Does the Royal Caribbean-Silversea match mark a sea change for the luxury cruise segment? Or, is it simply business as usual?
As TravelPulse reported yesterday, Royal Caribbean Cruises Ltd. (“RCL”) has closed on its purchase of a two-thirds stake in Silversea. Manfredi Lefebvre d’Ovidio retains a 33.3 percent stake and the title of Silversea executive chairman. Also announced yesterday is a multi-year, energized enhancement initiative, called Project Invictus.
We’ve reached out to some prominent luxury cruise sellers for reaction to the Silversea acquisition.
Eric Maryanov, president of All-Travel in Los Angeles, Calif., said clients have certainly taken note of the news.
“There has been client questioning about it since the announcement first came out. But, we’ve had no talk of cancellations. No slowdown in the booking process,” said Maryanov.
How is he addressing client concerns about Silversea joining the RCL lineup?
“I feel the proof is in the delivery. I’ve got confidence in Royal Caribbean. I’m sure they will invest to improve upon the Silversea product and bring it every further along.
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The fact that Royal Caribbean has thus far kept very separate brand identities is another good sign. Silversea is a solid brand, and it adds to the Royal Caribbean portfolio, especially in the luxury exploration segment,” said Maryanov.
He notes that the continued presence of Lefebvre is a key reassuring factor.
“He’s sold a controlling interest in his company, but still holds a large stake in it. His continued engagement and vision for the company is a big positive,” added Maryanov.
Steve Shulem, owner of Strictly Vacations in Santa Barbara, Calif., also strikes an optimistic note.
“Royal Caribbean and Celebrity know how to wow people with their ships. They know what they are doing. So, I am super excited about the Project Invictus,” he said.
Shulem, a luxury cruise specialist, agreed with Maryanov about the importance of maintaining Silversea’s separate identity.
“Royal Caribbean would be smart to keep Silversea their own brand. Many people don’t realize that Seabourn is owned by Carnival. With the new Crystal Endeavor coming out and Edie Rodriguez at Ponant, this niche segment is really going to heat up,” he noted.
Not everyone sees smooth sailing ahead. Tom Baker, president of CruiseCenter in Houston, Tex., is one example.
“I am concerned. Royal Caribbean does not even get its own product. Celebrity and Azamara are not luxury. This worries me, as I think it will become lost in translation as to what Royal Caribbean thinks is luxury. I think most luxury sellers were dubious on Silversea anyway and this new change spells more of the same corporate culture of appeasing shareholders with profit while watering down product delivery,” said Baker.
By contrast, Gary Pollard, president and CEO of Ambassador Tours in San Francisco, Calif., thinks Royal Caribbean has got its corporate strategy game on.
“Royal Caribbean knows how to manage multiple products successfully. They have the wherewithal to take a product and not ruin it. I have faith that this is going to work. But, they have to think like venture capitalists. Give Silversea money. Allow them to have greater appeal, especially in the expedition market that everyone is so hot and heavy for. Let Silversea go out there to compete with Ponant, Seabourn and the others entering that market,” said Pollard.
He does caution that Royal Caribbean’s Azamara brand may get lost in the shuffle.
“Azamara has a following. They have smaller ships, older ships. But, they have to be careful now how they’re positioning the Azamara niche. Is it overnights in ports? Everyone is doing that now. Silversea has a much stronger name in the market. They were for a long time the epitome of luxury,” said Pollard.
Ashley Hunter, Vice President of Business Development for Avoya Travel sees the Royal Caribbean-Silversea match up as a win-win for agents.
“Overall, this will benefit the travel agent community. Royal Caribbean has always been incredibly supportive. Silversea has recently come up with new programs to benefit agents, as well. So, we’re very excited about this news and applaud it,” said Hunter.
She added:
“I think Royal Caribbean will take the innovative and progressive ideas they’re known for and add some of that flair to the Silversea product. It’s always wonderful to have fresh ideas and new ways of doing things.”
