While traveling aboard Viking Ocean Cruises' new Viking Sea along the line's equally new itinerary - Into the Midnight Sun - I had the privilege to exclusively interview the company's founder and chairman, Torstein Hagen, and senior vice president, Karine Hagen. These two are father and daughter, respectively.
In fact, today the line is celebrating the five inaugural Norwegian calls that were made during our trip to Tromsø, Honningsvåg, Bodø, Brønnøysund and Ålesund. Speaking at a Viking Explorer Society cocktail party, Hagen said, "Sir Richard Branson says space is Virgin territory. I say Scandinavia is Viking territory. No other cruise line can show you this part of the world like Viking can. I have known for years that there is nothing better than Norway in the summer, and I am happy to now be able to share the beauty of my native Norway with you, our Viking guests." You can also witness the Norwegian experience we personally enjoyed alongside the chairman in video here.
Royal Viking Line to Viking Ocean Cruises
When I privately discussed with the Hagens just what it took for Viking to get to where it is today, Norway and beyond, Torstein recalls how he has come full circle. From operating Royal Viking Line back in the day to the present brands of Viking River Cruises and Viking Ocean Cruises saying, "It wasn't quite meant like that, but it turned out like that. We're now 19 years into the cruising business … Time does fly. I must say it's been quite a pleasure to be able to have this."
Describing his time at Royal Viking Line in more detail, he added, "The background was I was boss, CEO of one of the two ownership companies, and I pushed for the lengthening of the ships in 1979 because they were too small and they had 525 passengers. And it was very hard to make money on that because it meant that you had to have such high prices, and you see that with some of the so-called luxury ships today. When they have that small size they have to have astronomical prices, and nobody likes to pay astronomical prices.
"So we then moved from 525 to 740 passengers and then had three ships after each other … it sounds like small additions at the pace we are now going. But then came the oil crisis in '79. '80, '81, '82 were bad years - low load factors - so it took a time to make them really profitable, but at least I'd been able to make them really fairly profitable at the time. And of course it would've been a great base, and ironically out from Royal Viking Line came Crystal, Seabourn … So lots of things have come out of Royal Viking Line."
Fast forward to today, and Torstein said, "I really didn't have any intention of getting back into the ocean cruise business, but then we saw what strong position we have in the U.S. market on the rivers and what brand recognition we have. I thought it was a logical thing to do, and in 2012 no cruise line had the guts to order more ships. And we struck and got a good deal at Fincantieri, and here we are." Karine also added, "Oceans was somewhat in response to requests by guest as well who wanted to go to destinations that we couldn't bring them by river: Rome, Bergen."
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Viking Ocean Cruises' Market Position
On the sea, Viking is really crafting a new cruising category, and Torstein concurred saying, "One tends to classify the ocean cruise market in contemporary, premium, upscale and luxury. I think there's another dimension to it which is destination-oriented, and I think we are destination-oriented. Many of the big guys say, 'Don't worry. The ship is a destination.' I think that's the case if you're on the mega-ships. You have no other choice. And that's why when we designed this ship, we had to strike a balance between size small or size big. Size means economics for the company, and it means price to the customer. And certainly the big guys, big ships, can offer a low price, but it's not a good experience.
"So, we found that being less than a thousand people, passengers, was a good spot to be. It also has something to do with the ambiance because when you talk to the guests who are on board here now and you ask how is it compared to your river cruising experience, first of all they say it's different in some regards and then they say what are the benefits. Of course, here there are more things to do, more comfortable maybe, but then they say, of course, on the river ship there are 200 people, or 190, and you get to know the other people more quickly. But at least we are very focused on what we're doing."
And just was is the demographic Viking targets? Torstein explained, "I think we like to pride ourselves in knowing well who the customers are. It's the 55-year-old-plus English-speaking couples who are curious people that have an interest in history, geography, culture. They've worked hard. They have a reasonable amount of money. They are not necessarily extremely well off, but they know what they want. And it think I know these people. They've worked hard. They now have a chance to get to see the places they've only ever read about or dreamt about because I think many of the guests we have here are quite normal people. Many have been school teachers, college professors; they continue to stimulate their curious minds."
Drilling down even farther to pinpoint Viking's market position, Torstein added, "So, where are we clearly different? We are a new ship of a size that very few other people have." He cited Oceania Cruises as a competitor that has tested various ship capacities and believes Viking is at the right size.
But specific omissions onboard Viking are also crucial to the experience. "And then I think it's the things we are not," Torstein explained. "We have no other cabins than with balconies, but the main thing [I] started my comments about 'no's with [were] the casinos. One thing that strikes you about a Viking ocean ship is I think how quiet and peaceful it is: no art auctions, no photographers, no casinos. The casino thing was the main thing because when you've been in the cruise industry, it's hard to imagine that you build a ship without a casino. And they say, 'Oh it's such a big revenue earner.' I'm not even sure that's true. I think it's just moving on without consideration that people say we have to have a casino too.
"But I think the fact that we don't have one is one of the big differentiators. And of course we are no smoking (you can go on the deck outside where you can smoke a cigarette or cigar), but it's no children, no waterslides, no umbrella drinks."
Company Values
When asked about the family nature of the company, Karine said, "I always made a promise to myself that I would not work with or for family, but there came a time when that was difficult to hold onto. I think there are plusses and minuses of family companies, and, as we've said in the past, we're a privately-held, professionally-run company. We've stayed away from calling it a family company. I think people should earn their positions, and I hope I have... earned my position."
Karine continued to emphasize the Viking guest experience as the line's focus: "But I think when we're as privileged as we are to deliver experiences to this type of demographic - they're adult thinking educated people, as we've been talking about - and many of them for the first time are introduced to cultures that are very different to their own. I think particularly when it comes to exposing them to get to places like Russia and China and Cambodia and Vietnam and exotic places like that, I think we have the opportunity to dispel a lot of myths.
"A lot of my life was spent in Russia, and I know just how much that is a misunderstood country, and I firmly believe that our industry, that the travel industry, has the power to do a lot of good, particularly when we're exposing exotic countries to each other. If we can help expose Americans and Brits and Australians to cultures that they otherwise would only understand through press, which often construes things to sensation, then I think we do good for all actually.
"So, that's why I've been very excited about being a part of this and why I think I can help make some change to how we develop our experiences, and that's what I spend most of my time on, bringing the cultures onboard and ashore in a different way, not just delivering the expected and the iconic but going beyond and delivering what we call the Viking Way (Local Life, Working World and Privileged Access). We all like to travel in different ways, and we all like to have stories to tell when we return. I think the more we can categorize our experience into these three different bins the more interesting experiences and stories we give our guests when they come back home."
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Consumer Value
Of course, Viking offers an amazing price point for what it altogether offers consumers, and Torstein stressed, "The thing that differentiates ourselves from competitors … is what incredible value we are. It's not immediately obvious to everybody because so much is included in what we offer. But when we adjust for that … we have a per diem which is at the Holland America Line level, and I think we have a product, with a larger cabin than Holland America Line, that I'd say is better than the Azamaras and Oceanias."
The difficulty is perhaps in conveying its position. "It should be a winning game," Torstein said. "So, I think our main challenge is to make sure that we have a big marketing budget and we send out a lot of stuff to potential customers. I think we probably need to do a better job on the travel agents to make sure they understand what real value we have. We will come out with a different way of looking at pricing, now more transparent … [that is] being changed over the next two, three months. And then people will see more clearly what we have, and we'll spell out the value of all the included services. So, I think that should help convince them."
Demographic Integrity
As a millennial, I also asked if the line might ever expand its marketing to more specifically include my generation, but Torstein doesn't think so, saying, "We stay honest to what we are. I think the product is good for anybody, but I think we will continue to define it as what it is, no doubt about it." Karine also added, "I think organically it's generating interest, but it's not our target."
As to why it will stay on course demographically, Torstein explained, "It's also part of what we offer, what anybody should offer, is you travel with like-minded people. The service and the destinations and all that is excellent for everybody, as are the river cruises. And if one should do it, it would be under a different brand, but I think we have so much to do with the customer base we have, so I don't think we're interested in any more brands. We have one brand."
The Future of Viking
As it stands now, Viking has plans to build six ocean ships, but Torstein foresees a future beyond. He said, "There's a picture of me at the delivery of one of the ships from Fincantieri, and it shows both my hands in the air. So, if you count your fingers, it's ten. There's no magic in such a number. I think six is a good first objective, and we have to make sure we get that right. But I'd say there's more opportunities."
From a destination standpoint, Torstein added, "When it comes to itineraries you know about our world cruise which has sold so phenomenally well. We're close to 70 percent sold, full cruise only. So, I think that's impressive. We are starting in the Caribbean. Of course, in the Caribbean - what makes us different there - it's hard to differentiate much on the itineraries. We do one thing though and that is we don't start in Miami or Ft. Lauderdale. So, we start in San Juan, and that means you don't have to be in bad weather from Miami for a day and a half or two days. When people really want to be in the Caribbean, they want to be in the sun right away, and that means when you start a little bit farther south … there are interesting spots you get to.
"But I think again the main thing is the ship because there are grownups like me who want to be in the sun during the winter time, and I think if they can avoid children, noise, all that, then I think they would rather go with us and pay for that. And they can afford it."
Beyond the Caribbean, "I could imagine that you could have a ship stationed in the far east and then you could say it could do Australia, New Zealand and then go up to Japan and swing around there," Torstein mused. "I could see that happen, but that probably wouldn't be until ship number six."
And what about Alaska perhaps? "I think it would be logical quite frankly," he said. "Now there are many people who are there. I think probably the size of the ship is quite good for Alaska." In fact, he thinks an itinerary from the Alaskan mainland across the Aleutian Islands and over into Russia is particularly intriguing.
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