Incentives at Sea
Published: May 2017
Insurance & Financial Meetings Management
By David Swanson
A sleek bow piercing the waves, a never-ending canvas of passing scenery and all the creature comforts of a traditional resort close at hand… Who doesn’t enjoy time spent aboard a cruise ship?
An improved economy combined with a steady supply of new and bigger ships is helping to fuel cruise industry growth. In May, Cruise Lines International Association (CLIA) announced that the number of cruisers in 2016 reached 24.7 million passengers, up almost 6.5 percent from 2015. CLIA is projecting a 4.5 percent increase for 2017.
This year alone, 13 new ocean cruise ships will debut, according to CLIA. Another 15 ships are under construction for 2018, while in 2019 we’ll see 20 launched. And already, 32 cruise ships are on order for 2020 and beyond, including the first vessel from Sir Richard Branson’s new line, Virgin Voyages.
Younger generations, including millennials and Generation X, are embracing the cruise vacation like never before, while the demand for expedition cruises continues unabated, reaching ever more adventurous and exotic ports.
“If you match the guests to the cruise line — even down to the specific ship within the fleet — you can create a great, inclusive incentive or meeting experience that appeals to many participants.”
— Jennifer Mazza
No wonder a growing number of companies are finding that corporate events and incentives at sea sometimes offer an edge over traditional land-based programs.
Cruise ships built over the last two decades have been plumped with conference and breakout rooms, along with state-of-the-art audio-visual equipment sufficient to hold meetings of various sizes, including trade shows. Incentive cruises can be terrific motivators for employees or clients, and a cruise-based meeting program has the benefit of controlling costs, in many instances reducing overall expenses against comparable land-based options.
Jennifer Mazza, director of travel operations for New Brunswick, New Jersey-based Next Level Performance, an organizational training, coaching and consulting firm, says cruises offer a number of advantages for groups.
“The all-inclusive nature of cruises is very appealing to the right audience. Because the product is already very packaged, costs and inclusions are highly predictable and can offer excellent value. Planning can be made somewhat simpler, with existing infrastructure in place for excursions in destinations where otherwise program guests might not be able to visit. With enough participants, many can be privatized.”
Mazza says that when Next Level Performance plans cruise incentives they often provide exclusive excursions or meals at each destination for VIP guests, organized with DMC partners to maximize the truly high-end, unique experiences clients expect.
“Another interesting advantage is the considerable marketing and advertising done by the cruise lines,” Mazza adds. “If the ship and the program audience are well-matched, program participants will frequently see communications and images of the cruise in day-to-day media. This awareness can drive engagement with the incentive program.
“On one of our programs, the cruise line selected was highly aspirational for the audience. It was also running a successful ad campaign with a tagline familiar to all. The ad campaign amplified our own communications and heightened excitement. The incentive program was very successful.”
While many groups take a block of cabins on a scheduled cruise — anywhere from a few dozen to a few hundred — others charter the whole ship. Mazza says that full-ship charters can be a tremendous value. “Especially if filling the whole ship and not just exterior cabins. Since it is also possible to adapt the itinerary and use all of the public space to suit the group, a charter provides a large group incentive planner with a lot of options.”
The range of cruise options available to suit groups of all sizes continues to diversify. On the horizon:
The last $2 billion vessels in Norwegian’s “Breakaway-Plus” class of 4,200-passenger ships will be delivered in 2018–19, while the line recently placed an order for four more ships to launch starting in 2022. The newer, unnamed class will be slightly smaller, carrying 3,300 passengers apiece.
In March, Celebrity Cruises unveiled its new “Edge Class” design, with four ships ordered that will debut starting in fall 2018. The 2,900-passenger vessels are slightly smaller than Celebrity’s groundbreaking “Solstice Class” line, and will have several innovative features, including a movable deck and cabins with balcony-like spaces that convert from outside to inside.
Seabourn Cruises follows up the well-received launch of Seabourn Encore with Seabourn Ovation, another 604-passenger ship for the luxury line launching next May.
MSC Cruises has two new ships out this year — both of them new classes. The 4,500-passenger MSC Mereviglia arrived in June, while 4,140-passenger MSC Seaside debuts in November. Both are targeted to the U.S. market and will sail out of Florida.
Holland America has a second and third ship in the “Pinnacle Class” series on order, following in the footsteps of Koningsdam, which launched in 2016.
Caribbean Still Tops
CLIA says the leading cruise destination remains the Caribbean, capturing more than a third of all passengers in 2016. The Mediterranean was next (18.3 percent) and the rest of Europe followed, with 11.1 percent. But one of the areas of the world seeing new growth is Asia, and cruise lines are not only dedicating ships to target the Asian market exclusively, but are increasing the number of cruises aimed at the English-speaking audience.
With its wealth of tantalizing, often exotic ports, Asia was the region Todd Zint, CMP, CMM, chose for an incentive program rewarding a top-producers group a few years ago. Zint is currently the director, corporate travel, meetings and events, for Omaha, Nebraska-based Mutual of Omaha. However, the incentive referenced by Zint in this story was arranged for a different insurance company.
“One of biggest challenges we have is that some agents or winners have been going on these trips for 20 or 30 years,” says Zint. Finding fresh new destinations that provide a wow factor is a recurring hurdle that high-end planners must confront. “We announce the trip, and they go on the internet and do a Google search. We then have to exceed their expectations.”
Zint’s insurance company chose Silversea Cruises for its program, chartering Silver Shadow, a 382-passenger ship built in 2000. With a crew of 302 and cabins starting at 287 sf — almost double the size of cabins on most mainstream ships — the popular cruise review website Cruise Critic calls Silver Shadow an “ultra-luxury ship for savvy travelers who enjoy big-time pampering.”
“Silversea runs parallel with hotels like Ritz-Carlton or Four Seasons,” Zint explains. “We wanted a high level of service and all-inclusive — we didn’t want our group to have to use their credit card. We wanted it to be as seamless and easy as possible — that any time of day they can order a latte or a Bloody Mary, and it’s taken care of. That also made it easier to manage our budget.” Zint says that doing his program at sea was also probably less expensive. “When you go to a land-based program you’re working with DMCs, you have transportation, everything is à la carte.”
Another benefit to doing a program at sea is that the host has a captive audience. “Everybody on the ship is your people,” says Zint. “You can create camaraderie, and cool pocket events to stimulate the exchange. If I could do a charter with friends rather than go to a Four Seasons, I would. Now, if you’re sharing a ship with leisure guests, that’s a different thing.”
To select a cruise line, a ship and the destination, Zint says he had to juggle several qualifiers, starting with the size of the group — 285 attendees, including home office staff. As each qualifier was added, the options narrowed. “The client wanted a charter, something in the luxury market, and then the destination and itinerary really narrowed it down.”
To help identify the ideal cruise line and destination and better define the parameters, Zint opted for a third-party broker who worked with Silversea to plot a nine-night itinerary from Singapore to Hong Kong.
“You need someone to partner with who really understands the demographics of your group, who can help you determine the goal and essence of the trip. A good partner or broker will take that information and recommend places in the world, and go out and find the right ship for you. As a meeting planner, it’s hard if you’ve never chartered a ship before. If you’ve never done a charter, you sit down with the hotel manager on the first day and they’ll say, you could have put the slide show on the TVs in their cabins, you could have used our tech people to run the event — it’s a laundry list of things you didn’t know to ask for. A broker will know what you can get and what to ask.”
But Zint says that even though a ship has a hotel manager, it’s a different operation than a hotel, and the more you can learn about the options — and limitations — ahead of time, the better.
“I flew down to Silversea’s home office in Fort Lauderdale and asked, how does it work? When you’re committed on that level, what should I know? They were really receptive, and the nice thing is, when you charter it you own it. All the spaces can be utilized — the puzzle room, the cigar room, every space can be turned into anything you like. We converted one space into a war room to deal with contingency plans. We used the dining room for a Texas hold ‘em tournament, and used the upper lounge for a jam session. They were extremely flexible.”
Zint says a ship-based program does have some limitations. “The ship is built more for leisure travelers, so everything is scaled down — the common areas are smaller. You can’t necessarily get everyone into the disco, so when you have a large group you have to split them up. And on a lot of ships the entertainment can be sub-par, though when you do a charter you have ability to bring on your own entertainment. So, we brought on our own speaker that talked about each port, and we brought on a full band that we used every night, along with a photographer. Photography is pretty big for corporate groups, and they don’t want photos of the group posing in black tie.”
For the port calls, Zint primarily relied on the cruise line’s preferred shore excursion operators. “We did due diligence on that, but in Vietnam you need to use their DMC. But we did do a hybrid approach for one evening event in Ho Chi Minh City. We held it in the home of a famous silk tycoon — a light party that incorporated a charitable event. It was for a foundation that supports underprivileged children in urban Vietnam, and the government used matching funds that helped build a kindergarten school.”
While Zint says that a primary reason a cruise worked well for his group was budget-related, the key advantage the cruise held over a land-based meeting was simple logistics for the guests. “It’s the ability to get settled into your cabin and go from Singapore to three different ports in Vietnam and then on to Hong Kong — seeing three different cultures without ever having to re-pack. That was the real advantage for the guests, and for the client.”
Call in the Experts
For the manager of meetings and events for a major insurance company, using cruise event specialist Landry & Kling for its annual incentive program in 2016 was essential to its program’s success.
“When we do a land program we use hotels like Four Seasons and Ritz-Carlton, so we wanted to identify a really deluxe cruise line,” the planner explains. “We also wanted to charter a ship that had the right fit in terms of size, and the right itinerary.” The insurance company needed to accommodate 600 couples, plus staff and vendors, and there are only a few upmarket cruise ships that can handle that size group. But, with Landry & Kling, the insurance company came up with a novel solution: to charter a slightly smaller ship than they required, but then split the group onto two back-to-back cruises. The ship that fit: Oceania’s Riviera.
Oceania Cruises caters to a growing market segment sandwiched between the luxury, all-inclusive ships of sister line Regent Seven Seas Cruises and the premium cruise lines, such as Celebrity. Launched in 2012, Oceania’s Riviera accommodates 1,250 passengers.
“The Riviera was a bit bigger than we needed to go with, but it turned out to be a nice size ship, and that capacity meant we got everyone into cabins with balconies. Plus, because they maintain the same size crew as with their public sailings, we had an excellent passenger-to-crew ratio. They happened to have eight days open between sailings out of Miami, so we were able to take this and do two four-night cruises with 300 couples each — one to San Juan, the other from San Juan back to Miami.
“We’ve worked with cruise lines directly in the past, but Landry & Kling made the process a lot easier,” he explains. “They have a single point person and, for every issue, they knew who we needed to track down at the cruise line. We met the ship’s hotel manager, and he was really good, but in terms of making the arrangements, the corporate people in Miami set everything up and put together the specs. The hotel director takes those plans and implements them, but it’s nice to get to know the people you’ll be working with on the ship, so we went on planning cruises. The first one was three years ahead, the second one was one year out, and then we did a third cruise 90 days out.”
By chartering, the group had the ability to set the schedule and itinerary. The ship had one sea day, a port stop in St. Thomas, and then docked at a “private island” off the Dominican Republic, Cayo Levantado, where they worked with a local DMC to organize a beach party. “Most importantly, we were able to design our evening functions, something we could never do if we hadn’t chartered the cruise. We put together our own unique programming. One night we did it outside on deck and brought in a band. They built a stage over the swimming pool, and we were able to use the entire outside deck. We could never do that on a shared ship.”
The ship’s showroom was large enough to accommodate all 600 guests for one meeting when couples were invited, and the group was able to organize a dine-around program on another night, utilizing all eight of Riviera’s restaurants. Although the ship provided everything the group needed for the meeting portion of the itinerary, instead of using existing entertainment they brought in their own.
“We wanted entertainment that would be more appealing to our demographics, which is younger than what Oceania usually has. Most of our people were age 35 to 50, so we upgraded the entertainment. Their technical rider required us to supplement what equipment the ship had, but we have our own production company for land programs.”
In the end, the insurance company was able to do the cruise for about the same price as they spend on a land program. “It was comparable to what we spend for four nights in Palm Beach or San Diego at a luxury hotel, and a bit less than we spend in Hawaii.”
Still, Mazza with Next Level Performance cautions that cruise meeting costs can be highly variable, depending on the departure port, the cruise line, the ship and whether the program is a full-ship charter or just a few cabins. “When weighing the costs, it’s important to consider who the guests will be,” suggests Mazza. “Are they well-traveled? What level of service are they accustomed to? This will drive the cruise line selection and will help to establish a fair cost comparison.”
Mazza also notes that it is important to set realistic expectations about what is possible.
“Working primarily with high-end resorts, incentive planners expect a high degree of flexibility and creativity from their hotel and DMC partners,” she says. “Meetings often require general sessions and considerable breakout space, and requirements can change from one day to the next. That is simply not possible aboard a ship. It can be challenging to adapt the space to the events, and there is no opportunity to go off property or make use of outdoor spaces, like beaches or lawns. If the program is not a full-ship charter, there will be strict limitations on when and what space can be made exclusive for the group.”
Mazza continues, “Partnership with a knowledgeable conference service manager or cruise line representative is essential. They know what works on board their ships and what flexibility will be allowed. A CSM who understands the special requirements and expectations of incentive programs is invaluable.”
It comes down to knowing your audience, as well as the cruise industry, says Mazza. “If you match the guests to the cruise line — even down to the specific ship within the fleet — you can create a great, inclusive incentive or meeting experience that appeals to many participants.”