Cruise Holdings has combined its three cruise lines - Dolphin, Premier and Seawind - under one banner, Premier Cruises.

The company also confmned its acquisition of the Rotterdam V, which will be renamed the Rembrandt, bringing the company's overall fleet to six ships and approximately 5,500 berths and an annual passenger capacity of some 275,000 passengers. That makes Premier already the sixth largest cruise company in the world.

The new Premier, not to be confused with the old Premier Cruise Lines, has also consolidated its on-board, passenger service, finance and administration, and sales and marketing operations under one roof in Port Canaveral.

In addition, company president and CEO Lany Magnan said that Premier has identified 10 to 12 more ships that would fit its fleet and that the company was in active negotiations for "three or four" of these vessels.

"We could have 10 to 12 vessels in the next couple of years," said Magnan.

Opportunity

Premier is taking advantage of the capacity decline in what may be called the budget market. At its height in 1993, this market segment could carry more than 800,000 passengers. Since then, however, the passenger capacity in this market has declined to a little more than 300,000 in 1997.

Older ships were withdrawn as they were operated by smaller or weaker companies that were unable to compete on price against the mega-ships of the mainstream operators.

But Premier claims to be different. It is not operating its ships, which average more than 25 years in age fleetwide, as budget ships, but as classic ships offering price value.

In addition, Premier claims to be strong financially and to enjoy economies of scale with its six­ ship fleet now consolidated under one banner.

"Our market research bas identified consumer and travel agent preferences for a cruise line with smaller ships, personalized service and unique itineraries," said Magnan. "We will satisfy these needs with an elegant and intimate yet affordable cruise experience.

"And, our ships look like ships," Magnan continued, "not condos with propellers attached."

Strategy

According to materials presented by Premier Cruises, its studies show that travel agents and consumers want 800- to 1,200-passenger ships; personal service; and unique itineraries - with destinations the 3,000-passenger mega-liners can't or don't offer.

And, its studies show that among the key factors influencing travel agents' cruise recorrunendations are customer service, personal contact and product fit.

Hence, Premier will be positioned as offering outstanding personal service, according to Magnan, and to be responsive to the preferences for smaller ships and unique itineraries.

Magnan outlined the strong points of Premier to be as follows: personal attention, upscale - but not ultra-luxury, attractive pricing, unique itineraries, smart marketing to the trade, outstanding value, and a seamless air/sea program.

Magnan said that the size of the company's ships will enable it to offer service and food that the big ships cannot offer. For example, according to Magnan, the Seawind Crown buys fresh fish, fruit and vegetables in the Caribbean.

Tag Line: "You've Got Our Attention"

Premier is spending some $3 million bringing this message (above) across to travel agents and consumers.

Beginning in October, a print advertising campaign will run in newspapers in the top 25 U.S. markets, as well as in travel and consumer publications that target special segments such as families and honeymooners.

Television spots will run on cable in the top five metropolitan markets. In addition will be direct mail, a new brochure, and a web site.

Magnan also said that Premier has a top producers club of some 2,500 agents, and that its commission structure is highly competitive and includes paying commission on the entire air/sea package.

The line is also offering what it calls value-added programs for groups, co-op funds, and prides itself on having experienced district sales managers, according to Magnan.

Premier will paint the hulls of its vessels dark blue with a gold stripe, and add the line's name to the ships' bulls to help passengers identify its fleet.

The Big Red Boat, meanwhile, will be painted in a darker shade of red with a gold stripe.

"The color scheme is more in keeping with the maritime spirit," Magnan said.

Fleet

The latest addition to Premier's fleet is the 1,061-passenger Rotterdam from Holland America Line, which will be renamed the Rembrandt and launch in South America in December.

The Rembrandt will sail seven-day cruises from Sao Paulo during the winter months, and reposition to Mallorca during the summer for seven-day Mediterranean cruises.

Meanwhile, the Big Red Boat, the 1,180-passenger Oceanic, will continue to sail three- and four-day cruises from Port Canaveral.

Magnan is not afraid of competing with Disney Cruise Line. "Our prices will be substantially less," he said, "and we have a casino."

Also for 1998, the 840-passenger Seabreeze will first sail alternating seven-day Caribbean cruises from Miami; she then repositions to New York for two-day cruises to nowhere and five-day cruises to New England/Canada during the summer; before she moves to Curacao for a new progam of seven-day cruises for the 1998/99 winter months.

The 776-passenger Oceanbreeze sails seven-day Panama Canal cruises from Montego Bay, and the 742-passenger Seawind Crown continues her seven-day program out of Aruba.

The 1,146-passenger lslandbreeze will continue to sail summers in the Mediterranean where Thomson Tours fills the ship with British passengers, and during the winters, seven-day cruises out of Santo Domingo, which will be marketed jointly by Thomson and Premier.

Key

Premier Cruises already seems to be a solid organization with a well thought-out market positioning and a diversity of product. (Cruise Holdings only acquired an interest in Seawind Cruise Line in 1996 and majority interest in early 1997, and acquired Dolphin and Premier this year.)

Two questions remain:

What will be the impact of the similarity of names (and related product identity and associations) between the new and the old Premier? That's an unknown.

And, can old ships be sold as "classics?" They just might, if they are impeccably maintained, and can deliver the service level that Premier promises.