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 NEW YORK, Sept. 24 /PRNewswire/ -- The Chandris Cruise Division and Overseas Shipholding Group Inc. (NYSE: OSG) today announced the signing of an agreement to form a joint venture. The joint venture company, to be called Celebrity Cruise Lines, Inc., will own and operate six cruise ships and will continue to be marketed under the trade names of Celebrity Cruises and Fantasy Cruises.
 Chandris will contribute to the venture its six cruise ships, including the Zenith built in 1992, the Horizon built in 1990 and the Meridian totally rebuilt in 1990. OSG will contribute approximately $220 million in cash that will be used primarily to finance a planned expansion of the fleet. Celebrity Cruise Lines Inc.'s assets will be in excess of $800 million.
 The closing of the transaction, subject to certain conditions, is scheduled for the end of October. Celebrity Cruise Lines Inc. will function as an equal joint venture of Chandris and OSG. There will be no change in the day-to-day management and operations of Celebrity Cruise and Fantasy or in existing cruise schedules.
 John Chandris, who will continue as chairman of the cruise lines, commented: "I am very pleased with the agreement reached with OSG. They are partners of the highest caliber and we share a common outlook on many matters. I am convinced the new, enlarged company, building on the success of Celebrity, will shortly be able to take advantage of some interesting opportunities."
 Michael Recanati, senior vice president and treasurer of OSG, said: "We are delighted to be associated with the Chandris Group in this venture. Chandris runs one of the finest cruise operations in the world. Celebrity Cruise Lines' balance sheet will be among the strongest in the cruise industry. Its significant resources will enable it to expand its fleet and enhance the Celebrity franchise. For OSG, this venture represents a major commitment to the cruise business, which we believe offers tremendous opportunities for growth well into the next century."
 OSG, one of the largest bulk shipping companies in the world, owns and operates a fleet of 65 vessels with an aggregate carrying capacity of approximately 6.1 million deadweight tons. Its shares are listed on the New York Stock Exchange.
 Chandris is a diversified, worldwide company with an important presence in international tourism. The company's leisure group operates the fifth largest cruise vessel fleet in the world with seven passenger cruise ships in the Americas and Europe. In addition, the group has five hotels in the leading travel destination of Greece.
 The leisure group is part of the Chandris Group of Companies, which includes a fleet of tankers and dry cargo vessels and extensive other businesses on the continent.
 The company has over 70 years of ship-owning experience. Its cruise business dates back more than thirty-five years. With its long history and experience in these related businesses, the company has earned a reputation for providing quality hospitality services to its customers.
 Experienced Multi-National Management
 The Chandris management staff is comprised of a group of executives with diversified national backgrounds and experience. The management style of its European executives has been successfully blended with those of their American counterparts. Each group brings its own understanding of their markets together with strategies for generating the highest level of demand and profitability.
 Worldwide Scope of Operations
 Chandris has established a highly visible presence in all the leading Western world markets. This gives it a balanced international approach to its business and the ability to capitalize on opportunities which emerge in different parts of the world. Flexibility also results from this international orientation, and the company is able to shift emphasis in its operation and marketing in line with the world economic and currency fluctuations.
 Maritime Expertise
 The Chandris tanker and dry cargo fleet operations are an important supporting base for the cruise passenger business and provide advantages not found in most other cruise lines. The extensive Chandris maritime operations provide technical operating expertise.
 Its knowledge of the requirements of ship refitting and refurbishment is extensive and the company has handled more of these operations than any other cruise line.
 Management of the Vessels
 The Chandris cruise fleet operates under two brands: Celebrity Cruises and Fantasy Cruises, comprising seven vessels with a combined tonnage of 204,506 providing a total of 7,630 berths. Both brands are managed by the Chandris Group. North America Executive offices are located at 5200 Blue Lagoon Drive, Miami. A New York office, located at 950 Third Avenue, is headquarters for marketing, promotion and public relations.
 To fulfill and follow-up on all these tasks, the Chandris Group has an established infrastructure:
 Supervised from Miami, the sales force is comprised of four regional sales directors and 30 district sales managers who cover the entire United States and Canadian travel agency market. At present, there are approximately 11,000 travel agencies actively selling Chandris programs. In addition, to handle the growing meetings market, there is a director of corporate and incentive sales. The Chandris Group has also formed alliances with tour operators to reach another universe of travel agency affiliates.
 Outside of the United States, the Chandris Group has established a network of general sales agencies throughout Central and South America as well as the Caribbean islands. The areas are overseen by the director of Latin American and Caribbean sales.
 Advertising campaigns are formulated in conjunction with major American advertising agencies. The primary vehicles for advertising are national and regional newspapers, magazines and radio stations, as well as targeted mailings. Publicity programs and a comprehensive communications strategy are developed and executed with the counsel of a worldwide public relations company. Collateral materials are designed in conjunction with an award-winning design firm.
 Through the company's computerized reservation system, travel agents in all parts of North America can learn availability and secure reservations for all cruises. Internally, the reservation system allows Chandris to maintain inventory control for each vessel and provides management information reports that aid the design-making process for the marketing and sales departments.
 Maritime Operations
 An extensive technical department oversees the maintenance, refurbishment and refitting of all the vessels. Chandris has refit and rebuilt some of the most famous passenger ships. This expertise, coupled with its experience in new builds, has positioned the technical department as one of the best in the industry. Hotel, purchasing and port operations are consolidated so as to provide for the economies gained by scale.
 On-board facilities and passenger victualling are handled through competitive contracts to allow concentration on the marketing and operation of the vessels. This policy ensures that passengers are offered above average quality while providing Chandris with fee income and flexibility in the management of its operations.
 Crewing of vessels is contracted by Chandris in Greece. All officers are Greek, while the crew includes staff of various nationalities. Historically, the turnover of officers on Chandris vessels has been low, providing stability and continuity to the fleet.
 Ship Tonnage
 Zenith 47,255
 Horizon 46,811
 Meridian 30,440
 Both the Horizon and Zenith were built by Joseph Meyerwerft Gmbh and placed into service respectively in 1990 and 1992. They operate under Liberian registry. The Meridian entered service in 1990 upon completion of an extensive rebuild and conversion. The Meridian operates under Bahamian registry.
 Brand Positioning
 The Celebrity Cruises concept and product line was developed with the objective of providing Chandris with an entry into and significant share of the growing premium sector of the cruise market. Its competition is Holland America Line and Princess Cruises.
 The product was designed to appeal to the following types of prospective passengers:
 -- those who have tried the new mass-marketed ships and have been dissatisfied with the quality of the service, size of their stateroom, or on-board atmosphere;
 -- new cruise passengers who desire high quality and do not want to pay grossly inflated prices;
 -- sophisticated cruise passengers who are well informed, can recognize and appreciate quality ship design;
 -- any passenger who wants to be cared for and looked after by a well-trained and experienced staff, motivated by the pride they take in their product.
 Celebrity Cruises has been positioned to take advantage of growing interest in premium cruises resulting from favorable demographic and income trends that will be occurring in the 1990s. Though in recent years, real per capita income of the average American has grown only modestly, the number and the proportion of households that have moved into the higher income group is significant. Whereas in 1980 only 18 percent of U.S. households earned $50,000/year or more, by 1990 this segment had moved to 25 percent. In addition to a household's total income, the amount of discretionary income available is important for travel marketers. Here also, the trends are positive. With a higher proportion of the population now aging and moving into the 45 plus group, household and fixed responsibilities diminish and discretionary income rises. Census Department data show, for example, that discretionary income per household among those in the 45-65 category is almost a third higher than households in the 25-44 age group.
 The Celebrity product, as contrasted to the Fantasy line, has targeted its marketing to this growing and important upscale market.
 Fleet Deployment
 Caribbean Product: The Celebrity fleet currently operates one vessel on a year-round program and deploys two additional vessels during peak season in the Caribbean.
 Eastern Caribbean -- Zenith from Fort Lauderdale: Seven-night cruises to San Juan, St. Thomas, St. Maarten and Nassau depart year- round, alternating Saturdays.
 Western Caribbean -- Zenith from Fort Lauderdale: Seven-night cruises to Montego Bay, Grand Cayman, Cozumel, Playa del Carmen and Key West depart year-round, alternating Saturdays.
 Deep Caribbean -- Horizon from San Juan: Seven-night cruises to Martinique, Barbados, St. Lucia, Antigua and St. Thomas departing every Saturday (January to April and October to December).
 Ultimate Caribbean -- Meridian from San Juan: Ten-night cruises to Aruba, La Guaira, Grenada, Barbados, St. Lucia, Martinique, St. Maarten, and St. Thomas depart designated Fridays (January to March and November to December).
 Eleven-night cruises to Montego Bay, Aruba, La Guaira, Grenada, Barbados, Martinique, Virgin Gorda, Tortola, and St. Thomas depart alternating Mondays (January to March and November to December).
 Bermuda Product
 The Celebrity fleet operates two ships during peak season to Bermuda. In addition to the New York departures, the Meridian has scheduled departures from the East Coast cities of Baltimore, Boston, Charleston, Norfolk, Philadelphia, and Wilmington.
 Horizon from New York: Seven-night cruises to Hamilton and St. George departing every Saturday (May to October).
 Meridian from New York: Seven-night cruises to King's Wharf departing every Sunday (May to October).
 Marketing Strategies
 Starting with the Meridian and continuing with other ships added to the Celebrity line, the company's marketing strategy has and will continue to:
 -- position Celebrity as an upscale cruise product that delivers a high quality shipboard environment, elegant European service and superior dining;
 -- build a product image that appeals to cruise passengers who prefer a refined and casually elegant experience, as opposed to the glitzy and superficial amenities of mass market cruises;
 -- appeal to the intelligent and experienced consumer who appreciates a quality product at a fair price.
 In executing the above strategy, sophisticated dining has been used as an icon for our standard of quality. Menus developed by French chef and restaurateur, Michel Roux, have been promoted extensively. A measurement of the effectiveness of this strategy is demonstrated by Ocean and Cruise News survey selecting Celebrity cuisine as the best in the industry.
 Overcoming Introductory Barriers
 The introduction of a totally new cruise product line is an ambitious undertaking. Barriers with travel agents must be overcome, such as the lack of an established track record for the cruise line, their reluctance to book a new and untried product, and a lack of understanding as to which type of passenger is best suited for the product.
 Building awareness with the consumer can also be expensive and time consuming. Competitive lines spend heavily in advertising, including television, making it difficult to build consumer loyalty.
 New ships also face a problem as word-of-mouth is limited in the early months, since the cumulative number of past passengers is still small. In recent research conducted among Celebrity passengers, favorable recommendations from friends and relatives were the major reason for selecting a Celebrity ship. The combined total of recommendations from travel agents and friends/relatives indicates that a strong base is being built for the Celebrity product.
 Chandris management understood these barriers, and recognized their significance for the first of the Celebrity ships. As additional ships were added to the line, these barriers were less of a factor. The overwhelmingly positive response from both travel press and agents to the Zenith, is evidence that Celebrity Cruises has gained widespread recognition.
 Ship Tonnage
 Amerikanis 20,000
 Britanis 26,000
 The Azur 15,000
 The Victoria 19,000
 All Fantasy ships have undergone recent and/or continued refurbishment. The ships operate under Panamanian registry.
 Brand Positioning
 Fantasy Cruises is positioned as a budget cruise product providing exposure to an entry-level, price-sensitive audience. Competition comes from Dolphin, Commodore, Regency, and the older Carnival vessels. The product was designed to appeal to the following types of prospective passengers:
 -- new cruise passengers who are looking for an affordable vacation;
 -- experienced cruise passengers who recognize the quality that a Fantasy cruise provides at a reasonable price;
 -- cruise passengers who want to experience classic cruise vessels;
 -- cruise passengers who enjoy a casual experience without the obligation to dress formally.
 Fantasy Cruises has targeted its product to households with modest household income of $25,000 to $49,000 per year. In 1990, over 33 percent of U.S. households were recorded as falling into this income range.
 Consumer spending patterns by this group indicated that their fixed financial responsibilities limit their spending capability. Their emphasis is on price shopping and high value.
 In order to meet their travel expectations, a large portion of this group have opted for shorter vacations away from home. This trend in cruising has been measured by Cruise Lines International Association (CLIA). 1992 data indicated that two- to five-night cruises account for 38 percent of the total cruise market whereas a decade earlier it was only 29.6 percent of the market. Fantasy Cruises was one of the innovators in this market, introducing two- and five-night Caribbean cruise itineraries as early as 1983. Fantasy Cruises has an established reputation for providing a value product and can therefore target its product and marketing to a price sensitive market.
 Fleet Deployment
 The diversity of the Fantasy product addresses a variety of markets. The two- and five-night Caribbean program reaches a growing audience for shorter cruises while the seven-night Caribbean cruises are port- intensive and attractive to first-time cruisers.
 The annual Britanis circumnavigation of South America has made this classic experience available to a value-conscious, older audience. Operating for its sixth consecutive year, this popular program stands as the only budget cruise in this competitive market.
 Marketed through Chandris' European offices, the Victoria and The Azur cruises provide a strong presence in Europe. A full complement of cruises are operated out of Amsterdam to Northern Europe in addition to an intensive Mediterranean program from Genoa and Venice.
 Caribbean Product
 Fantasy Cruises had a presence in the Caribbean as early as 1963. It introduced the first air/sea Caribbean programs in 1966 and pioneered short cruises in the 1980s. The Fantasy fleet currently operates two vessels year-round in the Caribbean.
 Nassau -- Britanis from Miami: Weekend, two-night cruises to Nassau are operated year-round.
 Mexican Caribbean -- Britanis from Miami: Five-night cruises to Key West, Playa del Carmen and Cozumel depart every Sunday. The Britanis performs this itinerary in conjunction with its weekend Nassau sailings.
 Deep Caribbean -- Amerikanis from San Juan: Seven-night, seven port itinerary to St. Thomas, Guadeloupe, Barbados, St. Lucia, Antigua, and St. Maarten depart every Monday (January to May and September to December)
 Deep Caribbean -- Amerikanis from San Juan: Seven-night, six-port itinerary from Curacao, La Guaira, Grenada, Martinique and St. Thomas (May to August).
 South American Product
 Circumnavigation of South America -- Britanis from Miami
 1992 marks the Britanis' sixth annual cruise circumnavigation South America. During her 52-day voyage, the vessel will transit the Panama Canal, cruise through the Strait of Magellan, Tierra del Fuego, Beagle Channel, Cape Horn and Orinoco River as well as call as Cristabal, Callao, Arica, Valparaiso, Puerto Montt, Punta Arenas, Puerto Madryn, Montevideo, Buenos Aires, Rio de Janeiro, Salvador, Recife, Sao Luis, Devil's Island, Puerto Ordas, Barbados, St. Thomas, returning to Miami. This voyage takes place during September and October, traditionally the weakest months for Caribbean Cruises.
 European Product
 Two ships of the Fantasy fleet, The Azur and The Victoria are deployed year-round in Europe. Highlights of their operating schedule include:
 Baltic -- The Victoria from Amsterdam: 15-night cruises to Copenhagen, Stockholm, Tallin, St. Petersburg, Riga, Gdynia and Harwick (May, August).
 North Cape -- The Victoria from Amsterdam: 14-night cruises to Bergen, Ytterdal, Geiranger, Honningsvag (North Cape), Tromso, Svolvaer (Loforen Island), Andaisnes (Romdalsfjord), Flam (Sognefjord), Vik, and Harwick (June).
 Spitzbergen -- The Victoria from Amsterdam: 15-night cruises to Bergen, Ytterdal, Geiranger, Honningsvag (North Cape), Spitzbergen (Magdalena Bay) Longyear City, Trondheim, Olden and Harwich (June, July).
 In addition, The Victoria operates Canary Islands, Black Sea, Eastern Mediterranean and Western Europe Cruises.
 Mediterranean -- The Azur from Venice: Seven-night cruises to Corfu, Katakolon (Olympia), Santorini, Kusadasi (Ephesus), and Mykonos (June to October).
 In addition, the Azur operates Canary Islands, Egypt/Israel and Black Sea cruises.
 Marketing Strategies
 Fantasy Cruises' strategy is to position the product clearly as:
 -- exceptionally well-priced;
 -- a fun-filled and exciting vacation choice;
 -- providing great value for the money.
 National exposure of the product is handled through distribution of program collateral to national mailing lists, travel trade shows, travel trade advertising, co-op advertising support and public relations activities.
 Fantasy's consumer advertising efforts are targeted regionally, focusing on the Northeast and Southeast population centers where air transportation costs are lowest and prices most competitive.
 In addition to regional segmentation, Fantasy programs already in place, such as honeymooners, seniors and adults singles programs, will be promoted to the trades an their specific consumer audiences.
 -0- 9/24/92
 /CONTACT: David Kogut, Anne Kazel or Joan Brower of GCI Group, 212-546-2687, for Chandris Group of Companies/ CO: Chandris Group of Companies; Overseas Shipholding Group Inc. ST: New York IN: LEI SU: JVN

TS-SM -- NY008 -- 2995 09/24/92 10:28 EDT
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Date:Sep 24, 1992

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