Among the three largest operators worldwide, Carnival earns
$31,181 per minute, while Royal Caribbean takes in $16,165 and NCL
Buoyed by massive superships that command a premium, operating
profit has nearly doubled in the past four years.
With each new vessel, the industry manages to absorb the new
inventory without having to reduce prices or sail with
lower-than-desired occupancy. Cruise lines have expertly navigated
these waters, welcoming
a record 27.2 million passengers in 2018.
Even so, there’s some choppy water on the horizon. With each
new supership – and the show-stopping new features geared towards
the “wow” factor – the industry dates itself. Existing ships
seem a little less shiny and a little less new.
This leaves older ships with a marketing dilemma:
- How to define the ship’s niche among cruise-going loyalists,
while also attracting new cruisers – all the while maintaining
occupancy and revenue targets?
- When should a ship be taken out of service for upgrades,
trading short-term revenue loss for long-term competitiveness and
Cruise lines must find a way to maintain existing business while
developing new revenue streams in parallel.
The reliance on physical space for revenue means that taking
that physical space out of service for upgrades and redesigns
presents a significant business risk. And you can hardly renovate
floor-by-floor while still welcoming guests, like a hotel.
To deliver a successful digital transformation, cruise lines
must expand revenue streams on existing ships by upgrading
technology and the passenger experience, all without pulling ships
Busting the billion-dollar myth of a costly digital transformation
From a digital concierge, mobile apps for guests, and full-ship
wifi, to crafting immersive virtual reality experiences, the
leading brands now differentiate the guest experience through
These initiatives have redefined the booking process, made
marketing more personalized, streamlined the boarding process, and
made it much easier for cruises to engage with passengers during
and after the trip by capturing real-time feedback.
Royal Caribbean is taking on this challenge by transforming the
once “off the grid” cruise vacation into a connected,
tech-enabled experience, according
As the cruise
boom continues into 2019, digital transformation is definitely
the need of the hour for cruise liners as it will help them in
delivering better customer experience leading to an increase in
Given the obvious complexity, digital transformations can be
intimidating. Most cruise lines have been reluctant to invest too
heavily in digital, making certain assumption about how digital
fits into the physical experience of a cruise ship. Let’s bust
Myth #1: My loyal fan base means that I don’t need to
consistently attract new customers
To expand the cruise audience to match the growth in new ships,
brands must prioritize marketing to the next-generation of
cruisers. Small, targeted campaigns can affordably drive
significant revenue from new segments.
For new cruisers, the marketing must first convince them to take
a cruise. Only once that decision is made does ship selection come
into play. Marketers should make a series of small bets to entice
To make these bets, RateGain
helps cruise lines leverage historical data, as well as
provide future forecasts from events and weather, to help revenue
managers make better predictions and identify demand from untapped
markets to target new audiences.
As mobile search increases, cruises need to be positioned
correctly across all channels, while also managing their reviews to
As per RateGain’s data science lab, more than 50% of people
read reviews on Google before making a decision on which travel
company to choose. For a more premium priced product like cruises,
these reviews really matter.
Cruises should also create the right forum for customers to
share their experiences on social media, as this word-of-mouth
marketing from cruise loyalists is free and immensely powerful
By tracking social media feedback through products
BrandGain, cruises can encourage passionate cruisers to share
their experiences and expose new segments to the pleasures of
Myth #2: Digital transformation must be a multi-year overhaul
While it’s true that the most effective and long-lasting
digital transformations require a company-wide effort, there are
small projects that any cruise brand can implement relatively
One example is part of Royal
Caribbean’s digital transformation. To help cruisers choose
excursions, as well as entice reluctant cruisers to purchase an
on-board excursion, the company has set up immersive virtual
reality experiences. These “try before you buy” experiences are
also available via its mobile app.
For functions such as revenue, social media marketing, rate
shopping, guest reputation, and data intelligence projects, new
technology and processes can be implemented within anywhere from a
week to within one year.
It all comes down to prioritizing specific outcomes, matching
the technology to the objective, creating a realistic timetable for
Myth #3: Emerging technologies are still not relevant for cruises
Cruises have a powerful ally when it comes to the utility of
machine learning and New Age data.
Across the cruise operation, there are many points where
capturing and analyzing large sets of data can deliver an improved
passenger experience, as well as a more profitable operation
overall through reduced costs and increased efficiency.
For example, Royal Caribbean already uses artificial
intelligence to suggest schedules and events personalized based on
passengers’ disclosed preferences.
This type of application is an efficient and impactful way to
deploy emerging technology to achieve a specific outcome: in this
case, a more personalized guest experience which translates into
greater satisfaction and more potential on-board revenues.
The ideal approach is to avoid getting overwhelmed by the big
picture and overspending on futuristic-but-unproven technology.
Successful digital transformations solve daily challenges that help
companies make faster and more accurate decisions.
Myth #4: Smaller cruise lines cannot match up to digital efforts of
major cruise lines
Smaller brands are well-positioned to thrive In the digital
space. With a more intimate connection with cruisers, small brands
can bring a personal touch that sets them apart.
When it comes to technology, it’s about translating this
personalized approach into the right digital tools. Smaller cruise
lines can work with SaaS partners to automate and transform their
middle and back-office operations.
These improvements increase staff productivity and reduce
customer acquisition costs through better intelligence, rate
distribution, and reputation management.
Another example of an achievable digital effort is rate
By tracking competitor rates through tools like RateGain Rate
Shopping, cruises can map each ship to craft apples-to-apples
product comparisons that help refine pricing strategy.
For these projects, look for straightforward implementations
that require less upfront effort yet deliver out-sized results.
Myth #5: Digital for cruise require substantial infrastructure
With the advent of cloud computing, most data now is stored in a
data lake. This centralized source substantially reduces cost and
time to market, especially for digital initiatives that focus on
increasing efficiency of marketing and pre-trip communications.
The time and cost savings free up smaller teams to focus on
specific audiences and channels to squeeze more demand from smaller
It all comes down to prioritizing the technologies that deliver
impact in the short-term, which then fuels greater long-term
investment as revenues grow, costs drop, and guest satisfaction
RateGain’s own data lake for cruises has data from cruise
lines all across the world consisting of historical competitive
prices, events, weather which cruise lines can leverage to build
applications on top of the data lake for faster insights.
The first steps in a digital transformation
Now that we’ve busted a few myths, here are the first steps to
take when starting on the digital transformation journey:
1. Identify bottlenecks : Qualify the key pain
point/performance indicator you want to improve for your cruise
line between attracting demand, customer experience, and overall
operations, and then break down the program into smaller
2. Know your cruiser : Prioritize external
data that influences your customer in the decision making journey.
Targeted marketing with personalized offers ensures a higher
conversion on marketing spend.
Knowing what customer is searching for and their preferences and
then targeting them with relevant offers and promotions will help
in getting higher RoI on marketing spend.
Capture the passion of cruise loyalists with strong loyalty
programs that use data and analytics to target repeat cruisers with
relevant offers at frequent intervals.
3. Identify digital opportunities: Don’t
rule out the need for new technologies to improve processes and get
better intelligence, such as targeting customers with relevant
on-board offers during pre-boarding.
Capture, store and analyze customer on-board data and connect it
with pre-board data to create micro-segments and finding segment
level patterns. Insights from segmentation can inform better
4. Leverage your data: Use New Age data for
better forecasting, planning, marketing, and pricing. By merging
historical booking and pricing data, along with holidays, weather,
competition, you get accurate forecasts to set optimal rates.
Choose a data partner with cruise expertise, like
RateGain, to track competition and respond quickly with
5. Focus on flexibility and scalability: Look
at a multi-vendor setup with the natural choice for specific
departments being SaaS-based quickly implementable solutions.
And don’t forget social: having the right social
media software for cruises ensures that customers are able tag
and post their pictures and write about their positive experience
in social media.
(first published in Phocuswire:
About the Author
Chief Revenue Officer – RateGain
Apurva Chamaria is the Chief Revenue Officer of RateGain. In his
current role, he leads sales, marketing, alliances and customer
success across the world.He was recognized by The Economic Times as
amongst the top 10 angel investors in India in 2017.He is also the
Best-Selling Author & a sought-after speaker and has
key-noted at TED x.
Busting a billion-dollar digital myth for cruise lines!
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Busting a billion-dollar digital myth for cruise lines!