NOWTHAT the acrimonious battle to acquire Norwegian Cruise Line is over, the wider consequences for the cruising industry are gradually emerging.
After each making their own separate bids for NCL, Singapore-based Star Cruises and US cruising giant Carnival Corporation finally came together to launch a successful joint bid for the cruiseline (Travel Weekly February 7).
Under the terms of the deal, Star Cruise will hold 60% of the shares and be in charge of running the company, while Carnival will take a 40% stake. The companies have also agreed to look at ways to cross-promote their products in each other’s markets.
The first actions of the new joint venture were to sack the old NCL board – hardly surprising given the amount of mudslinging it engaged in with Star during the takeover saga – and to get new president and chief executive Colin Veitch firmly ensconced at NCL’s Florida office.
Notwithstanding this ruthless culling of top management, the immediate outlook for NCL is relatively positive. It has two financially secure new owners and Star has already announced its intention to make a significant investment in expanding NCL’s eight-strong fleet.
At present the cruiseline only has one ship on order, a sister ship to the newly launched Norwegian Sky that is due for delivery next year. This is pretty conservative compared to the lengthy order books of the cruiseline’s main competitors.
However, Star is still being pretty cagey about revealing its other plans for the company.
Star, NCL and Carnival all have their own UK offices and staff and it is unclear what restructuring, if any, might take place in this country.
An industry source said: “Veitch is now in the US office talking with all of NCL’s department heads. People are waiting to hear the outcome of those discussions.”
He thinks it is possible that NCL’s London base and Star’s office in Crawley might merge, but believes it unlikely that any future shake-up will involve the Carnival team.
As for the rest of the cruising industry, the creation of a Carnival/Star axis has unsettling and unforseeable implications. This is the first time there has been a global alliance on the airline business model in the cruising industry.
It will give Carnival the chance to conquer the Far East – where it has been unable to gain a foothold to date – and allow Star to increase its representation in the North American and European markets.
A Carnival spokesman said: “There are cross-marketing opportunities. That’s been discussed and they will be exploited, but there have been no definite decisions made.
“Among all of our brands, there has been very little marketing done in Asia. Star is dominant in that marketplace and it is a market we have interest in.”
There are already rumours of moves to involve Star and NCL in a Carnival initiative to promote its stable of brands under the tagline ‘the world’s leading cruiselines’.
This may involve introducing a loyalty scheme across all Carnival companies, and cross-promoting the brands on the back of brochures.
The other leading cruiselines are unlikely to react to the Star-Carnival tie-up by rushing out and putting together their own airline-style global alliances tomorrow.
For one thing, nearly all cruiselines compete far too heavily in one geographical region – the Caribbean – to make co-operation that desirable. And for another, cruiselines’ technology systems are relatively backward and it would be hard to make them compatible enough to help each other take bookings.
Nevertheless, it has given the top players something to think about. And they are certain to be keeping a wary eye on the potentially formidable Star-Carnival partnership in the future.