Why don’t hotel chains have cruise ships?
It seems like the most logical expansion the hotel industry, however only Regent Hotels and Club Med maintains a ocean going presence. Hilton and Radisson have both tried and failed at taking on the high seas.
So why hasn’t Intercontinental, Holiday Inn, Crowne Plaza or Sheraton gone to sea. Well I think there are three big reasons why and these stop the land based resorts launching ocean going resorts. It is interesting to note that while acquiring P&O Princess, Carnival received competition clearance based on the idea that cruises competed with land based resorts and as such the company did not have a significant market share.
Current cruise brands such as Holland America, Carnival, Celebrity and Royal Caribbean have a huge number of fans, people know what they stand for and cruise accordingly. The very strength of these cruise brands mean that hotel brands may struggle to gain a place in the market.
It costs millions if not billions to make a successful entry into the cruise industry, even huge travel groups like the European TUI have partnered with traditional cruise companies to successfully enter the market. Hoteliers would have to invest significant amounts in an industry.
Huge hoteliers like the British Intercontinental Hotel Group, the company behind Crowne Plaza, Intercontinental, Hotel Indigo and Holiday Inn plus several more, operate on an ‘Asset light’ strategy where the company owns very few hotels but uses extensive franchising agreements. The exact opposite of cruising where each cruise line owns or charters its ships. These companies are not interested in having capital tied up in ships for years.
Hoteliers have mingled with the cruise industry however with Royal Caribbean being part owned by the Pritzker family, the founders of Hyatt. Radisson was previously present on the high seas when Carlson chartered the Radisson Diamond 1992, merging with Seven Seas Cruises in 1993 becoming Radisson Seven Seas until 2006 when Carlson rebranded the line after another of its hotel brands Regent. In 2008 the company was sold to Apollo Management meaning that although the line is named after a land based resort there is no ownership link. Regent is now owned by NCL.
Accor Hotels S.A. maintains ownership of Club Med 2, a sister ship to Windsurf of Windstar Cruises, the company is known to want to dispose of this ship however there are disagreements on price. I personally would rebrand it under their Sofitel or Pullman brand as a high end luxury product if I satisfactory disposal to Windstar cannot be completed.
In 2003 Festival Cruises, known as First European in North America, partnered with Hilton offering Hilton Suites on European Stars, European Vision and Mistral. Aimed at the North American market, it is unknown how this ventured would have proved in the longer term as it only lasted one year due to the lines bankruptcy in 2004.
Cruise Lines have invested in hotels and land based resorts with Cunard having operated several hotels and Carnival having also having owned a hotel and casino in the Caribbean. However for now it seems that cruise lines and hotels are focusing on their own markets.