Azamara Club Cruises Focuses on Exotic Destinations

Sun Sentinel

Cruise line changes its name, raises fares to include certain beverages and services

Mega cruise ships carrying thousands of passengers and offering extreme sports are all the rage, but they are not everyone's idea of a good time.

Some passengers are turned off by big ships. They have no interest in exploring crowded Caribbean ports, surfing on a Flow rider or dining at an all-you-can-eat buffet.

Azamara Club Cruises is the latest company to go after older, affluent travelers who favor exotic port destinations and require all of the comforts of a boutique hotel.

"When you're a small ship you can get to places the big ships can't go," Azamara CEO Larry Pimentel said.

Other cruise lines, including Oceania Cruises, Regent Seven Seas Cruises and Silversea Cruises specialize in small-ship cruising with a high level of service, including a butler who will cater to passengers' personal tastes.

Started in 2007, Azamara has two ships — the Journey and the Quest. In December, the company changed its name from Azamara Cruises to reflect the club-like atmosphere passengers will find onboard, Pimentel said.

The company's new direction hinges on what Pimentel calls "destination immersion."

"We're doing more overnights and longer stays," in ports of call, he said. Giving guests two, sometimes even three, consecutive days to tour cities will position Azamara to rival land-based tour companies, Pimentel added.

There's also an increased focus on offering tour excursions that passengers may not find on other lines, such as a Ferrari driving tour in Italy.

And starting next month, many amenities will be included within cruise fares, such as a lunch and dinner wine selection, in-cabin dining, gratuities, and shuttle buses to city centers in port.

Cruise fares average about $250 per person per day, with most itineraries ranging from seven to 14 nights.

To adjust for the now-included products and services, Pimentel said the company raised cruise fares about 24 percent over a 12-week period, a move met with criticism from some passengers and travel agents.

"The new price increases do not equate with the extras offered," said a CruiseCritic.com member, known as frontrow487, on an Internet message board. "We feel priced out and wish you had kept the status quo."

Pimentel responded to the complaint during a recent Question and Answer forum he hosted on CruiseCritic.com, a website for passengers, saying, "We regularly look at the pricing offered by our competitive set, and think Azamara Club Cruises represents an excellent value, which we find vital to retaining our valued guests."

Azamara Cruise Lines differs from some of its established competitors. It has fewer ships in its fleet. In many cases, rival lines visit more obscure ports of call and offer world cruise itineraries that give passengers the option of sailing for months at a time.

Pimentel says there's enough room in the small-ship market for one more. "We don't all go to the same destinations at the same time," he said.

What makes Azamara different, he says, is that "It's a little bit of a secret, and it's a newer line."

Royal Caribbean: Promising Start to 'Wave Season'

The Wall Street Journal

It appears Royal Caribbean Cruises Ltd. (RCL) sees calmer water ahead.

"Wave season is off to a promising start," Chief Executive Richard Fain said Thursday in a conference call with analysts. Wave season, which typically runs from January through March, is prime time for consumers-- stuck inside during winter--to start booking their cruise vacations.

Royal Caribbean said since the beginning of September, new bookings have been running about 30% higher than the same period a year ago. The company added current price levels are also ahead of the same time last year across the majority of its product groups. Echoing predictions of several industry watchers, the cruise operator expects European bookings to generally be a growth area for 2010.

Shares of the cruise company received a jolt after the company posted a surprise fourth-quarter profit and projected first-quarter earnings well ahead of analysts' expectations. Shares were recently up about 1.6% to $25.84. The stock has nearly tripled in the past year.

For the first quarter, Royal Caribbean expects earnings of 25 cents to 30 cents, while analysts polled by Thomson Reuters, on average, projected 3 cents. Profit for all of 2010 is pegged at $2 to $2.20, including 39 cents related to a legal settlement, while analysts forecast $1.48. Analysts' estimates typically exclude items.

The second-largest cruise-ship operator by market share, behind Carnival Cruises (CCL), said it continued to see improvements in the booking environment and expects net yields to rise about 2% in the current quarter, and by 3% to 6% this year, in contrast to last year's sinking yields that were hurt by lower pricing and promotions. Meanwhile, the decline in net yields has slowed, with Royal Caribbean expecting an upturn in the current quarter and year.

Royal Caribbean--whose brands include Celebrity, Pullmantur and Azamara Cruise Lines -- reported a profit of $3.4 million, or 2 cents a share, compared with $1.5 million, or 1 cent, a year earlier. The company in November expected a 5-cent loss, a bit wider than analysts expected at the time.

Revenue was flat at $1.5 billion, while the number of passengers carried rose 9.5%. Analysts polled by Thomson Reuters most recently expected $1.44 billion.

Net yields, or revenue per available passenger cruise days, fell 7.2%, at the upper end of company expectations. Strength in both ticket and onboard revenue helped boost net yields from the previous quarter. Net cruise costs fell 10.5%.

Addressing some of the negative publicity surrounding its decision to return its ships to its Labadee, Haiti port immediately after getting clearance, Fain said the company "agonized over the idea of the people taking their holiday so near the devastation."

"In the end, we decided that the moral imperative demanded that we bring the people of Haiti much-needed relief supplies and equally needed tourist and economic activity from Caribbean cruises."

Bernstein Research analyst Janet Brashear wrote in a note that the "litmus test" for the company's decision from a business perspective will be Royal Caribbean's brand image with customers and their willingness to return to cruising in the Caribbean and Haiti. "So far, there appears to be very little impact," she wrote.

Royal Caribbean Cruises launched the world's largest passenger ship, the Oasis of the Seas, with a capacity of 5,400 guests last month, despite the weak economy. Fain said Oasis, along with its Solstice-class vessels, are generating "very healthy returns."

Azamara Cruises To Be Reborn As Azamara Club Cruises

USA Today

The recently appointed CEO of Azamara Cruises today announced some big changes for the line, including a new name: Azamara Club Cruises.

In a teleconference with cruise writers, Azamara President and CEO Larry Pimentel said the already upscale brand would become more all-inclusive with everything from wine with dinner to gratuities included in the price of voyages.

Pimentel also said the line will focus much more on the destinations its two ships visit by adding longer port calls and more overnight stays to itineraries.

"We are slowing down the ships rather significantly," says Pimentel, a well-known cruise industry veteran who took over Azamara in July after running SeaDream Yacht Club -- a boutique line known for leisurely paced, port-intensive itineraries. 

Pimentel says the changes will coincide with a notable increase in prices for Azamara's voyages, which he argues have been far too low given the quality of the product.

"Rates already have come up about 20% (in recent weeks), and they will be coming up a lot more," Pimentel told cruise writers, noting the line planned a big price increase to take effect on Dec. 14.

“We’re going to ... allow our guests to not just see the destination, but to live it,” says Pimentel. “Consider destinations like St. Tropez or St. Petersburg, Russia. If you’ve experienced them only by day, you haven’t really experienced them. With Azamara, through more overnight stays and late-night stays, you can.” 

Owned by industry giant Royal Caribbean Cruises, Azamara has struggled to gain traction since it was launched in 2007 as a "deluxe" line designed as a step up from sister brand Celebrity Cruises. The line operates just two 694-passenger ships that formerly belonged to the now defunct Renaissance Cruises, and it's still a relatively unknown quantity to many vacationers. 

Pimentel, who also has served as CEO of Cunard Line and The Yachts of Seabourn Cruises says he spent weeks talking with travel agents, past passengers and cruise writers about how to take the line to a new level and has come up with a new focus for the brand based on four pillars: Destination immersion; extraordinary service; cuisine and wine; and wellness and vigor.

Pimental, notably, also has been allowed to hire his own dedicated management team for the brand, which until now was run on the side by executives at the much larger Celebrity. 

"We have been looking at everything you could possibly imagine (to change), and we are in a very fast-paced mode," Pimentel says of the new team. 

Many of the changes Pimentel announced, including some itinerary changes, will be in effect by April, he says. April also will mark the beginning of included-in-the-price wine being served at lunch and dinner.

Among other items the line will begin including in the price are specialty coffees, sodas and bottled water; self-service laundry machines; and shuttles in port towns -- a nod, says Pimentel, to feedback from customers who have said they don't want to be nickel-and-dimed on a high-end ship.

Pimentel says that by slowing down the ships and spending more time in each port the line will be able to carve out niche cruises offering a more in-depth experience than others. As part of the new focus on ports, the line will be launching more elaborate shore excursions, including two-day packages tailored to overnight calls in places such as Dubrovnik, Croatia and Sorrento, Italy.

“We’re going to ... allow our guests to not just see the destination, but to live it,” says Pimentel. “Consider destinations like St. Tropez or St. Petersburg, Russia. If you’ve experienced them only by day, you haven’t really experienced them. With Azamara Cruise Lines, through more overnight stays and late-night stays, you can.”

Among multi-day packages Pimentel says the line is adding are an overnight tour from Hiroshima to Osaka via bullet train; a three-night experience from Mumbai that includes a visit to the Taj Mahal; and a Grand Egypt tour featuring both the ruins of Luxor and Cairo.

Other unusual themed cruises the line announced today include a Ferrari driving tour in Civitavecchia, Italy; an “In the steps of The Beatles” tour in Liverpool; and an Imperial Russian Court evening at Tsarskoye Selo in St. Petersburg.

As for service, Pimentel says Azamara will be retraining its on-board suite butlers to be true English-style butlers who will "offer that fine balance of anticipatory, pampering, yet non-intrusive service to guests."

Azamara executives also announced the line will launch a loyalty program, “Le Club Voyage,” with specific features and benefits yet to be announced.