It has been two years since Royal Caribbean Cruises bought the Spanish tour company Pullmantur, and the new acquisition has been busy expanding its cruise offerings with new ships and pursuing new markets.
Iberocrucros, flush from the recent merger of its parent company with Carnival Corporation, is ready to build on its Spanish-speaking strengths, branch into the Brazilian market and hold its own against rivals Pullmantur, MSC and Costa.
Competition is plentiful, but the rival that has Pullmantur looking over its shoulder is lberocruceros. Although Pullmantur is far ahead, lberocruceros has the potential to hone in on the same market, said Bernardo Echevarria, Pullmantur's vice president of sales and marketing.
What differentiates Pullmantur is it operates as a tour company rather than a cruise company.
"We are not a 'normal' cruise line because Pullmantur started as and is still a tour operator," said Echevarria. Ten years ago when Pullmantur was looking for new products, cruising seemed a natural outgrowth, since cruises would tap the same customers who were already booking other packages.
100 Percent Spanish Pullmantur has maintained its edge over competitors by making their cruise package "an almost 100 percent Spanish product," as Echevarria put it. The other cruise lines for the most part still offer a generic "international" cruise product not geared toward any culture in particular.
Although the market has been growing steadily over the past IO years, it still has huge potential, Echevarria said. Ten years ago the total market for cruises was no more than 40,000 to 50,000 passengers annually, Echevarria said. Today, with nearly 500,000 passengers, Spain is the fourth largest market in Europe. Even France, with 61 million inhabitants, is behind Spain, whose population is 41 million. Pullmantur carries approximately 250,000 cruise passengers, giving it a 50 percent share of the Spanish market.
"As we're increasing our fleet we have to start looking at new markets," said Echevarria. "So naturally our new potential is Central and South America. So we have projects over there. We are already developing distribution channels, and we will have a product in Mexico."
The Mexican product will launch at the end of this year or the beginning of 2009. Future growth will be driven by ships that Pullmantur will get from sister companies Royal Caribbean and Celebrity. In 2009 and 2010, Pullmantur expects to receive two additional ships, and by 2010 the fleet will total nine ships.
Gaining an Edge
At lberocruceros, Alfredo Serrano, general manager, said his company doesn't really aspire to its market share. Rather, lberocruceros will gain the edge not through volume, but through more flexible offerings, catering to a different segment of the market.
"Our fleet has been more modem than Pullmantur, though they are quickly modernizing their fleet," said Serrano. "I would say that we are more (Spanish) - even though if you look at their customer profile, although the majority are Spaniards, they do take on passengers in other ports, which I think isn't such a strong difference, but is a difference. "Then of course they have this all-inclusive concept which we don't believe in."
All lberocruceros ships do seven-day cruises, except in Brazil. People can combine itineraries for a two- or even three-week cruise. One ship is based out of Barcelona, doing roundtrip seven-day cruises,\Serrano said. One operates out of Venice, sailing fro Venice to Piraeus one week, then cruising back the following week. A third ship is based in Copenhagen, doing one week Copenhagen to Helsinki, the next week Helsinki to Copenhagen, and then another Copenhagen to Copenhagen the third week, that one going to the Norwegian fjords.
In the winter, he said, one ship will be positioned in the Caribbean and two in Brazil for Brazilian customers in conjunction with a tour company in that country. In the Caribbean, Iberocruceros will run roundtrip cruises from Cozumel. On the Caribbean cruises "we will be working with Spanish customers," Serrano said. "O the Brazilian cruises we will work with Brazilian customers."
Serrano is optimistic about lberocruceros' strengths: "Our ships are not as flashy or as big as some of our competitors, but they're still very modem and very good ships," he said. "But the key is the service. It's basically the software that we provide rather than the hardware - the fact that our itineraries are very much targeted to what Spaniards want to see and obviously things like food onboard, entertainment, the friendliness of the crew and the fact that we can have good rapport between crew and passengers."
The crew also finds it rewarding, he said, because they can communicate in their native language. Customers have been known to stay in contact with crew members after their cruise as well, he said, "so it makes our job easier because we believe our crew is much happier because of that." Most of Iberocruceros' passengers are from Barcelona and Madrid.
lberocruceros has a three-ship fleet made up of two vessels: the 1,244-passenger Grand Mistral and 834-passenger Grand Voyager, plus the 1,486- passenger Celebration from Carnival Cruise Lines' fleet, which was transferred to Iberocruceros in April after remodeling. It will get a fourth ship next year, said Serrano.