no real prospect of ever being truly profitable again?”

And, of course, there is this: While it seems like COVID-19 will never go away (WEAR YOUR MASK regardless of your politics!!!) it will eventually either be eradicated or brought significantly under control through antivirals and vaccines…and responsible public conduct. A more normal life will return. And, as a huge portion of the world’s economy (and mental well-being) is dependent on international travel, that too will return!

The last seven months (though it took two of those months to get the United States doing anything significant) have been exhausting and makes it seem like years with no prospect of normalcy. But it has “only” been months. Perspective and realism, rather than the overwhelming emotions that have been omnipresent these months, will return, if they have not already.

As I said to a friend yesterday on a totally different subject, “Who I am today is far more important then who and where I have been.” We will learn and grow from this, but we have a future…and good future…and we all look forward to saying, “Remember when…?”

Let’s focus more on facts, not rumors and perspective, not emotions.

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