When Richard Branson’s Scarlet Lady cruise ship sets sail this October, it will do so without one of the strongest advantages thought to be crucial to the recovery of the cruise line industry: hardcore cruisers.
That was by design. Virgin Voyages, Branson’s cruise line first announced in 2016, wants to attract nontraditional cruisers, folks who can’t see themselves spending a vacation out at sea, shedding the stereotypes of geriatric bingo tournaments and endless buffet lines.
Instead, the ship has a tattoo parlor onboard and hosts a drag queen brunch. Mark Ronson will be in the DJ booth, and guests can expect to “realign their chakras” at yoga classes. Oh, and it’s adults only, so guests won’t have to worry about temper tantrums.
Even the ship’s interior designer, Tom Dixon, bragged about never having worked on a cruise ship before.
“They don’t care if they’re turning off other groups like older, experienced cruisers. They want this to be hyperfocused on new customers,” said Rebecca Hamilton, professor of marketing Georgetown University’s McDonough School of Business. “They are targeting experimentalist millennials who have money to spend.”
But Virgin Voyages wasn’t planning on weathering the storm of a global pandemic, which has forced it to shelve its first summer at sea. Instead of launching in April as planned, Scarlet Lady will set sail from Miami for the Caribbean in October. A second ship, Valiant Lady, is expected to launch in Europe in 2021 and sail the Mediterranean.
A good plan, then came Covid-19
By banking on nontraditional cruisers, Virgin Voyages’ launch has become increasingly complex. The cruise ship industry became the first corporate victim of Covid-19 in the United States, after two Princess Cruises ships (owned by Carnival Corp.) became hotspots for outbreaks. In March, the Centers for Disease Control and Prevention released a No Sail Order until July 24.
As the pandemic ebbs, Carnival has already announced a “phase-in” approach to its return, set for August. Among industry experts, it is largely expected that “hardcore” cruisers—guests who take multiple cruises a year and are loyal to a specific brand—will help buoy the industry during its recovery.
“Core cruisers are crucial, in my opinion, to the cruising industry,” said Paul Golding, an analyst at investment firm Macquarie. “[They] constitute a significant proportion of cruisers from year to year.”
But according to the industry’s own trade group, Cruise Lines International Association (CLIA), Virgin’s bet made sense. This was supposed to be a banner year for the industry, carrying more than 32 million passengers, growing by almost 50% in the last decade. In a survey done prior to Covid-19, CLIA found that 66% of Gen X and 71% of millennials have a more positive attitude about cruising than in 2018.
However, Nathan Rosenberg, chief marketing officer at Virgin Voyages, refutes the characterization of a “millennial” cruise line. In fact, he said that Virgin as a brand naturally attracts an audience between ages 35 and 60. Branson himself turns 70 this July.
“I think we’ve been pigeonholed weirdly by a lot of media and the conversation about the brand as being a ship for millennials, or a ship for those new to cruising,” said Rosenberg, a Virgin veteran who’s worked for the company off and on since 2000. “The story was more about, ‘Virgin has a tattoo parlor.'”
Going adults-only is not the only change
Whether it wants to attract a younger audience or not, Virgin clearly sees an opportunity in the market, something akin to what has already happened in the hotel industry with luxury digs like The Standard, which has hotels in Miami, Los Angeles and New York. “That doesn’t exist as a concept at sea,” Rosenberg said.
After Covid-19, Rosenberg said the brand will spend less time marketing the tattoo parlor and more on showing every other feature of the ship.
There are a few things working in his favor. Even before social distancing was part of the nomenclature, there was never a buffet aboard Scarlet Lady. The ship’s restaurants were designed to cater to smaller, more intimate groups, and guests will have to wait for a table via a virtual queue on the ship’s app.
As far as a specific audience is concerned, Virgin is banking on two things: the excitement of a new ship to help pull away curious cruisers from other brands and to attract the previously mentioned subset of “nontraditional cruisers.”
“Never underestimate that existing cruisers love the idea of new ships,” Rosenberg noted.
According to the brand’s own internal marketing data, Virgin is expecting a third of its passengers to cruise with Virgin again, and two-thirds of people who said they wouldn’t cruise became interested once the Virgin brand was involved.
Internally, most of the debate centered on whether or not kids— more specifically, entire families—could come aboard. But since the Scarlet Lady is a midsize ship, the decision was made to leave kids behind. Now, Rosenberg said it is the No. 1 reason people are booking with Virgin.
Virgin declined to share exact figures on reservations, but said there was a “trajectory upwards” as far as bookings, travel agent interest and web traffic. “We’re feeling really confident in our occupancy,” said Rosenberg.
Doing promotion instead of damage control
Unlike its competitors, Virgin Voyages wasn’t in the headlines when the Covid-19 outbreaks began. Although it had been expecting to sail in April, Virgin only has one ship and wasn’t hit with overwhelming demands for refunds and itinerary changes that the rest of the industry faced.
“There’s a benefit to those cruise lines in the industry who have not suffered as much or at all from a negative PR perspective,” Golding said. “They can develop a narrative more quickly and more easily than those who have to market to dispel any lingering concerns.”
But it’s still a cruise ship—and an expensive one at that. Virgin Voyages is a premium experience when compared to the more family-oriented lines like Royal Caribbean and Carnival, which could become less appealing to consumers in the face of a recession. For comparison, this fall a five-night cruise with Virgin is $1,125 while a seven-day Caribbean cruise with Carnival starts as low as $339.
And as a brand, Virgin is not bulletproof. Although it’s currently aiming for space with Virgin Galactic, few remember past failed efforts like Virgin Trains in the U.K. or Virgin Cola.
For now, Virgin Voyages is in an educational phase, according to Rosenberg, making travelers feel comfortable with the brand at least until the end of June. The brand is also offering between $150-$500 of onboard credit through June 30, depending on the room selected. He expects to do more traditional advertising in the back quarter of the year when the first ship is in the water and the drinks are flowing.
“Even though restaurants have opened in Miami, friends are not yet ready to have dinner,” Rosenberg said. “We’ll have to make those choices that we’re comfortable doing. The job we have to do is tell people what measures we’ve taken.”
He also noted that of those who have already booked their cruise, he believes Virgin has a higher percentage of people under the age of 40 aboard the ship.
“If we think about who feels most vulnerable, it’s not the young people,” Hamilton said. “If they are able to reduce their capacity a little bit, that might happen by attrition.”