3/3/2015

Med Cruise Development Course

February 24, 2015

1 3/3/2015

Worldwide projects

Worldwide Experience

• NORTH AMERICA • INTERNATIONAL • PORT EVERGLADES, FL • SINGAPORE ICT • PORT OF MIAMI, FL • HONG KONG KAI TAK • PORT OF TAMPA, FL • ST. PETERSBURG, RUSSIA • PORT CANAVERAL, FL • PORT OF COPENHAGEN • CITY OF KETCHIKAN • PORT OF NICE • CITY OF JUNEAU • • ENSENADA, • DUBROVNIK, CROATIA • PORT OF SAN FRANCISCO, CA • PORT OF SAN JUAN • PORT OF SAN DIEGO, CA • COZUMEL (VARIOUS) • LOS ANGELES, CA • PORT OF CARTAGENA • VANCOUVER PORT AUTHORITY • PORTS AUTHORITY • NEW YORK CITY • PORT OF MALAGA • BOSTON (MASSPORT), MA • PORT OF • NEWFOUNDLAND AND LABRADOR • PORT OF VALENCIA • MARYLAND PORT AUTHORITY • PORT OF MUMBAI • CITY OF NORFOLK, VA • EGE PORT OF KUSADASI • PORT OF NEW ORLEANS, LA • CRUISE LINES • PORT OF CORPUS CHRISTI, TX • CARNIVAL CORPORATION • PORT OF PHILADELPHIA, PA • DISNEY CRUISE LINES • KEY WEST • HOLLAND AMERICA • PORT OF PALM BEACH, FL • RCCL • NEW JERSEY PORT AUTHORITY • NCL • HALIFAX PORT AUTHORITY • MSC • STATE OF HAWAII • TERMINAL OPERATORS • ASSOCIATIONS • P&O PORTS • MED CRUISE • HUTCHISON PORT HOLDINGS • ACCA • ICTSI • CRUISE BC • DUBAI WORLD

2 3/3/2015

Course overview, Session 1

 Interactive presentations and discussion  Session 1 –Port operations and itinerary planning  Welcome to cruising in 2025 –where will the industry be, and how do you fit?  Homeport and port of call operations – technology revolution, are you ready?  Itinerary planning –consumer demand, demographics and profitability  Costa Diadema Captain Nicolò Alba –30 minute session  Exercise 1: Itinerary planning (connecting the dots)

 Goal  Increase…  Cruise calls  Passenger throughput  Port and stakeholder revenues  Economic impacts to the community

 Objective  Gather tools to assist in achieving this goal!  Understanding of cruise line methodologies and practices  Future planning tools  Understanding cruise line decision‐makers

3 3/3/2015

beyond

and 1 2025

in

Cruise

of

Future

Cruise passengers, 1995 –2014

4 3/3/2015

Top 25 worldwide attractions, 2014

Major cruise corporations worldwide capacity, 2014

5 3/3/2015

European cruise brand passenger capacity, 2014

Success factors

• New products that generate sustained interest in cruising –New, exciting vessels, diverse on‐board products and services –New regions, itineraries and on‐shore product offerings

• Converting land‐based resort guests into cruise passengers

• High level of passenger satisfaction –Leading to repeat clientele and lower conversion costs

• Adapt quickly to changing market conditions –Move a vessel to a new destination based on demand, operations cost, low shoreside profit options, other influences

• Limited competition, reduced operational costs, and diversified revenues –Take advantage of brand fleet volumes in agreements & purchasing –Key is to make sure they do not compete against each other

6 3/3/2015

Cruise vessel deliveries and orders, 1990 –2020

Cruise vessel deliveries and orders, 2015 ‐ 2040

7 3/3/2015

Cruise growth, 2015 –2040

Cruise growth, 2015 –2035

8 3/3/2015

Regional competitive cruise deployments, 1997 –2014

Regional cruise berth capacity deployments, 2014

North / West Europe #4 Alaska Mediterranean #5 W. Coast / Mexico #2 Caribbean / Bahamas Asia & Australasia #1

#3 South America

9 3/3/2015

Top 10 cruise passenger sourcing markets, 2014

Population Global Passenger 5 Year Pct. Change Country/region (million) Share (+) USA 320 51.7% 3.75% United Kingdom & Ireland 61 8.1% 16.4% Germany 82 7.7% 80.5% Italy 58 4.0% 26.1% Australia / New Zealand 22 3.6% 2.70% Brazil 201 3.4% 1.3% Canada 33 3.4% 2.42% Spain 40 2.8% 20.7% France 62 2.4% 67.7% Scandinavia & Finland 19 1.6% 184.6%

Cruise consumer market penetration, 30.7 million in 2025

Europe North America Pop: 515 million Pop: 350 million Cruisers: 10.3 million Cruisers: 14 million Penetration: 2.0% Penetration: 4.0% Asia Pacific Pop: 3.4 billion Cruisers: 3.4 million Penetration: 0.1% South America Australia Pop: 400 million Pop: 23 million Cruisers: 2.0 million Cruisers: 920,000 Penetration: 0.5% Penetration: 4.0%

10 3/3/2015

Regional cruise berth capacity deployments, 2025

North / West Europe #4 Alaska Mediterranean #5 W. Coast / Mexico #3 Caribbean / Bahamas Asia & Australasia #1

#2 South America

Section questions

 Who are your competitors in the future?

 Who are your cruise line clients and what are their needs in 2025 & 2035?

 What is the future landscape of cruise at a global level?

 Where will the Mediterranean be compared to other cruising regions?

11 3/3/2015 2 operations

Port

Cruise port operations

 Homeport  Meeting the needs and expectations of the cruise operator and passenger  Operating models

 Port of call  Maximizing positive impacts – minimizing costs  Partnering to meet demands

 Future fit within a regional scheme  Technology as an operations driver  Differentiation through port operations

 What do the cruise lines want from you as a port?  Cruise line and passenger satisfaction  Operations costs vs. revenues

12 3/3/2015

Operations

Port Fees Marine Servicing

Security Shore Coaches Excursions & Taxis vessel

Cruise

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Avg. passengers per ship by year of construction, 1999 –2019

Projected Percentage of Passengers per Ship, 2015 –2040

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Percentage of Ships Over 300 Meters, 2015 –2040

Design vessels

Design Vessel 1 Design Vessel 2 Design Vessel Design Vessel 3 Type (small) (Panamax) (post‐Panamax) (super post‐Panamax)

Passengers 200 – 1,500 2,000 to 2,600 2,500 to 4,000 5,400 plus

Crew 450 850 1,200 +1,200

GRT / Displacement Up to 50,000 / + Up to 100,000 / + + 100,000 / + 50,000 + 150,000 / + 70,000 Tons 20,000 50,000

LOA (m) 125 to 250 275 to 300 300 to 345 350 plus

Over 36 Beam (m) Up to 28 Up to 36 Over 40 (generally 40 to 50)

Draft (m) Up to 6.5 Up to 8.5 8.5 to 10 +8.6

Air Draft (m) Less than 50 Less than 60 Up to 62 Up to 62

15 3/3/2015 Homeports

Homeport passenger movements, >2,000 passengers

DIS EMBARKATION EMBARKATION SEPARATION

TIME

16 3/3/2015

Homeport passenger movements, 2,500 passengers

DIS EMBARKATION EMBARKATION

PASSENGER HOLDING

Homeport passenger movements, 3,000 passengers

DIS EMBARKATION EMBARKATION

PASSENGER HOLDING

17 3/3/2015

Homeport passenger movements, 5,400 passengers

DIS EMBARKATION EMBARKATION

PASSENGER HOLDING

Major terminal functions

• Operations

– Coordination marketing –Berth scheduling

–Setup / handover Fiscal agent operations – Gangways (optional) – Traffic control • Maintenance –Routine Passenger stevedoring –Major services • Housekeeping (janitorial) • Security

– Passenger agent security –Terminal • Fiscal agent • Marketing / business development • Parking • Ground handling & Stevedoring (usually separate stakeholders)

18 3/3/2015

Models

marketing

Fiscal agent operations

Passenger stevedoring services

agent security

Management model, port operated

• Operator paid on a per passenger basis

• Minimum guaranteed annual income

• Operator may have other operations as a percentage of income for: –Parking –Secondary Uses •Cruise fees •Non‐cruise fees –Other Income Clients •pays operator fees Owner •pays non‐operator fees

• collects 100% profit Owner

19 3/3/2015

Lease model, private terminal operator

• Annual payments to Owner

• Covers all facility operations and maintenance –Major issues covered by owner

• Minimal control –Use KPI’s to monitor •Cruise fees Clients •Non‐cruise fees

•pays operator fees TO •Owner pays non‐operator fees

• collects rent Owner

Mixed model, owner operated

• May contract out key functions (income vs. cost) – Maintenance –Security – Housekeeping –Parking

• Less control / lower cost –Non‐essential functions •Cruise fees Clients •Non‐cruise fees

•pays contractor fees Owner

• collects 100% profit Owner

20 3/3/2015 standards

Performance

Performance standards

Operational cycle – disembarkation 3.75 hours

SHIP

Operational cycle – embarkation 5 hours

Time in terminal (disembarkation) –90% under 30 minutes

Time in terminal (embarkation) –90% under 15 minutes PASSENGERS

Queuing ‐‐ 90% under 5 minutes (except embarkation)

21 3/3/2015

Key performance indicator coverage

•Total embarkation / debarkation times –GTA waiting –Walking distances (Curb to vessel) – Baggage drop off / pick up –Security screening – Check‐in – Gangway access – Baggage delivery

•Other significant KPIs – Financial –Safety / Security of passengers and staff – Cleanliness –daily and overall maintenance – Satisfaction – meet & greet, experience, friendliness, etc.

Approach

• Identify the standards of operations

• What Key Performance Indicator’s (KPIs) should be implemented –If so, what are those standards for each?

• Determine how each facility operates –Standards should be compromised based upon the facility limitations

• Establish KPIs –Based upon operational model and division of responsibilities –Operational target or range –Service standards enforcement

22 3/3/2015

RCCL KPI’s –line measurement standards (sample)

Standard * Measure Mitigation Plan Reporting Mechanism

Guests should not exceed Special log for OA review Adjust security team staffing the entrance to the security meeting and GPS Vessel Turn to speed document check queue. 5 minute wait from Zone Lead will record daily Report if failure occurs (will and guest preparation to Security queue entrance to guest data. note max # of guests enter x-ray and processing (20 guests per exceeding the queue magnetometer machine. queue). entrance for each event)

Add GPS staff to work queue Guests should not exceed Special log for OA review and prepare guests for the entrance to the check-in meeting and GPS Vessel Turn processing. Gauge if there queue. 5 minute wait from Zone Lead will record daily Report if failure occurs (will are empty / lighter lines to Check-In queue entrance to guest data. note max # of guests shift guests. Adjust to 'double processing (12 guests per exceeding the queue stacking' method if queue). entrance for each event) necessary.

Guests should not exceed Special log for OA review the entrance to the seapass Evaluate need to purchase meeting and GPS Vessel Turn queue. 1 minute wait from Zone Lead will record daily permanent equipment for Report if failure occurs (will SeaPass queue entrance to guest data. pier then augment with ship note max # of guests processing (6 guests per equipment. exceeding the queue queue). entrance for each event)

CBP meets standard if never Review operations with CBP overflows the entrance of the management to request Special log for OA review 'US / NON US' queue. appropriate staffing levels if meeting and GPS Vessel Turn Balance emptying ship with Zone Lead will record daily needed. Adjust ship call off Report if failure occurs (will guest experience and Debark (CBP) data. schedule to improve guest note max # of guests commencement of embark flows. Add GPS staff to work exceeding the queue process. Maximum # of the queue to prepare guests entrance for each event) guests will fluctuate per for CBP processing. voyage.

Marseilles assessment exercise

 Evaluate your passenger experience in Marseilles:

 What did you observe?

 Information (on ship, process, ports) ?

 Boarding?

 On board?

23 3/3/2015 Call

of

Port

Port of call components

Security

Tourism Welcome

Ground Transportation

Sites, venues, commercial, retail, restaurant

24 3/3/2015

Port of call movements, 15,000 passengers

Port impacts

• GTA operations – Coaches operating simultaneously –Taxi operations with active curb – Limited private vehicles – Shuttle

• Marshalling area –Off‐site for easy access? – Depends on port configuration and space

• Parking (cumulative impact) – Primarily port staff (much higher for homeports)

• Vessel servicing? –Waste, fuel, services, stores

25 3/3/2015

Passenger capacity impacts

• Cumulative peaking effect – Timing of berthing –Number of vessels (1 to ?) – Vessel capacity (500 or 5,400) –Rate of passenger flow (controlled at gangway, security) –Total time in port (4, 6, 8 or more hours)

• Does port configuration affect impacts? –Does a terminal provide a barrier or gateway? – Commercial vs. non‐commercial port • What are some examples? • Is it a choice of revenue for the port v. community? (what drives the choice?)

• How are crew members dealt with in your port? –Are you meeting their needs, providing services and capturing revenues?

10,000,000

9,000,000 8,650,000

8,000,000

7,000,000

6,000,000 5,909,236

5,000,000

4,000,000

3,000,000 1,900,000 2,000,000

1,000,000 337,475 0 200020012002200320042005200620072008200920102011201220132014 Venice Tourists Venice Cruisers

26 3/3/2015

Negative cruise tourism model

CRUISES BEGIN EVERYONE LIKES THEM

SUCCESS START UP OVERCROWDING COMMUNITY CAPITAL NEEDS SUPPORT NEGATIVE REACTIONS

PASSENGER DISSATISFACTION CRUISE LINE DISSATISFACTION COMMUNITY BACKLASH

Comprehensive approach to cruise operations

TOURISM CRUISE LINES AND INFRASTRUCTURE: ASSOCIATED AIRPORT, SERVICE PROVIDERS HOTEL, TRANSPORTATION

Cruise TourismPORT Delivery: Focus on Visitor Satisfaction

CITY VENUES & SITES

27 3/3/2015

Managing the destination

• This is the area where more change is needed • It is not just about a pier or dock or terminal

It is about the destination as a whole…

• Meeting the needs and expectations of the visitor • Competing for economic and social impacts • Providing value for money

• Managing resources today and for the future – Not just stores, shops and restaurants – Historic and natural resources, roadways, ports, parking areas, environment, etc.

Managing the passenger experience exercise

 What may need to be done in the future to manage the passenger experience?

 How to cope with crowding? (regional and port perspective)

28 3/3/2015

Security

and

Technology

Industry trends and standards

• “Highly Functional = World Class” – Performance targets achieved – Limited queue time/length – Vessel and Brand as the “experience” – Minimized labor costs –Two level operations –Multiple gangways –Flexible for future reconfiguration

• Next Level –Space for any holding scenario –More comfort and amenities –airport model –Elevators, escalators – redundancy –Large investment in AV/IT –Terminal as part of the “experience”

29 3/3/2015

New technology driving the industry

• Advanced Passenger Information System (APIS) –e‐passport readers

• Radio Frequency Identification (RFID) – baggage tags

• Biometric Identification Systems –integrated Automated Fingerprint Identity (IAFIS)

• Scrubber / shore power

• Internet / smart phone Apps – check‐in –tour options, ticketing, maps, guide links

Cape Liberty cruise terminal

30 3/3/2015

Cape Liberty cruise terminal

Next generation cruise terminals will be…

• Single terminal servicing multiple brands –Airport style concept –Off site with vessel access

• Overlapping operations –Security portal – Centralized Customs & Immigration unit • Technology savvy space –Back of house functions combined • Baggage screening with RFID

• Cruise lines using more technology for check‐in / baggage – Check‐in processes will disappear as we know it – Increase efficiencies / reduce costs

• Smaller terminal spaces –Relying on adjacencies, flow, technology and intuitive flow planning

31 3/3/2015

Terminal for multiple users using efficiencies to control costs

How will technology change the experience?

• Expedite homeport processing –provide advanced information about the terminal process –real time – check‐in, baggage and security

• Changing port of call visits –more accurate information about things to do and see – access to other shore excursion options –shrink the pool of shorex passengers, more independent operators • Traffic patterns will change

• More emphasis on experience and immediate gratification –more options for experiences for small groups / single persons –wider demographic and more knowledgeable on destination –do not forget powerful Wi‐Fi for passengers, crew and clients!

32 3/3/2015

Security

• Driven by world, regional and local threat assessment –Affects deployments – Defines security level

• Flexibility in security design and processing is required based on –Threat level – Passenger throughput –Demographics

• Likely to get more stringent for cruise over next decade – U.S., Asia, Canada applies rules that require terminal security (FIS), as well as primary, secondary and support areas (5,000 sq. ft.) EURO 1.5 million

• ISPS sets minimum standards –In contrast to tighter security, access to the water’s edge is expanding!

Conflicting needs?

33 3/3/2015

Trending to 2025 and beyond…

 Focus on creating a Huge consumer market in Asia  New and expanded brands dedicated to the market sailing worldwide  New build market moves beyond Europe to fuel growth of the industry (China)

 Technology influences vessel and port operations  Minimized or no check‐in counters (airport style)  On line check‐in, RFID baggage tags drive automation (decrease staffing)

 Security worldwide is a major issue for cruise operations  Affecting deployments and movement of assets at sea / port  Increased terminal security processing throughout Europe / Middle East

 Building the backbone for the future through strategic planning  Develop businesses & partnerships to control operations (shorex, pre/post, staff, stores)  Investment into key infrastructure is expedited (ports, terminals, private islands)

Section questions

 What technologies have you used as part of this cruise?

 What was the affect?

 How do you believe technology will influence your future operations?

 Do you have any cost‐saving or experience enhancing examples of technology positively impacting your destination?

34 3/3/2015 3 planning

Itinerary

Deployment and Itinerary planning

 What is the primary driver of cruise line deployments to a region?

 Is deployment planning the same as itinerary planning?  How do they differ?  How are they similar?

 What factors influence cruise brand itineraries?

 As a destination or port how can you best influence this planning effort?

35 3/3/2015

Deployment

N. Europe

Alaska 3 5 Caribbean 2 1 Mediterranean 4 6 Australasia South America

Seasonality

S E A S O N A L

Y E A R R O U N D

S E A S O N A L

36 3/3/2015

Deployment and itinerary planning selection criteria

Marketing and sales Marine and operations

 Consumer awareness  Marine navigation and access  Access to consumers –sales chains  Security  Marketability value for the consumer  Berth, apron and terminal features  Fit with cruise brand philosophy  Ground transportation areas  Fit with consumer holiday patterns  Provisioning

 Landside – revenue opportunities  Port charges  Airlift – capacity and cost  Labor, fuel and other operating costs  Lodging – capacity and cost  Regulatory and environmental issues  Consumer product satisfaction  Maritime law  Destination venue and tour capacities  Emission Control Areas

Logistics, air and shore excursions Finance and legal

Selection criteria

• Varies by cruise line based upon consumer target –Use yield management tools to identify pricing schemes

• Operators place vessels in the most easy & profitable locations –Driven by consumer demand – Need to balance fleet to capture new customers and keep loyal cruisers

• Profitability –Sales & Marketing costs vs. Ticket price –Onboard / shoreside revenue opportunities vs. Operational costs

37 3/3/2015

Deployment drivers

• Driven by profitability and net yields –Provide what the consumer wants (based on vacation patterns) –Craft a product with marquee destinations, shipboard experience and intrigue with new ports (every demographic may be slightly different)

• Limit time in ports while creating value experiences –Critical on long‐haul itineraries (how many ports to visit?) – Revenue v. operations costs

• Include destinations lines directly control or have deals with… –Private islands, shorex sales, retail, guarantees

• What other factors influence deployments in Europe?

Factors influencing European deployments

•Homeland Market: Opens key national consumer markets

•Target Market: What markets provide large volumes of cruisers?

•Shorter Cruise Product: Ability of ships to reach marquee ports

• Seasonality: No more winter cruising ‐ season is year round

• Airlift: Out as large part of mix due to homeport options (interporting, close to home)

• Vessel Size/Capacity: Infrastructure to service vessels targeted

38 3/3/2015

Why is deployment critical to success?

• Drives profit and loss

• Leverages expensive mobile assets

• Fluid, complex issues affecting entirety of the corporation –It is the heart and soul of the product!

Itinerary development considerations

• Profitability – Leverage consumer tastes and demands into revenues

• Guest Appeal

• Guest Sourcing –Drives itinerary types, patterns, ports, etc.

• Brand Positioning

• T(time), S(speed), D(distance)

• Business relationship with the destination –Costs, contractual guarantees, revenue opportunities, etc.

39 3/3/2015

What are other major considerations?

• Infrastructure –Does it support our ship?

• Berthing availability and policies –Confirmation policies and assignments –Tendering based upon vessel capacity

• Fuel cost, type (low sulfur) and availability

• Emission, discharge and wastewater regulations

• Air lift availability & cost (dependent upon brand/itinerary)

Price comparison of itinerary patterns, 2014 sample

Vessel Homeport Itinerary Inside Outside Balcony Suite Notes 8‐Night Grandeur Baltimore $409 $539 $1,149 $1,349 Bahamas 7‐Night Explorer Cape Liberty $549 $749 $859 $1,049 Bahamas 7‐Night Quantum Cape Liberty $1,209 $1,249 $1,269 $1,789 2014 Bahamas 7‐Night Serenade New Orleans $549 $649 $849 $1,499 Bahamas 7‐Day Pride Baltimore $529 $649 $739 $1,389 Bahamas 7‐Day E Summer Pride Baltimore $889 $989 $1,119 $1,549 Caribbean 2014 7‐Day E Fantasy Charleston $369 $529 $709 $1,109 Caribbean 7‐Day E Liberty Miami $369 $489 $679 $1,029 Caribbean 8‐Day E Splendor NYC $369 $479 $739 $1,149 Caribbean 8‐Day E Summer Splendor NYC $919 $1,019 $1,299 $1,779 Caribbean 2014

40 3/3/2015

Itinerary comparison conclusions, 2014 sample

• Slightly higher fares for northeast ports vs. –$50 ‐ $100 per category –For Florida ports per diems made up for in lower fuel costs, more time in ports, more ports per sailing, etc.

• Newer vessels get higher ticket prices – Quantum, Breakaway and Epic

• Higher pricing further out in sales cycle and reduces over time – Revenue management model – Supply & demand would typically dictate increased pricing, but for cruise lower pricing is used to fill the ship

Deployment and Itinerary planning

 What is the primary driver of cruise line deployments to a region?

 Is deployment planning the same as itinerary planning?  How do they differ?  How are they similar?

 What factors influence cruise brand itineraries?

 As a destination or port how can you best influence this planning effort?

41 3/3/2015 study

case

Quick

Alaska market

1,200,000 50

45 1,000,000 40 800,000 35 Ships

Passengers 600,000 30 Cruise

Cruise 25 400,000 20 200,000 15

0 10

Passengers Ships

42 3/3/2015

Port cruise traffic, 2004 ‐ 2015 120,000

103,044 100,000

80,000

60,475 60,000

40,000

20,000 3,366 0

What happened to the Port?

 The Port entered the cruise market in 2004 with the opening of its new terminal.

 At its peak, the port handled in excess of 60 cruise ship calls and 100,000 passengers with strong prospects for growth.

 The port has seen a decline in the number of cruise calls since 2008.

 In 2011, they lost the last remaining weekly call by .

 Over the past three years the port has handled between six to ten vessels per season and less than 10,000‐passengers.  primarily made up of shoulder season repositioning calls  periodic calls from smaller cruise lines  small pocket exploration cruise ships

43 3/3/2015

Impacts and next steps

 The impact of this deterioration caused an erosion of the shore excursion program, once a strength of the destination!

 Decline of engagement from the business community and citizens as volunteers.

 Sustained loss of traffic and revenue forced the organization to reassess the relevance and roll in the cruise sector.

 What are the opportunities and challenges associated with development of cruise to support future planning initiatives.

 The study should serve as the basis to profile what would be required to be competitive, create a basis for developing priorities and the development of an action plan.

SWOT assessment

44 3/3/2015

Cruise projection composite, 2004 ‐ 2025

4 Q&A

Captain’s

45 3/3/2015

Q&A

 What are the main challenges that you encounter at a port?

 What is key for the success of a port?  Turnaround and port of call

 How do the Med ports compare to ports in other regions?

 Can you provide any port best practices examples?

 Any specific suggestions or recommendations for improvement? dots

the

5 connecting –

planning

Itinerary

46 3/3/2015

Assignment overview

 Divide into teams  Each team will build a deployment model and itinerary for a brand  45 minutes to work and 5 minutes to present followed by discussion  Utilize the information provided as to the following:  Deployment drivers  Seasonality (if any)  Itinerary balance, cost and revenues, etc.

 Prepare an itinerary for the following:  Star Cruises  Oceania Cruises 

 Consider the following elements:  What is the brand and therefore the target market?  Whom is the passenger demographic?  Speed, distance and time in port (consider homeport operations)

Typical Income Cruise Brand Age Range Market Sector Notes Nationality Range Contemporary Younger middle class, couples Primarily US 25 and up Avg. 3, 4, 5, 7‐day sailings and families Primarily US and Premium Celebrity Cruises 35 and up USD $100,000 Couples and families Canadian 7‐day plus sailings Premium Primarily US 45 and up USD $75,000 Couples and retired singles 7‐day plus sailings Contemporary Younger couples, singles and Norwegian Cruise Line Primarily US 35 and up Avg. 7‐day plus sailings families Royal Caribbean US and Intl. 30 and up Avg. to high Contemporary / Premium Couples, families and singles International (50% goal) Disney Cruise Line Us and Intl. mix 35 and up Avg. to high Contemporary / Premium Families and couples Predominantly couples and Primarily US 35 and up Avg. to high Contemporary / Premium singles Luxury Crystal Cruises Us and Intl. mix 55 and up High Couples and retired singles 7‐day plus sailings Luxury Small ship experience Silversea Cruises Us and Intl. mix 55 and up High 7‐day plus sailings Couples and retired singles Luxury Small ship experience Seabourn Cruises Us and Intl. mix 55 and up High 7‐day plus sailings Couples and retired singles Affordable Luxury Small ship experience Regent Seven Seas Us and Intl. mix 45 and up Mid to high 7‐day plus sailings Couples and retired singles Affordable Luxury Small ship experience Oceania Cruises Us and Intl. mix 45 and up Mid to high 7‐day plus sailings Couples and retired singles Primarily European Contemporary MSC Cruises 30 and up Avg. Couples, singles and families mix 7‐day plus sailings Primarily European Contemporary 35 and up Avg. Couples, singles and families mix 7‐day plus sailings Premium / Luxury UK and Intl. mix 50 and up Mid to high Couples and retired singles 7‐day plus sailings Premium / Luxury Hapag‐Lloyd Cruises Primarily German 50 and up Mid to high Couples and retired singles TWO 7BERTHS‐day plus sailings ALTERNATIVES Contemporary AIDA Cruises Primarily German 25 and up Avg. Couples, singles and families 3, 4, 5, 7‐day plus sailings

47 3/3/2015

Celebrity Equinox, 11‐Night

Port Detail Arrival Departure • Day 1 Fort Lauderdale, Florida 4:00PM • Day 2 At Sea • Day 3 Grand Cayman Tendered 8:00AM 5:00PM • Day 4 At Sea • Day 5 Cartagena, Colombia Docked 7:00AM 4:00PM • Day 6 Colon, Panama Docked 8:00AM 6:00PM • Day 7 Limon, Costa Rica Docked 7:00AM 6:00PM • Day 8 At Sea • Day 9 Belize City, Belize Tendered 9:30AM 6:00PM • Day 10 Cozumel, Mexico Docked 8:00AM 5:00PM • Day 11 At Sea • Day 12 Fort Lauderdale, Florida 7:00AM

48 3/3/2015

Oceania Marina, 7‐Day

Port Detail Arrival Departure • Fri Copenhagen, Denmark 8 PM • Sat Berlin (Warnemunde), Germany 7 AM 11 PM • Sun Cruising the Baltic Sea • Mon Tallinn, Estonia 9 AM 6 PM • Tue St. Petersburg, Russia 9 AM • Wed St. Petersburg, Russia 8 PM • Thu Helsinki, Finland 10 AM 5 PM • Fri Stockholm, Sweden Disembark 8 AM

Superstar Virgo, 3‐Night

Port Arrival Departure • 13 Mar 2015 HONG KONG 2030 • 14 Mar 2015 HIGH SEAS • 15 Mar 2015 HONG KONG 2000 • 16 Mar 2015 HONG KONG 1400

49 3/3/2015

Tools

 http://www.sea‐distances.org/  Use voyage calculator (there is a complete template that can be used)

 Presentation should discuss the following:  Cruise brand, consumer target market(s)  Deployment  Vessel, capacity, LOA, etc.  Seasonality (if any)  Sailings (how many)  Cover the major deployment drivers in the presentation  Itinerary  Type (length)  Ports (explain the mix and reasoning using itinerary drivers in the presentation)  Speed & distance between ports  Time in port (discuss cost vs. revenue factors)

Discussion

• How did the team do in terms of presenting the deployment and itinerary plan?

• Discuss the major elements presented and the reasoning

• How does this exercise apply to port operations and marketing?

• Can the process provide uses when developing presentations or discussing issues with cruise line decision‐makers?

• What are the key lessons learned from this exercise?

50 3/3/2015 6 Takeaways

Key

Course

Course key takeaways

 Developing a mid‐ to long‐term strategy should:  Identify and benchmark competition

 Define port infrastructure requirements  Larger vessels driving needs

 Define and expand upland soft infrastructure needs  Attack congestion now for the future  Prepare for new consumer markets (China and others)

 Consider technology in all aspects of planning and delivery

 Security and waterfront access will further define cruise infrastructure

 Establish key performance indicators  Focus on…  Passenger satisfaction  Cruise line services  Community impacts

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Course key takeaways

 Define your future target markets (cruise brands)  Understand their perspective of your region and port

 Work together as a Unit to attract and retain cruise (Med Cruise)

 Develop itinerary products, shore excursions and other revenue options  To allow them to expand their presence  Develop additional revenues and passenger satisfaction levels

 Communicate regularly with cruise line personnel  Survey and discuss their needs  Differentiate your destination

 Focus planning efforts on cruise passenger satisfaction  Each destination is unique in its strategy for development and implementation

Med Cruise Development Course

February 24, 2015

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