SeaDream Yacht Club has reported early signs of recovery in the business travel market but is predicting an even tougher 2010 for the cruise sector.
President Bob Lepisto, who was promoted to the role in January, said corporate bookings have been significantly down since September last year for the luxury cruise company, but that companies were starting to review their policies in a way that was unthinkable just six months ago.
“It really did slow down but now it’s showing signs of new life. It’s not going to roar back to where it was but it’s moving in the right direction,” he said. “I think 2010 will be tougher and 2011 will be the real rebound.”
Historically corporate sales have made up 30% of the company’s sales on ships SeaDream I and II but Lepisto admitted it is unlikely to be higher than 15% during 2010 because of the economy. The UK is the company’s third largest market, at around 10% of sales, following the US and Canada.
Head of UK and Ireland Ian Buckeridge added that late leisure sales were now picking up for this summer. The company has sold 84% of its stock for this summer, compared to 94% this time last year, because of the late booking trend. Bookings are tending to come in two to six months before departure instead of six to 12 months.
But he admitted tactical discounts were being used for certain dates, such as for a seven-night Egypt cruise on October 5, while partnerships are being sought with tour operators to sell fly-cruise packages. “We have got a couple of dates that are a challenge for us at the end of year. We are addressing these issues now,” he said.
The company is also offering 50% discounts on back-to-back extended itineraries instead of its traditional 10% for new Mediterranean bookings from July 11 to October 3 to stimulate demand further.
Meanwhile, the company refuted recent speculation SeaDream was up for sale but confirmed it had now been set up as a separate business because of bank lending issues linked to real estate for its holding company, Norway’s CG Holding. The news had led to rumours that CG Holding was in financial trouble.
Lepisto said: “We are not for sale but because of an issue relating to some real estate by the parent company it was decided to make us totally separate. The company remains 100% owned by Atle Brynestad.”
He added: “We have very little debt as a company, we don’t have new tonnage coming in during a down market and we are maintaining prices.”
Buckeridge added: “If we didn’t sell anything more from today we would still be in profit for the year.”
SeaDream I is currently in dry dock for upgrading, with a new Admiral suite being added in the area previously used for an on-board shop. SeaDream II has already had the suite added.