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Interview with Royal Caribbean's CEO in France

05 Aug 2011

Royal Caribbean has returned to France with a new office, 9 years after it withdrew from France following the attacks of September 11, 2001. Royal Caribbean took over the French company Latitudes South, which was represented in France since February 2002 and conducted a wave of recruitment to achieve a team of thirty people.

Building on the development of the cruise in France, Royal Caribbean will offer for the first time in 2012, cruises departing from French ports. Mer et Marine had the opportunity to meet Frédéric Martinez, the new CEO of Royal Caribbean in France, to learn more about the return and the group's strategy in the market hexagonal.

Why the return of Royal in the French market?

The main point is, of course, the growth of the cruise market in France, with an increase of about 10% over 5 years. Europe, in general, is growing much, the market development of the cruise, while the U.S. market, which is most important, no longer growing. And, within Europe, France is the emerging market, that is to say a small market but very promising, with more and more people interested in this offer holiday, which really starts to exist in the imagination of consumers. Hence the decision to Royal Caribbean to come on the market, which last year reached 12% growth.

The potential is so important?

Look at the penetration rate, that is to say the number of people who made at least once in their life on a cruise. In France, 0.6%, while the United States is 3.5% and in major European markets is much more than in France: 2.5% in Britain, 1.5% in Germany, more 1% in Italy. Even Spain, which is a less populated, has a cruise market bigger. We believe the fact that there will be in France, a natural catch-up compared to other Western European countries.

What are your goals in France?

In addition to all the cruises we offer in the world, the additional supply we will set up in France has three ships of Royal Caribbean International from Toulon and Marseilles, for cruises in the Mediterranean, and from the Havre to see Norway, Scandinavia and Russia. We will also, on the Caribbean cruises departing from Pointe-à-Pitre in the winter of 2012. Our growth target is important, since it increases the offer, but it is also very reasonable. We are targeting next year for just under 10% of the market, from 40 to 45,000 passengers on a French market, which will end in 2011 to more than 400,000 passengers and should be in 2012, around 450,000 passengers. Our goal is important but it is not huge in terms of volumes.

Royal Caribbean is the second global group of cruise industry. What position do you target market hexagonal?

We aspire to become the fourth largest cruise in France, so we do not undertake a sudden burst in the market.

The French market is certainly growing but is still enormous. There are already a number of actors and a strong competition between two leading companies, Costa and MSC. In this context, what is your strategy to promote your product?

Our offer is really a qualitative dimension. What we want is to add a layer of quality, one side "premium" to what is already happening. For, even if it is not always clear on the French market, where the differences between the companies may not be as well known as other markets, the quality of our vessels and their degree of innovation, quality service and food we put on the top of the basket.

You do not have the intension of you engage in a price war?

Absolutely not. We have more than one strategy as a strategy of volume. We are not there to cut prices. It would be absurd because, finally, in relation to the size of the market, there is not many players than that. Costa is really dominant, MSC has a good 20% of the market and then there are actors who are less than 10%. There is room for everyone, especially with the growth that we know in France. Therefore we do not want to put us in an aggressive approach from our competitors and colleagues.

Cruise has long been the malaimée tourism in France. Changing the perception of tourists in recent years, however, thanks to the important work of communication and action made ​​by commercial stakeholders. Do you think this trend will continue and even intensify?

The cruise market continues and will continue to attract people who want to renew their vacation experiences. We want to help attract more people to cruising in general, our products if possible of course. We should not see this as trench warfare between a few players who compete for passengers. It's a job to continue to get French consumers to say: "Look, the cruise, why not? "And make them aware of all the potential benefits this type of holiday, particularly for Royal Caribbean, where supply is very large. It also lead those who know our products in other parts of the world to benefit from France, and finally bring those who know the cruise but not our product to try this new offering.

Talk about offering additional to what already exists. What are the characteristics of different brands of Royal Caribbean Cruises?

The group's strategy is multi. Royal Caribbean International is the brand of mid-range family, accessible, international, not really meant to be premium but are characterized by a very good quality. It is a global brand, found on all continents and whose level of service is far superior to conventional wisdom on the cruise.
We also Celebrity Cruises, which is a range of "luxury" or "super-premium". Azamara Cruises Club and then, more confidential, with fewer ships, and positioned on the luxury.
Finally, we have a layer of more companies customized for different countries. In France, we CDF - Cruises of France, and there is also this concept in Germany and Spain.

You mention France Cruises, a subsidiary of Spanish Pullmantur, whose parent is like RCI, Celebrity and Azamara, the group RCCL. As you now, CDF has offices and teams in Paris. Will you build synergies?

We are part of the same group, so logically we develop synergies on the "back office". Today we have a number of synergies that affect such purchases or pooling of resources. Now the marks are well separated on a marketing plan and communication to the public and distribution networks. In our structure, owned by France Cruises Pullmantur, which forms a self-only group, that is to say that we must rise high enough that the branches are found.
Then there is a policy distinct brands with different positionings. There is such a very international fiber with highly innovative large ships is Royal Caribbean. France cruise ships offers smaller, more intimate atmosphere and especially developed specifically for French passengers. So there really is room for both brands, which do not compete and instead articulated well as the requests are different.

Can you imagine a future merger between CDF and the French office of Royal, or for example a combination of sales forces and the establishment of a common call center?

A reconciliation is not in the plans now, but obviously in a group, it may still be in the future developments in the organization. In any case, synergies exist and the teams know each other well. For a call center, for now, we have no project in this area. Sales teams are really separate. It should also know, if we take the U.S. market for example, that there is even a separation between the sales teams of Celebrity and Azamara. Obviously, in missions abroad, all that is meeting under the same call center. But today we do not plan to cruise in France although, again, the structures of the groups are not eternal and everything can change.

Lights to attract the market, you will have franciser the product. What will be your actions in this area?

In terms of product, beyond a certain threshold of passengers from the same country, we trigger our automatic "machine customizing", including the development of personal-speaking, whose number depends on the proportion passengers, such as French, on board. So there are efforts already made, but it will be even more with our development on the French market. We know in particular that the inclusion of the Francophonie is a very high expectation of customers. Especially since, as appropriate, from the ports with the French ships of Royal Caribbean, we expect that half the passengers or the French. So there will be on board, French personnel, announcements in French, as translated menus in restaurants and logs in the cabins. Ground handling, excursions are also available in French.

The product will nevertheless remain international in its entirety. And there is, often wrongly, a certain distrust of the French against American ships ... Do you have any concerns about that?

What is important is to be sufficiently adapted to the French customers but still offer an international flavor. There's a bit of America with Broadway shows, the range of food is extremely large with kitchens around the world, the crew and passengers from different countries ... Is sometimes presented as the French chauvinists. It's true they love their culture and defend their language, but they are also people who love to travel and go abroad. So we have a space to hold around a truly international offering, with a notion of quality and the addition of a French flavor with these shipments in Toulon, Marseille and Le Havre.

You propose in particular, next year, shipments of the summer in La Seyne-sur-Mer, near Toulon, on the Liberty of the Seas. It is a gigantic ship, with 1,800 booths. However, the port of La Seyne was not used previously for loading and unloading. How will you handle this situation and how do you approach routings of passengers?

We are currently working on embarkation, so as to have a direct transfer between the station and the port of Toulon La Seyne, where Liberty will arrive, which is indeed a ship of exceptional category. We believe that many customers come on board this ship, and for referrals, we believe that the train will be dominant compared to the aircraft, air supply is limited in Toulon. From Paris, TGV, it is less than 4 hours away, what remains, for a cruise, quite reasonable. And even more closely and therefore convenient for customers living in areas such as Rhône-Alpes and PACA.