The cruise industry is about to get very interesting. Last week, Richard Branson’s Virgin group announced that they are taking to the high seas and launching Virgin Cruises with two new-builds tentatively scheduled for launch in 2017. We haven’t seen the launch of a new cruise line since Disney Cruises in 1996. And if past history is any indication, this launch will be one to watch.
Branson is not afraid of competition, and he has a worthy competitor in Mickey Arison, the CEO of Carnival Corp. Both are billionaires and not afraid to spend money. Arison head up several cruise lines and a national basketball team—the Miami Heat. Branson has his fingers in…well everything from travel to rock concerts. And Arison and Carnival can expect some marketing that will get the attention of the consumer. Back in the 90s British Airways ran a $10 million promotion for free flights on a specific day. Branson’s Virgin Airways countered with a $30,000 ad buy encouraging people to fly free with BA on that day—but to fly Virgin the others.
I suspect that the new Virgin Cruises will be an upscale product. The Carnival product will be safe; but Carnival Corp.’s upscale brands, Seabourn and possibly Cunard and Holland America may be in Branson’s crosshairs.
While there was no outward indication that it would target the upscale market, Branson’s labeling the 2 ships “world class” seems to indicate that they are eyeing that demographic. And for what he wants to do to the cruise industry, his comment says it all, “We plan to shake up the cruise industry,” Branson said, “and deliver a holiday that customers will absolutely love.”
With 76% of the US adult population having never cruised, there is an undeniable opportunity for the cruise market; and the sub-market catering to the masses is a crowded field, it only makes sense that Virgin Cruises will seek out the more affluent customer. Do you think the cruise industry has room for another player? Do you think Branson is the right player?