Luxury travel leader Crystal Cruises recently announced a billion-dollar plan to embark on the largest expansion in its 25-year history. Here, CEO Edie Rodriguez reveals her strategy to conquer luxury over land, sea and air.
A couple of months ago, Crystal Cruises announced the most significant brand expansion in the history of luxury travel and hospitality – capping off its 25-year anniversary with an ambitious new goal to conquer the seven seas, land, and air.
The aggressive expansion, announced this July by Crystal’s President & CEO, Edie Rodriguez and its new Chairman Tan Sri Lim Kok Thay, will see the traditionally two-ship strong brand introduce a suite of new vessels over the next three years, as well as its own Boeing 787 Dreamliner aircraft to better cater to affluent travellers.
The billion-dollar move will also effectively see Crystal Cruises establishing three brand new classes of cruising to forge its way into river cruising, yacht cruising and its own private jet tours.
In addition to its new and vast route, Crystal will also sell 144 multi-million dollar condos on its new oceangoing ships and continue catering to customers via customized land tours and activities across all its luxury port stops.
Yet, while some might label the expansion ambitious, Crystal’s woman at the helm says it was always in her sights.
“Now we have a new owner who is willing to invest the billions of dollars it will take to bring the vision I had from day one alive. When I started and I said seven ships for seven seas – but I didn’t divulge at that time what I meant, because I didn’t want to give away my strategy until I knew we were ready to implement it.”
As an industry veteran with almost 34 years of experience in the travel sector, Rodriguez is also well placed to take charge of the expansive roll-out.
She joined Crystal Cruises in October 2013 from a post as senior vice president of sales & marketing at RCCL’s Azamara Club Cruises, with years of senior leadership positions at Carnival Corporation’s Carnival Cruise Lines, Cunard and Seabourn, as well as travel technology provider Amadeus IT Group SA, behind her.
Something Rodriguez has learnt in those years it seems, is to keep people guessing until ‘go time’ – but now, as she prepares to take Crystal Cruises on its most enterprising journey yet, she opens up about what’s next on the horizon.
“ What Louis Vuitton and Hermes are to fashion, is what Crystal is to the global travel industry ”
The expansion plans for the Crystal Cruises business are set to kick-off at the end of this year – tell me a bit about that – is it a big departure from the current size of the business and target markets that you have focused on up until now?
Sure. Well, Crystal Cruises today has two vessels. We have Serenity and Symphony. Each hosts about a 1000 guests. We have about 200 employees land based and about 1200 at sea. Then we operate around the world from sales perspective with GSA so we have several more people around the world that are our GSAs, our general sales agents. That’s how Crystal Cruises is structured today.
Our two gorgeous award-winning vessels having won 20 out of 20 years Travel Leisure World’s Best, among other awards, so it’s quite a stellar record. Nobody else, not only in the cruise industry, nobody in the hospitality industry has those kinds of records. We’re very proud of those records, but our two gorgeous vessels today go all over the world. We have voyages from five nights to 128 nights around the world journeys. That’s Crystal Cruises today. Of course, December 23rd, we are launching the Crystal Esprit, our yacht, and the first of many brand extension experiences.
“ Our chairman was the genius who brought up the Dreamliner ”
Tell me a bit about those brand extensions. Why have you decided to go into other areas and how is that going to affect the business going forward and your target market as well?
Well, first why did we do this? Because it’s a 25-year-old brand, we just celebrated our 25th anniversary. We have luxury brand equity like no other brand in the hospitality industry. I would say what Louis Vuitton and Hermes are to fashion, is what Crystal is, vis-a-vis, luxury to the global travel industry. We would be remiss as a company to not harness the power of that brand equity.
Now we have a new owner who is willing to invest the billions of dollars it will take to bring the vision I had from day one alive. When I started and I said seven ships for seven seas, I didn’t divulge at that time what I meant, because I didn’t want to give away my strategy until I knew we were ready to implement it, but really it was all types of water I was referring to.
Then, of course, our chairman was the genius who said, what about the air too, and brought up the Dreamliner. It made perfect sense because we read every survey from our guests. Our guests are telling us they love the Crystal experience so much that they would love to experience Crystal in other forms of vacation. Our research and our data was very clear. Now that we have a very bullish owner with money to invest, we are ready, willing, and able to do that.
Crystal Cruises, Symphony
You recently came under new ownership, how did that come into play and how has it helped to bring this concept to fruition?
Yes, that happened May 15, and basically, our founding owner, NYK – a Japanese cargo container ship company – simply decided to divest out of anything that wasn’t its core business. When they did that there was a very aggressive bidding war for Crystal, and Genting Hong Kong was the winning bidder.
They’re publicly traded on the Hong Kong exchange and they’re in gaming hospitality, hotels; and Tan Sri Lim Kok Thay, who is the chairman and my boss, he’s visionary. I remember saying to him when he was in the running, I said: “Please don’t buy us unless you truly are going to invest the billions it’s going to take to take this brand forward”. And he did it, he’s investing the billions.
“ The Crystal experience is based on six star service, which is an enhancement that’s very hard to deliver ”
Do you foresee any challenges in moving into these new sectors of luxury travel? Because, obviously you’ve built up 25 years of experience and strong branding around Crystal Cruises, but aviation, for example, being an entirely new sector, what’s the strategy?
I think there are always challenges with growth. One of the key elements, though, is that I have a very strong participation style in management. I have a wonderful executive team and I believe it starts with people. I have put together a team and I believe it’s the right team to carry this vision forward and implement it. But, of course, there are always challenges; and the Crystal experience is based on six star service, which is an enhancement that’s very hard to deliver, but I will tell you that the right team on board we will deliver this.
So, of course there are going to be hurdles, but we plan to proactively address them. In this whole process, what I say to every member of my team – on land, and at sea, is we must never take our eye off the core ball.
Meaning, Symphony and Serenity which are our foundation. Because so often, there are times when a company is growing, and growing rapidly, they lose sight of what brought them to the opportunity for growth in the first place. In this case that’s Crystal Cruises core brand, that’s Symphony and Serenity. I want those two ships to continue to outscore even their own steller records, and that’s what they’re doing.
“ I think I relate very well to our client and, particularly, the typical decision maker in our client base ”
Luxury travel is quite a competitive industry though, so how do you stay a step ahead, in three different sectors?
This is how I look at it, this is my vision for the future going forward, I am an avid reader and researcher. By the way I am also a luxury consumer. I would be the client for any one of these brands extensions, and travel is my passion. I always use myself as an example as well, because I’m a 53-year-old female. The females generally make the buying decision for the vacation experience, or family holiday experience.
So, I think I relate very, very well to our client and, particularly, the typical decision maker in our client base. Having said that, what I would tell you is I coined this sort of three character acronym called ECO. Everything we do at Crystal Cruises will be built around a platform of ECO. That means, exclusivity, customization, and option. That’s going to be the key nucleus for us going forward, because that’s what a global luxury consumer wants today.
On that point of global luxury consumers – the traditional profile of these consumers is changing, they are more mobile, the millennials are also flexing their buying power – how do you choose your target consumer and capture them?
Well I think Crystal Cruises has evolved through the years. What I mean by that, if you look at Crystal Cruises when Crystal started. When Crystal started our voyages were typically 12 to 14 nights, this was 25 years ago. They had black tux required two times per voyage. We were not an all inclusive brand experience. Just like a country club consumer evolved, Crystal Cruises has evolved. Today, to cast a wider net, we have five night voyages, so people can sample Crystal. We are an all inclusive brand experience, with liquor included and gratuity.
We have a country club casual style dress. Of course we still have some black tie optional nights, but if somebody doesn’t want to be in black tie, that’s okay. Just as Crystal Cruises has evolved with it, as a leader in luxury consumer. We will continue to do that.
“ The bigger picture is that Crystal and all its brand extensions is what I call an international brand experience ”
Who is our target audience today? Well, we have a myriad of different sectors of demographic and psychgraphics. But, as an example, on a transatlantic sailing it might skew to an older demographic. On a seven night Mediterranean sailing we typically have the average age is 45 years old, and in summer months, up to 200 kids onboard. So, it varies.
But, going forward we want a global luxury consumer. My mindset is that today 50 is the new 30, today 60 is the new 35, etc. It’s a global luxury consumer. That could be somebody from a 25-year-old Silicon Valley billionaire who wants to go on Crystal Esprit to experience wider and submarine and the Seadoos, and right up to along side him could be a 70-year-old active guest who’s young at heart, so we’re looking at the international luxury consumer from any age.
Multi-generation as well, because we also see families travelling together. In fact, our beautiful Esprit was just chartered by a family. So they often take their family and friends with, and you see mixed generations traveling on that same charter experience.
But the bigger picture is that Crystal and all of Crystal’s brand extensions is what I call an international brand experience. That means it’s a global luxury consumer that is comfortable with English as their first or second language.
“ We have loyal society members that are very loyal to us, and we will never share passenger privileges ”
Obviously have quite a wide target market. As you said it’s multi generational and it’s quite a big mix.
So, how do you then position yourselves correctly, in terms of your marketing and your branding to make sure that you are hitting the right tone across the spectrum?
Well, first of all we’ve got an incredible database of loyal past guests, our Crystal society members.
The proof of that is in the pudding. When we launched our iconic 32 night North West passage sailing last August in 2014, it was for departure two years away, 6th August ’16. We opened it up, and in three days we completely sold out.
Now we fast-forward a year later to a year later –we still have 713 people still on a deposited wait list. So I would say we have loyal society members that are very loyal to us, and we will never share passenger privileges. They will always get first dibs, and we will continue to do that with each brands extension. When we open our books it will first go to our society members.
So, we’re going to target them obviously by marketing our existing guest base, but in all of the traditional, and not so traditional marketing aspects. We’ve got some creative created marketing tactics ahead of us, and it’s really the way we market today. Of course, we’re also looking at harnessing and embracing the power of social media and digital marketing, which is crucial for any company going forward.
Definitely, social media and digital are increasingly a significant part of any marketing mix – and particularly when aiming for the millennials. On that note, when you’ve got entrepreneurs like Richard Branson – who has traditionally targeted the younger, millennial consumers – announcing that he has plans to launch into the luxury cruising industry, does that impact on your strategy at all towards that set?
First of all I adore Richard Branson, he’s one of my business icons. I had the pleasure of working on a business deal with him opportunity around, I don’t know how many years ago that was now, around 2002, so around 13 years ago, when I working on Queen Mary 2. I have a great deal of respect for him. I am confident whatever he touches will be successful.
Of course I’m privy to what I read in the press, but I’m going to guess he will, to your point, be going after more of the millennials, but in any event I believe that competition is good. It makes us all work harder. If we can all cast a wider net to bring first time cruisers to our industry – more power to us, because when you look at the statistics today, only about 25 million people cruise annually. Compared to 80 million plus, which visit Las Vegas every year. So, we have a lot of room to grow.
But social media and digital-wise, we’ve got a bunch of different things. I mean obviously all the usual suspects. We have a blog, we’re on Facebook, Instagram, all the social media aspects. We just will continue to do more and more of that. More video and more posts, more integration.
“ I believe that competition is good. It makes us all work harder. ”
Do you have any brand ambassadors at all that you’ve looked at? Because I’ve noticed some other luxury travel operators getting into that and looking at leveraging these influencers. Especially with the millennial set, they seem to carry quite a lot of weight.
Not currently. But we are looking a that, so I’d say more to come on that in the future.
Because, you’re right, they do carry a lot of weight. But it’s about finding the right one. Excuse the pun, but it’s navigating the waters, because we don’t want to affront these existing while we fold in new. The business case example I use for that is Bentley.
Here’s why I use Bentley for that. I’m 53, when I was growing up obviously Bentley was some far off rich mans car that maybe your grandfather in Beverly Hills and London each had one, right. Now it’s everybody, including Kanye and Kim Kardashian, that has one. I think they’ve done a great job of evolving this traditional luxury old time brand to modernizing it while enveloping in a whole new global audience while not affronting their existing.
“ Companies that don’t have a mobile strategy will be remiss ”
The luxury traveler is also becoming more and more mobile. They’re no longer just in one particular market, they’re constantly moving – how do you manage that to make sure you’re getting to them?
Mobile is a big one. Because, absolutely, we live in a global day and age. I mean from now in January I spent five nights in my bed in Los Angeles and eight nights in my bed in Miami. What does that tell you? I, as the CEO of this company am mobile. It doesn’t mean because I’m travelling my work stops. It means while I’m traveling I’m still doing my 300 emails a day. I’m still working on my strategy papers, and meeting with finance over LinkedIn. The work still gets done, it still has to keep flowing. The global luxury consumer wants the same thing. We clearly live in a mobile day and age today. Companies that don’t have a mobile strategy will be remiss in my humble opinion.
In saying that, though, have you noticed that there are any specific regions that are responding particularly well to your branding and marketing? And have you seen any changes in the nationalities or demographics of customers coming on board?
Sure. I think, tracing back to our Japanese ownership, I would say roughly under 15% of our guests are Asian already. I think that will continue to grow organically. Just alone I think at last count there were 276 billionaires in China, so of course, as people accumulate wealth they want these incredible global vacation experiences. This will continue to grow and evolve. I would say that it’s not specific from one region. I was hosting my President’s cruise and we had nationalities from 40 countries. I would say that’s very varied. However, I do think that we will continue to see growth in Asia, but organically. Just from the simple fact that Asians are accumulating wealth, and they want to experience vacations.
In terms of ages, as I said, Crystal has evolved through the years and where before our average age might have been 70, our average age now is 55 and in fact on some sailings, the average age is 45. I think that will definitely continue to evolve.
Rooms inside the Crystal Symphony cruise ship
I would venture to guess that Esprit with it’s submarine and with Seadoos and with the wider, and all the water sports choice will skew to a lower age demographic, or the ‘young at heart’ demographic. But I think it will continue to evolve, because clearly people are accumulating wealth at a younger age, for sure we’re seeing that. The other interesting thing we’re seeing is that females are accumulating wealth like never before. Not all of them are relying on their husbands any more, so that has definitely evolved too when we’re talking about the gender gap.
In terms of technology, how is that changing the industry as a whole and your particular cruise offering?
It’s definitely evolving. I mean now because of technology, first and foremost our ships are totally equipped with wi-fi, because we realize that people want to go away, but they need to stay connected. Our Dreamliner in the sky it will be also be totally equipped with wi-fi internationally.
So, technology and harnessing the power from that standpoint is critical. Concurrent to that is also the ability to book online if they want. Although we have very strong partners within the global travel agent community – in fact 96% of our bookings come form the travel agents – but we offer that option.
We welcome that and we will continue that but it is all about options. Again, back to ECO, exclusivity, customization and options. People want options. In that, they may want their option to be the ability to go online and book directly or call us directly. So we have to have the technology to offer that seamlessly.
“ I’m a big proponent of Uber, and Airbnb and I don’t see any of this as an inhibitor to our luxury experience ”
On that note of options and customization – we’ve seen the rise of the internet and with that the emergence of services like AirBnB and Uber, which are making it easier for consumers to now plan their own travel trips to a tee. Is that a concern for traditional travel operators?
No. Again, back to being about options. Although we will soon have all of these brand extensions, we are not thinking to package them. Because coming back to exclusivity, customization and options, we want to offer the opportunity to completely mix-and-match.
For example, you might be a traveler from Australia that gets eight weeks vacation. You might want to book a Crystal Cruise luxury departure to somewhere. Then fly to another cruise departure out of Barcelona. Then from there fly to the Seychelles to pick up the Esprit yacht. Then from there fly to another city in Europe to pick up a river cruise. It’s about the puzzle pieces fitting together for what you need. That’s where the customization comes in.
By the way though, I’m a big proponent of Uber, and Airbnb, and all these entities. I think particularly being an American, it is all about championing capitalism and entrepreneurism. I think shame on the countries that are inhibiting that because it’s a great way for people to make income, and they’re also providing a better service for the consumer. I’m a big proponent of that and I don’t see any of this as an inhibitor to our luxury experience.
“ I am open to entrepreneurism and partnerships which are the right fit ”
In enhancing the customer experience, would Crystal Cruises ever look to team up with another company to expand its offering even further – say, for example, with fashion etailer Farfetch who recently launched an initiative offering port delivery services in the Mediterranean?
The answer is absolutely – we will do that. We will try to do more of those types of partnerships.
Because I think it’s fabulous, fabulous. I can tell you I am open to entrepreneurism and partnerships which are the right fit, and where it makes sense, 100%.
In terms of travel destinations, are there any emerging areas for growth that you have on the radar?
We potentially want to expand our destinations and fulfill peoples dreams via ‘bucket list’ locations. To the extent we are able to get in a place, whether it’s new and innovative river ports, and deliver the experience of the destination exclusively Crystal style, we will do that.
So, there are some specific new locations on our radar, but none that I want to disclose at this point. As an example, our rivers we think will be providing some unique itineraries. While that’s a crowded space today, we think we’re going to deliver it much differently.
Air will be the same – our customers will be able to mix and match anything and everything they want, and customize it as well. If they want to take commercial air from destination to destination to hook up, we will provide all of those services.
So, we have them mapped out, but nothing we’re really ready to expand on just yet.
Crystal Symphony Activities Deck
In terms of key challenges for the luxury travel industry as a whole, is there anything that you see that could rock the boat, excuse the pun, for the luxury travel industry?
No. I really think that what we have learned through various global economic meltdowns, as an example in October 2008, is that the luxury sectors, of all whether it’s luxury fashion, luxury travel, particularly luxury cruising are recession resistant. Even when global economic meltdowns happen the top 2% of the worlds wealthy still can afford typically, and want their right to a vacation.
What does future success look like for the brand? Are there any other opportunities that you would like to capitalize on in the years to come?
Well, if you look at our foundations to become the worlds premier, luxury, hospitality and lifestyle brand portfolio, suffice to say there is a lot more to come, but I’m not ready to sound it out at this point, but there’s definitely a lot more to come for our fabulous Crystal brand.
In terms of the future in general, technology and other features and expansions are great, but I think the success of a luxury travel operator boils down to service. It doesn’t matter how fabulous the hardware is, if you can’t handle the service right you will not survive and, or drive. That, again, is my humble opinion. Proof of that is that we are the worlds most luxurious cruise line. We have won more awards than anybody else, and we technically have the oldest hardware out there.
“ I think the success of a luxury travel operator boils down to service ”
Our competitors all have new bits and bobs, yet we continue to win the award. So, I think no matter how great, and sexy, and sizzling the hardware is, if you don’t pull off the service, you can forget it.
That’s what it boils down to and that’s what I see as the future. Much more than all of these rock climbing walls, or ice skating rinks, or whatever, on the cruise liners. Although, of course, we will continue to do that too. That’s how I look at the future in a luxurious manner.
For more in our series of conversations with Luxury Leaders, please see our most recent editions as follows:
- In Conversation With Sascha Moeri, CEO, Carl F. Bucherer
- In Conversation With Philippe Léopold-Metzger, CEO, Piaget
- In Conversation With Michele Norsa, CEO & Group Managing Director, Salvatore Ferragamo
Published on 08 Sep 2015 under Leaders
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