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| Mark Conroy, president of Regent Seven Seas Cruises, aboard the Seven Seas Navigator. |
As Regent Seven Seas Cruises turns 20 this year, the luxury cruise line is enjoying record net yields and occupancy rates, according to its public earnings report for 2011.
That’s no easy feat in any economy, but considering the business landscape the travel industry has faced over the past four years, it’s impressive.
Leading the way for the line every year over the past two decades has been its president, Mark Conroy, who has shepherded the line through two Gulf Wars, a change in name and new ownership.
In fact, put the cruise line’s 20 years on rewind and it goes something like this: Diamond Cruises was launched in 1992 by the Carlson group, with the aim of having a cruise product for incentive sales. In 1995, Diamond Cruises merged with Seven Seas Cruise Line to become Radisson Seven Seas Cruises—part of the Carlson group. In 2006, the cruise line took on a more upscale moniker when Carlson renamed it Regent Seven Seas Cruises to align it with its luxury Regent Hotels business.
“Regent was a name nobody had to make excuses for,” Conroy tells Luxury Travel Advisor, noting that Radisson tended to make one think of four-star hotels, not a five-star cruise line. With Regent, the line also adopted a theme of “great anticipatory service; it was really a turning point in our business,” Conroy says.
In 2008, Prestige Cruise Holdings, which owns Oceania Cruises, purchased Regent Seven Seas and has since invested more than $100 million in Regent’s three current vessels, Seven Seas Mariner, Seven Seas Navigator and Seven Seas Voyager.
Conroy, during his tenure with the line, launched the all-balcony, all-suite concept for all three ships currently in the fleet. He also navigated it through a fully inclusive pricing strategy that first included an open-bar policy, gratuities, dining in specialty restaurants without surcharges, and most recently, complimentary shore excursions offered at each port. Air transportation and a stay in a luxury hotel prior to the cruise are now also part of the inclusive strategy.
“The idea of including the complimentary shore excursions is the game changer and I think it’s really set us apart,” says Conroy.
Few would argue that Conroy is a natural in every element of sailing and selling the high seas.
“I don’t know of another cruise line executive today who is as beloved by both his guests and his travel agent partners as Mark,” says Frank Del Rio, chairman and CEO of Prestige Cruise Holdings, RSSC’s owner. “Part of it comes from longevity. There aren’t many 20-year veteran presidents of cruise lines. Part of that also comes from his charisma and his sincere wish to deliver an outstanding product. He has a sincere desire to be an extraordinary partner to the agency community and they recognize that.”
A love of the sea did not draw Conroy to his cruise line career, which includes having served as president of Renaissance Cruises and Commodore Cruise Line and as vice president of sales for Royal Viking Line. In fact, the native of rural Wisconsin never saw the ocean until he was 16 years old. “The nearest town was miles away and had 300 people in it,” he recalls.
It was success on the football field that led him to the east coast, when he enrolled at the University of Miami. Wanting some pocket cash, he asked his brother-in-law who worked for Norwegian Cruise Line as an industrial engineer if the company had any part-time jobs. Conroy started with NCL laboring on the pier, but moved to an office position when he was offered the chance to type up the passenger manifests for the line. The typing part of the job didn’t go so well, but Conroy, within moments, devised a more efficient process to produce the passengers’ boarding documents. He moved the guest’s name and address to the upper-left-hand corner of the paper, making the mailing information easily readable through the window panel of an envelope.
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| Aboard the Navigator: Randall Soy, senior vice president of sales and Kari Tarnowski, senior vice president of marketing. |
A Symbiotic Relationship
Regent Seven Seas has a keen focus on the luxury travel advisor market with two senior executives devoting much of their time to help agents sell: Randall Soy, senior vice president of sales, and Kari Tarnowski, senior vice president of marketing. Together they and their teams work synergistically to ensure a consistent message is sent to consumers and the travel advisor community. They also strive to give advisors all the tools they need to sell RSSC.
“We’ve kept the message consistent: it’s simple and it’s bold in its delivery,” Tarnowski tells Luxury Travel Advisor, referring to RSSC’s “It’s all included” message, which calls attention to the line’s two-for-one fares; free air, unlimited shore excursions, pre-paid gratuities, alcoholic beverages and luxury hotel packages. “When we came out with the ‘most-inclusive luxury cruise experience’ about three years ago, we really focused on how we could add more to the product offering instead of just discounting the prices. It takes the stress off because the consumers are not calling the agent everyday asking if they’ve seen a lower price. It helps foster the trust between the consumer and the agent because the agent can feel confident in saying, ‘This is what you are getting, this is what Regent is offering you.’”
One of the tools the team is proudest of is the ability to shoot promotions and special offers from RSSC’s website out to the travel advisor, which they in turn can forward to their clients very easily.
Advisors are also supported via the Regent Seven Seas Cruises University course available on both Travel Agent University and Luxury Travel University, which are produced by Questex Media, the publishers of Luxury Travel Advisor. The program provides a thorough, detailed introduction to Regent Seven Seas Cruises, spelling out the line’s onboard accommodations, dining choices and activities, as well as the destination experiences available. The course also provides selling tips on upgrading premium cruise clients to RSSC’s luxury ships and taking advantage of niche and group sales opportunities. Rounding out the educational program are marketing tools and information on pricing and commissions.
Then, of course, there is the sales team to support the travel advisor community. It includes 15 sales directors calling on agencies across the country. “They are really business consultants more so than sales reps just dropping off brochures,” says Soy, who has been with the line for more than 20 years. “These are people who are really trying to understand what’s important to the agency owners; to find out what is good for their business and how we can work together.”
An inside team of account executives also supports the sales effort: Added more than a year ago is a group of business development managers that is working with agencies that would like to sell more of Regent Seven Seas. “We nurture them along and provide tools, support and training through weekly webinars and so forth,” says Soy, adding that a national accounts team manages the strong relationships with RSSC’s consortium partners.
Conroy quickly rose from ship reservations to the post of a ship supervisor, graduating along the way with degrees in business and in production control, which includes time and motion study. NCL then offered him a job selling incentive charters, launching a seven-year stint that ascended him to the role of director of passenger services, running inventory control, group sales and customer service. Conroy then left to join Royal Cruise Line as group sales manager and then as vice president of sales in San Francisco, a city he still holds dear to his heart. In 1987 he became president of Commodore Cruises; when the line was sold he left to launch Renaissance Cruises where he stayed for nearly four years before joining Carlson to launch Diamond Cruises.
To sustain his longevity as a cruise line executive, it’s clear Conroy had to be astute, flexible and diligent. We suspect as well that his natural warmth for his colleagues helps the cause, as does a passion for all things Regent Seven Seas.
In fact, when Luxury Travel Advisor arrived to meet with him for an early morning tour of the Seven Seas Navigator, which had just berthed at Port Everglades following a charter cruise to the Caribbean, Conroy was already onboard, meeting with a prospective client. “What better place to discuss a future cruise than on the ship?” he asked.
As we walked the Navigator together, it was vividly apparent that Conroy is intricately and passionately involved with every aspect of the ship's physical and human aspects, stopping frequently to greet employees on the ship. As we inspected the Navigator’s suites, crew members turning the ship over for a 10-day cruise to Bermuda readily knew him on sight and greeted him enthusiastically. The camaraderie on board is likely due to the longevity of most Regent Seven Seas employees; some of the crew dates back to the Diamond days.
Up on the bridge Conroy and Captain Ubaldo Armellino spoke fondly of the years they have worked together and after that he could not resist showing off one or two more premium suites to us, even though his schedule for the morning was chock-full; he was scheduled, among other things, to welcome a group brought on board by a travel advisor who was hosting a lunch and a silent auction to raise money for a local cause.
One can hardly fault Conroy for his pride in the line’s impressive series of premium suites. In fact, RSSC has added more amenities to those sailing in its concierge-level and above suites throughout the fleet. Clients now receive an upgraded pre-cruise hotel package; priority online reservations on free, unlimited shore excursions; priority online reservations in the specialty restaurants Prime 7 and Signatures; 15 minutes of free phone calls and 60 minutes of free Internet access per suite; 25 percent off on premium wine and liquor purchases; 10 percent off on pre- or post-cruise hotel or land packages; and 10 percent off on Regent Choice shore excursions. Suite perks include use of binoculars, a coffee brewer and a cashmere blanket. They also get a special gift from the cruise line.
RSSC is consistently spiking its value adds for its customers, but at the end of the day it’s a numbers game.
Luckily, the math part of the business is another aspect that Conroy is drawn to. He ably walked us through the pricing strategy for RSSC, which involves offering value additions such as free air or on-board ship credits early on in the booking cycle. As management observes how certain voyages are selling, it will decide to raise the rates on some, which is done by essentially reducing the previously offered discount.
“This allowed us to look an agent in the eye and it allowed the agent to look the consumer in the eye and say, ‘If you book Regent early, you are going to get the best price,” says Conroy. “The great news is the agency community got behind it and so did our consumers.”
RSSC also determined that “two-for-one” and free airfare resonated more clearly for its affluent clientele than “60 percent off” deals.
The strategy of including complimentary shore excursions was devised when the stock market collapse, spurred by the Lehman Brothers’ demise, stopped the overall luxury business dead in its tracks. RSSC executives in 2009 sat around a table pondering how to jump-start sales. Conroy says it was Del Rio, chairman of Prestige Holdings, who floated the idea of free shore excursions. (There is still a charge for a minority number of super-premium experiences.) They tried it on 19 cruises that January and by the end of the month those cruises were full.
The free shore excursion promotion was executed across all of RSSC’s voyages and the recession ended for the line by April 1, 2009. The move was a success because many of RSSC’s clients are past cruisers and recognized that they typically spent an additional $200 per person per day on shore excursions. An unexpected benefit, however, was that the travel advisor and the traveler became more engaged with one another during the entire booking process as they plotted out which shore excursions to select.
“We found that the sooner you can get the guest engaged in planning the trip, the less likely they are to cancel,” says Conroy, noting that a customer is less likely to cancel a trip that includes specific, tangible activities, such as dog sledding in Alaska.
That most of the guests on a 700-passenger ship are taking shore excursions also gives RSSC more buying power from the local land operators, who know they are going to fill their tours ahead of time.
RSSC also decided not to have a non-commissionable fee on the tours since it realized the advisors were going to have to do extra work to help plan the excursions.
The all-inclusive shore excursion feature enables travel advisors to up-sell existing clients who do not cruise in the luxury category.
“Throughout my career I’ve given speeches to agents who said they wished they had luxury customers and I’ve also answered, ‘You do, you just don’t know it,’ ” says Conroy.
Now, it’s just a matter of doing the math, he says. Looking at the basic cost of a premium cruise line vs. Regent Seven Seas, RSSC appears to charge more.
“But if the agent can point out how much the consumer is really going to spend on their cruise, chances are Regent will be comparably priced and in some cases even cheaper than the premium category,” says Conroy, noting that advisors will also make twice as much commission up front.
Although RSSC competes with Silversea, Crystal Cruises and Seabourn, its real focus isn’t on them, it’s on the premium-level lines.
“The pool of experienced cruisers is relatively small, so if we keep fighting over those same people, none of us are going to be successful. But the pool of experienced premium cruisers is so deep that we don’t have to get too many people to decide to change to make our business successful,” he says.
Getting back to those high occupancy rates and net yields (which is the rate of return on an investment after subtracting all expenses, such as commissions, costs of purchase and taxes) that we mentioned in the very beginning of this article, it may be time for a new ship for Regent Seven Seas.
“I tell everyone, we will order ships when I am confident that we can fill the ones we have,” Del Rio tells Luxury Travel Advisor. “If you look at the published reports, you will see that Regent’s occupancies are now in the low 90 percent area so we are getting close to the point where Regent warrants a new vessel. We think the Regent brand is performing exemplarily, and we’re thinking about it.”
Conroy calls Regent Seven Seas’ success a team effort. “We have longevity of staff and consistency. We have very little turnover. We also have a consistent message, which is what it’s about but it’s also about value at the end of the day,” he said.
From his present position of having been in executive leadership for several decades, Conroy still looks back at those early days with NCL fondly. He had been cautioned not to take the position because the guys who worked on the pier full time were pretty tough. But having learned to make his way around the football field among plenty of tough guys, Conroy survived quite nicely. In fact, he appears to recall those days that started him in his 30-year career as the beginning of something very, very good. “What a fun job this has been,” he says with a smile.
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| Penthouse Suites on the Seven Seas Voyager come with butler service. |
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| Horizon suites on the Seven Seas Mariner have just been redone. |
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| The Seven Seas Mariner has also just renovated its Master Suite, which spans 2,000 square feet. |
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| Prime 7 is one of Regent Seven Seas’ specialty restaurants; however, it does not charge an additional fee to dine there. |