Theresa Norton Masek | December 10, 2012 11:45 PM ET
The Windstar Resurrection
Windstar Cruises has endured some challenges over the past couple of years -- including a bankrupt former parent company, a new owner and the sour economy. But today, the three-ship niche line is reporting 60 percent higher sales for 2013 compared to this time last year, even as it completes an $18 million fleet wide renovation. What’s more, Windstar is looking to expand.
Owned by Xanterra Parks and Resorts, a subsidiary of Anschutz Corp., since May 2011, Windstar has rebounded from the closure of its former parent, Ambassadors International. Xanterra, part of the companies owned by billionaire Philip Anschutz, has invested in Windstar to help it flourish and grow.
“Philip Anschutz is not a flipper. He is not a guy that buys and sells,” said Windstar President and CEO Hans Birkholz during a press conference onboard the Wind Surf near Martinique earlier this week. “He is a builder of businesses. He obviously liked the product enough to buy the company."
According to Birkholz, one of the things that attracted Anschutz was the private yacht concept. “We offer the best of the private yacht experience to the cruise consumer, so they have that freedom, special attention, high level of service and casual experience,” Birkholz said. “But we also give some great things about the cruise business, such as safety, convenience and value. Put those together and we’ve created a unique experience.”
Naturally, there was some trepidation about booking Windstar after Ambassadors made plans to sell the company as it filed for Chapter 11 bankruptcy in April 2011. But with the quick, smooth sale and transition, the company kept on message, maintained the product and continued to grow.
Birkholz expects 2013 to be a great year. “For Windstar cruises, 2013 is going to be a terrific year,” he said. “We’ve had three years of growth. And 2013 is setting up to be an absolutely terrific year. We’re up 60 percent in forward bookings for 2013, and several sailings are already sold out. I think we’re in a great, great position.”
This past week Birkholz invited members of the press and leaders of several travel agent consortia to see the flagship 310-passenger Wind Surf, which was totally transformed, with new, brighter public spaces and accommodations. The company has hired an executive chef -- a new position -- and is revamping menus. Things are going so well that expansion is on the horizon.
Birkholz said the line has looked at purchasing other ships, including the Club Med 2, sister ship to Wind Surf that formerly was Club Med 1. “We have significant expansion plans for the brand,” he said. “We have a great new owner who wants to invest in our business. He thinks there is an opportunity for Windstar to be significantly bigger than what it is today. We have approached companies like Club Med and said, ‘look, you have 18 land resorts and one ship. And we know from your statements, you’re in turnaround renovation mode and you need some cash. We’re happy to give cash for your yacht.’ But they said no. We’d love to see Club Med 2 in our fleet but you have to have a willing seller.”
Windstar also is looking at yachts and small ships that don’t have sails, a signature of Windstar as it is today, but isn’t looking to acquire any other small-ship company. “We would look at yachts without sails, but they have to deliver,” Birkholz said. “We believe Windstar has enough brand equity that there’s no need to buy another brand. We’re only interested in hardware, not another brand.”
What about newbuilds? “For the small luxury ship market, newbuilds are probably out of the question,” Birkholz said. “The cost of a newbuild makes it prohibitive to build a 250-passenger luxury cruise ship and expect people to pay the rates to enable the investor to get a return.”
Nevertheless, new programs are in the works, such as theme cruises, and Windstar already offers commissionable drinks and shore excursion packages. Itineraries are being enhanced to make the most out of smaller destinations its ships can visit. The line is considering returning to some of its former destinations, maybe even Tahiti, although Birkholz won’t confirm that.
As Birkholz plots Windstar’s growth path, it’s clear that much focus will remain on the travel agent community, which has helped Windstar prosper. “Travel partners are our frontline sales team, they’re our ambassadors,” he said. “They represent us, so they are critical to our growth. If we do not have a strong travel agent foundation, this business is not going to go anywhere. They are an integral part of the whole process. That’s why we made an investment in a field sales force and it’s why we have a very competitive commission structure. We’ve got to make it worthwhile for people to work with us.”
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