The weakening New Zealand economy isn’t putting a dent in demand for cruise travel, says the Australasian head of ultra-luxury cruise line Regent Seven Seas Cruises.
In fact, the battle to reduce inflation by pushing up interest rates is working for the company – every rate rise results in more bookings for Regent Seven Seas Cruises, with which the cost of a voyage starts around $1000 a passenger per night. For top suites – which can be more than twice the size of an average New Zealand house – prices start at $8500 a night.
Regent Seven Seas Cruises, billed as one of the world’s most luxurious cruise companies, caters to the top 1 per cent of the world’s wealthy travellers, says Lisa Pile, vice-president of sales in the Asia-Pacific region and general manager of Australia and New Zealand.
Wealthy Kiwis were now spending more than $150,000 each on some voyages, which were selling out fast as travel rebounds. The average age of a Regent guest is 55, and they are typically wealthy and without a mortgage.
“Every time there’s an increase in interest rates, it destroys people like me with a mortgage,” Pile said.
“But people who are retired love it because for the last 10 years, these self-funded retirees have earned zero interest on their money. So all of a sudden they’ve gone from zero interest to 5 to 8 per cent interest - they’re loving life.
“So every time there’s an interest rate rise, I get further bookings.”
During a trade and media visit function visit this week, Pile also revealed other New Zealand booking trends. They include:
The Seven Seas Explorer, which debuted in New Zealand waters last year, is the company’s favourite ship for Kiwis and will return to these waters in January next year. New Zealanders favour the more personal concierge-level service (which includes pre-cruise hotels booked) and they spend more on bookings than the global average. They also go on longer voyages and book further in advance than any other nationality.
“You lead the way when it comes to the amount of time you book ahead,” said Pile. “On average, you book 412 days in advance. You’re getting in first - you get the suite types of your choice.”
Pile is from a hotel background and said cruising was the opposite of that industry – top suites on ships sell out first.
“We sell top-down. When people say, ‘If you’re thinking about it, don’t think too long,’ they’re not doing a hard sell. They’re being honest with you, because you have to remember there’s limited inventory being sold around the world.”
She said there was a transition from luxury hotels to luxury cruise ships, partly driven by price. Italian hoteliers were reporting rooms that previously sold for €700 a night were now selling for €2500 a night, so cruises were looking like much better value.
“It’s all about me these days ... and I think that’s one of the lovely things about Regent, where you can personalise and customise your holiday because it’s all-inclusive.”
Pile said increasing airline capacity to this market would help drive demand for fly/cruise holidays.
Trish Ryder, director of You Travel Manly, said there were strong bookings and inquiries in the luxury cruise market.
“Regent Seven Seas is a popular option, particularly with the unlimited exclusive shore excursions that are included when you cruise with them,” she said
“Post-Covid, we are seeing more clients attracted to the luxury mid-size and boutique ships. New Zealand cruise customers are looking for value for money and like to have everything included. Regent does this very well.”
A Deloitte report this year found the luxury travel industry has rebounded to pre-pandemic levels and is now thriving, with a global market value of US$1.2 trillion in 2021 and a projected compound annual growth rate of 7.6 per cent until 2030.
Regent Seven Seas Cruises is owned by Miami-based Norwegian Cruise Line Holdings, which in its latest quarterly results reported record revenue, 33 per cent above the same period in 2019.
Forward bookings are higher than before the pandemic, despite higher prices, reflecting strong continued demand for travel around the world. Fit-out work is under way on the 55,000-tonne Seven Seas Grandeur, the sixth vessel in the Regent fleet. The 224-metre-long ship will carry 746 guests, with a crew of 548, and its Regent Suite will cover 413 square metres.
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
The company is now on the hunt for new investors.