Friday, April 19, 2013

The Beautiful Sea Princess ... a Great Business Model

Having just spent a wonderful 40 days on Princess Cruises Sea Princess, I'm very impressed with the business model employed by this company.

The Sea Princess is one of 17 cruisers owned by the Princess Cruises company and has been fine tuned into a slick, efficient operation.

Cruise liners are small cities that float. They have all the services found in a small township and more. These services that not only include top-rated medical, food and entertainment services, but the behind-the-scenes activities like compacting and preparing waste for recycling, desalinating sufficient water to accommodate a very high consumption rate, full laundry facilities, and a functional publishing centre.

So, what is the business model. It goes something like this, you:

  1. find a large group of passengers who have a sufficiently high disposable income to pay for the cruise, buy from the ship's boutiques and bars, and splash out on tours at various destinations
  2. make this group a "captive" audience for a given period
  3. employ your staff using the legislation of a country that allows relaxed industrial relations policies and you hire most of them on 10 month, casual contracts (obviously not Australia)
  4. provide a range of top entertainment and plenty of activities to keep people busy on "sea days"
  5. sel, sell, sell ... and then sell again
When you have paid for your cabin, or stateroom as they are called and your food, all you need worry about is anything you buy on board of off board the ship.

Unless you become ill and need medical attention, you really don't need to buy anything on the ship. However, if like me, you like beer and red wine, you need to pay your way at one of the bars. A 375 ml standard Australian beer was $5.50 which seemed a bit steep, but it included a 15% gratuity so that tipping wasn't necessary. (Nobody ever gave me a tip!)

Some of the tour costs were higher than I expected and we had to pay visa fees for countries we entered. At Shanghai this was an enormous $140 AU each, whether you remained on board or walked into town. (the photo above is of the Sea Princess berthed at Shanghai)

Everything from start to finish was remarkably well organised and the whole operation run as well as a Swiss watch, to the credit of Princess Cruises and their Sea Princess team.

Unfortunately, now that I'm back in my real world, I won't be able to drop my towel on the floor and expect an attractive Thai girl to change it for me. But hey, it was good while it lasted.


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