By Larry and Adam Mogelonsky
Every hotel property aspires to be luxury in one way or another, even as the word ‘luxury’ has become a bit overused in the past decade. As such, there are always new entrants testing out concepts and evolving various features, amenities or service offerings, all in an attempt to get one step ahead of the curve. The pandemic has, of course, shifted priorities but the pursuit of luxury still remains as a means of capturing guests’ hearts.
Concurrent to this arms race amongst traditional hotels – and now also alternative accommodations – it is important that hospitality brands consider those accommodations not bound by land. Cruise lines are also evolving and diversifying in the wake of COVID-19, particularly as they try to cover as many traveler niches as possible, including several different types of luxury such as what’s addressed herein. As we all look to recover from this world-shaping crisis, hotels must take a more holistic approach in evaluating market forces and their competition.
This is one event from the antecovidian times that still has significance for hoteliers. Aggressively promoted through social media channels, the christening of the New Regent Seven Seas Splendor was an hour-plus YouTube segment dedicated to the company, its staff and the ship. Watching this unfold, we could not help wondering at the tremendous organization that unfolded to not only construct this vessel, but importantly the efforts required to bring this product into the marketplace.
While the coronavirus has cast a big question mark over its long-term success, what’s important to remember here is the larger trend – the expansion of the luxury cruise segment.
This being a hotel publication, you may wonder why we are lavishing so much attention on a product launch that is not a hotel property. Fact is, that as hoteliers, there is a great deal of learning that we can glean from this singular event, as well as from the cruise industry’s overall response to the pandemic. If you are managing or owning a luxury hotel or resort, this new ship and others like it will soon become a significant competitor; just think of it as 375 rooms added into your comp set.
The Seven Seas Splendor once again raises the bar on ‘accessible luxury’. By accessible, we mean prices that run at roughly $1,500 to $2,000 per night (meals included), which is a sweet spot for the luxury accommodation market segment. Of note, there is an even higher category of accommodations that we cheekily call ‘no-holds-barred-luxury’, such as a $5,000+ per night, multiple-bedroom villa-for-rent somewhere along the Mediterranean.
Consider for a moment, a comparison between an eight-day cruise and the same length of stay on a leisure holiday hypothetically in one, two or three different luxury properties. Let’s say your budget is $1,500 per day for a hotel including three meals, alcoholic beverages, gratuities and taxes.
These days, that is not really all that extravagant and probably not enough for five-star, land-based accommodations in Europe on an all-inclusive financial cost basis. Yet, that’s roughly the price range for a luxury, small boat tour (1,000pax or less). And remember the cruise makes it significantly easier on the traveler – unpacking only once and coordinating your needs with exemplary service, not to mention that this all-inclusive price may also comprise day excursions, entertainment, airfare and transfers.
Three Key Lessons
Rest assured that, for the decade ahead, this form of luxury is indeed a competitor to any traditional hotel that you must take into consideration when planning ahead. Here are three quick takeaways you can learn from this particular ship and other newer, luxury cruise liners of its ilk.
1. Don’t reinvent the wheel. The new Seven Seas Splendor is virtually identical in design to its sister ship, the Seven Seas Explorer, that launched some five years earlier (and a ship that Larry has journeyed upon). This made the new ship much more cost effective to design and faster to build. It also means that the staff familiar with one ship are almost effortlessly interchangeable, thereby reducing onboarding costs. From a marketing standpoint, it also means that guests of one ship will be eager to experiment with the new one once coronavirus fears have subsided.
2. Remember your target audience. Study trends in design but steer away from the cutting edge. Unlike many new hotel designs, this ship’s design elements are tasteful yet far from revolutionary. Often hoteliers seek to try ‘something completely new’ in design, perhaps to be provocative from a public relations standpoint. Yet in doing so, they forget that it is the guest that is the ultimate judge and jury. While now taking into account physical distancing measures, you should design appropriately if your core guest demographic is conservative and likely in the age range of 60 to 80 with a high net worth.
3. Lever your past guests from the entire chain to the new destination. You’re only new once, so make a big deal of it. As a past guest of a sister ship, not a week went by without an email bulletin on the progress and routing. We’ve all been quite good at communicating our updated health and safety policies throughout 2020, and that same level of efforts should be given to any new product launches in 2021. Such new property or program announcements are low hanging fruit for loyalty patronage. Wouldn’t a regular guest in one city opt for staying at the same hotel brand in another? Wouldn’t a loyal guest be keen for a return visit if you offer them exclusive or advanced access to a new onsite amenity? As a classic marketing tactic, look to drum up your base before attempting to reach wholly new audiences.
Many people are eagerly awaiting the day when they can get their vaccines then start cruising again, and therein lies tremendous learning opportunities for hotels on what products and services travelers really want. To the captain and crew of this new ship – and to the members of your hotel team – we wish you smooth sailing in 2021 and hopefully no rogue waves like what we endured last year.
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Editor’s note: To discuss business challenges or speaking engagements please contact Larry or Adam directly.