James Shillinglaw | March 30, 2015 4:18 PM ET
Invasion of the Viking Fleet!
Tor Hagen is riding high! The chairman and CEO of Viking Cruises just named 12 new river ships in Amsterdam last week, including 10 more of his signature 190-passenger Viking Longships for European rivers.
I attended the christening, which featured 12 godmothers from Viking’s worldwide staff selected for their length of service with the company. It was a special event, showing the devotion Hagen has for his staff and from his team. Viking now has 40 Viking Longships sailing the rivers of Europe, all launched in the last four years.
This past weekend, Viking also took delivery of its new oceangoing vessel, the 930-passenger Viking Star, which aims to revolutionize the popular premium segment of the cruise business.
The ship will be named in Bergen on May 17, Norway’s Constitution Day, a fact that Hagen clearly relishes as a proud Viking and native Norwegian. Indeed, word is the christening event is going to attract up to 20,000 people in Norway’s capital.
Viking has truly come a long way since Hagen launched it in 1997 with four Russian river vessels. Over the years, Viking twice faced major financial challenges that could have put the company out of business. But Hagen persevered and today presides over the largest river cruise company in the world—and easily the most recognized here in the U.S.—with 64 river ships. According to Hagen, the company hosted 250,000 guests on its river ships last year alone.
Of course, having spent $600 million on marketing here in the U.S. over the past few years, including sponsorship of Masterpiece Theater’s “Downton Abbey” and TV commercials on CBS News shows, Viking probably shouldn’t be surprised at its brand awareness. “We are not surprised that river cruising has grown so much, because we are causing it to grow,” says Hagen. “We have 50 percent market share, spend a lot on marketing and we have a fantastic product.”
Indeed, Hagen is quick to point out that Viking has grown 30 percent per year in each of the last five years, while his competition has grown only 7 to 8 percent per year. He has done that by focusing on a developing a high-level standard European river cruise product and targeting a distinct customer base.
“We don't think hardware is most important thing…but that’s not to say we don't have the best hardware…we know we do,” Hagen says. “You can judge for yourself. There are different styles and tastes. For our type, the main point is we are appealing exclusively to people who speak English in the U.S., U.K. Australia and North America.”
PHOTO: Hagen: “We are not surprised that river cruising has grown so much, because we are causing it to grow.” (Photo by James Shillinglaw)
Specifically, Viking’s market is the 55-plus age group of customers who are into a “thinking person’s cruise, rather than a drinking person’s cruise,” as Hagen has often said with a swipe at oceangoing cruises (though now he himself is heading into such cruising).
Viking also has succeeded with a unique fleet of modern, sleek, spacious river cruisers that provide the line with some specific advantages, according to Hagen. “We don't try to fill up that space with things you don't need,” says Hagen. “We like light, we light air. Our customers know exactly what they will get…nothing more, nothing less…When we designed these ships it was very important to utilize every square inch of the ship.”
For example, Viking Longships have a square bow that effectively allows them to put in five or six more cabins, according to Hagen, as well as the Aquavit Terrace, an outdoor/indoor space for dining and watching the river scenery go by. There’s also another complete deck below the restaurant for the crew, and the kitchen is positioned near the bow. “We’ve been able to use the space so much more efficiently,” says Hagen. “We put 190 people on our ships where the others have 160, and not because we have smaller cabins.”
Viking Longships’ diesel electric propulsion also means there is much less vibration in the stern of the vessels, so Viking can put its top Explorer Suites in the stern. Other river cruise companies put in alternative restaurants, bars or even pools. With more passengers, Viking also is able to offer lower rates.
With a 97.8 percent guest satisfaction rate, Hagen maintains his product meets and exceeds expectations. “I think we have a great product, great staff, great prices,” Hagen says. But Viking’s hidden secret weapon is that it now owns 70 docking stages along the rivers of Europe. “Until now we have been accommodating other [river cruise lines], but if there's a line, we know who will get served first,” Hagen says.
The other breakthrough in the Viking Longships design is the way the corridor is placed, not exactly in the center of the ship. This allows Viking to have a set of real suites and balconies on one side, though the staterooms on the other side are quite spacious as well. It also provides Viking with a larger choice of accommodations at different price points.
With 40 Longships, I originally thought Viking was done with its massive building program. With Tor Hagen, however, you can’t be certain of anything. At the press conference during this year’s christening event last week, he unveiled plans for six more Longships, as well as options for another 18.
And that might not be the end of the story. At the christening dinner later that same night, I ran into Bernard Meyer, chairman of Meyer Werft shipyard in Papenburg, Germany. Meyer’s Neptune Werft shipyard in Rostock, Germany, has built all 40 of the Viking Longships. When I asked him about the six new ships, he only responded with one cryptic word: “More.” He’d apparently spent the evening sitting with Hagen discussing more ship orders.
Still to come for Hagen and Viking, of course, is the new oceangoing vessel, as the company’s attentions shift, for the moment, to the high seas. Hagen says 85 percent of the inventory for the new Viking Star has already been sold for 2015, and 49 percent has been sold for the second ship on order for 2016. Look for at least two or three more oceangoing ships to come.
It’s all just another year in the life of Tor Hagen, the ocean cruise executive (he used to run Royal Viking Line) turned river cruise maven turned ocean cruise maverick. As I’ve said in the past, I wouldn’t bet against Tor doing anything he sets out to do. He remains one of the most fascinating, brash, confident and entrepreneurial travel executives in the business today.
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