The following interview for the Cruiseable Podcast was conducted on April 9, 2015, on Skype between Cruiseable CEO JD Lasica and Ron Gulaskey, Global Director of Corporate, Incentives and Charter Sales for Celebrity Cruises. See our podcast:
JD: Hi Ron, thanks for joining us today. Can you tell us your name and what you do?
Ron: Sure, Ron Gulaskey, I am the Global Director for Celebrity Cruises for corporate meetings and incentives and full ship charters, whether that is corporate or resale.
JD: OK. For those who aren’t familiar with the term, why don’t you explain what a corporate incentive trip is.
Ron: I think the best way to describe it is when a company — one person pays for a job well done by a group of employees. Unlike affinity groups where everyone pays their own way for a common cause, on a corporate group the corporation’s rewarding people for their top salespeople, they may be celebrating an anniversary. They may be rewarding their top distributors or dealers. What’s great is that one corporate company pays for the entire trip for all the people so it is very easy to deal with and very professional.
JD: So typically on a trip, on a cruise like this, what happens? Do we have employees or managers staying in a stateroom? Maybe bringing a spouse? Relaxing during the day at a pool party with a private spread? Going to the fitness center? Entertainment, workshops during the day? What’s typical?
Ron: Actually, everything you mentioned is pretty typical. [Compare that with the typical setup for a company at a hotel.] You have Ballroom A and you eat breakfast. In Ballroom B you have meetings. Ballroom C you get back to lunch and go back and forth between your meals. At the end of the night, everybody may have a group dinner in a ballroom and afterward everyone either disperses or taxis throughout the town and you lose audience or everyone hangs out at a hotel bar. So that is a pretty standard meeting at a hotel.
The difference on a cruise ship is everybody gets to eat wherever they want on the ship for breakfast or you can eat together in a dining room or the buffet areas. You go to a meeting space, a designated meeting space, whether it is the main theater area or cinemas or meeting spaces with different types of seating arrangements. Then at lunch you can either eat together as a group or everyone can go their separate ways and get whatever they want to eat rather than a Mexican theme which you get at a hotel resort.
If you go to Vegas or Orlando for an event for example, you lose your entire audience for the night and the teamwork and camaraderie doesn’t really happen. Whereas on a cruise ship, you are captive somewhat in a sense of where you can go. So you go where you want to go and then you find out who else enjoys that. I may go to a jazz lounge and find out that one of the top VPs in our company likes it as well and we have a common theme to talk about in the future. It's great for the VIPs because they can walk around the ship and be visible and not have to be with their group as well. So I guess the best way I describe a cruise ship for a corporate meeting is that it is like going to a family reunion but you don’t actually have to be with your family. <JD laughs>
To answer your question, it usually is two adults who go on it. So they can bring their spouse or significant other on it. Most of the times they aren’t allowed to bring their children and that is why Celebrity, for example, is a great choice for a premium adult experience. A lot of the contemporary brands have 750-1,500 children on each of their cruise ships and you don’t get that when you are in the premium space. You know, if you aren’t allowed to bring your own children, usually you don’t want to be around everybody else’s children as well.
JD: Got it. So in addition to the corporate incentive trips, are there other kinds of business gatherings, you know, conferences or executive retreats that you see on some sailings?
Ron: Yes, we have a major bank in Canada, for example, that charters our entire ship and they do training for all of their frontline employees. They found there is nothing they can do on land that is cost saving like they have on a ship and the ability, like I mentioned earlier, for people to really get to know each other and become friends because they are all in the audience together. So training is a good example.
We do have a lot of board meetings on board our ships. Something that is really growing over the past few years is continuing education meetings. That is when you have doctors, lawyers — anything that needs a certification annually to keep their status. We have a lot of them coming on cruise ships now because they can bring their significant other. So while they are having meetings to get their certification, their significant other on a cruise ship has so many things they can do to their taste and liking. So they can do whatever they want to do to or not want to do. Whereas in the hotels, most of those are you either go to the beach or go to the spa or you kind of explore the town on your own. On a cruise ship we have so many built-in activities so your spouse or significant other is not bored or doesn’t feel like they can’t wait for you to get out. So they can actually do something on that vacation as well.
JD: Tell us what kind of sailings are best for this? Where do folks go? The Caribbean? Alaska? Europe? And how long are those sailings typical? Four days? Seven days?
Ron: Yeah, it is interesting you say that. We use to do a lot more of — you know a lot of the cruise lines have 7 nights or less and there are a handful of boats that have 3-5 night sailings as well. I think the perception still is that 3-5 night sailing is more than what corporations actually choose for their sailings. But we’ve found over the last 3 years, that is really a trend is, 7 night is actually where are are finding many many more corporations are choosing for a number of reasons.
The first is that the nicer trips and the better itineraries are 7 nights compared to those short ones. That is one thing. A 7 night cruise is a carrot or incentive for somebody. If you have a chance to exceed your sales goals and win a 4-5 night cruise or a 7 night cruise, chances are you will try a little harder for the 7 night cruise. And then the biggest thing these companies have found is during their pre-event and post-event they found that most of their employees were coming in for another day or two before the hotel or resort and staying a day or two afterwards. So even though they thought their people were going to be gone 4-5 days, the reality is that most of them are gone 6-7 days because they were staying earlier or later. So 7 night cruises to answer that portion.
[As far as destinations go,] the Caribbean is still number one over the wintertime as far as people booking. But we have really seen a surge, um, Alaska is really hot right now. It's been hot 2-3 years. And with Europe, with the dollar being so much stronger now, companies that might have been more exoic and went to Europe for their events are choosing a cruise instead because we use US dollars on the events. So you’re going to Europe and using US dollars throughout your stay rather than the euro. So it is a tremendous savings for companies.
JD: OK, good. Which ships are we talking about for the most business trips? Are they the Solstice or Millennium class ships or other kind of ships?
Ron: Yeah that is what we have now. We have four of the Millennium class and five of the Solstice class ships and we really position them. We have two Solstice class doing Caribbean and one of them is doing Alaska out of Seattle. So we are covered in that range for the people looking for the newest, most modern ships that we have. But we have also, over the past few years, have really revamped our Millennium class ships. But their are some people who do like the Millennium just because they like the smaller ship that holds around 2,100 guests. Where the Solstice class holds around 2,800-2,900 guests. No matter what on both we have designated meeting space. We Solstice-sized our Millennium class so they have a lot of the traits of that, of the Solstice class. I would say, because of the 7-night, we are seeing more people go to the Solstice class.
JD: And what kind of equipment are we talking about here? So you’ve got meeting spaces, do you have AV equipment? Projectors, screens, all that jazz?
Ron: Yeah, we have everything possible: flat screens throughout, portable microphones. Everywhere you go however, you attach it — you can attach it to your head now. Or the handheld mics. We have all that. Because the entertainment has gone up so much with the cruise lines, we have tremendous video capabilities in the main theater. The sound system is incredible. Coachella has done a music festival on our ship at the pool deck and brought in minimal speakers because our system was so set up as well. So thats one thing. We are getting so many music festivals now and the majority of them don’t feel the need to bring any of their own speaker systems — which is a testament to the quality of sound that we have on the ships as well.
JD: Does internet come with this as part of the package?
Ron: We do have internet packages and we usually do some kind of discount for corporations when they come on as well.
Ron: You know, the speed wise on a cruise ship is still not as strong as it can be, but we definitely have it and some nice packages to make it affordable for people as well.
JD: What about shore excursions when the ship arrives at port? Do company employees sometime go off together on land or do they have to stay on the ship and go to meetings all day?
Ron: Most of the corporations have been respectful of the clients knowing that if they are sitting in Key West, for example, and they are having a meeting, they don’t have the attention of those people anyway because they are sitting there depressed that aren’t off the ship with the rest of the guests. We find that a lot of them, if we are landing at port at noon, for example, they have meetings in the mornings and let their guests off afterwards. We’ve found that most companies don’t do any meetings during the shore excursions, and that includes the continuing education, because they don’t want to compete with that.
We’ve seen a big rise of custom shore excursions for corporations that they want to do something different than the rest of the guests and make sure it is only their guests within the shore excursions. The shore excursions team has actually grown over the last few years and much of that reason is to handle the custom shore excursion requests. There is no reason for DMV to get involved when you work with a cruise line because we can do so many things in those ports. We can even set up charity type events as well: painting houses for some of the unfortunate people on some of the islands. So it can be the fun shore excursions or we can do team building as well.
JD: Ron, you talked a little bit earlier about sort of employee bonding that might go on during a trip like this — is there sort of any evidence that a cruise getaway/vacation might actually be good for employee wellness?
Ron: On a cruise ship, for some reason, as soon as you board that ship every guest seems to have a common cause. You know, there is some sort of a bond. It's not only with your own corporation but with the other guests on the ship. People have a really great bond and it is a really uplifting atmosphere. You know, there is a perception that people eat a lot on cruise ships. Again, they can if they want but if they want they can also choose many healthy choices that are on the ships. We have tremendous fitness centers. There are hotels that are in Vegas that companies that I’ve worked for wouldn’t allow us to use the fitness centers or we had to use our own money because it was an upcharge to use the fitness center at a lot of the hotels in Vegas and some of the other areas.
So on a cruise ship it is part of your cost of the cruise ship and what is great is that it is all state of the art equipment. For the cardio, for example, each one has its own television set that you can watch. So if you want to just walk, you have something to be entertained with when you’re walking on the ship as well. I just know overall is the feedback we seem to get from every corporate group is, and unfortunately I don’t have it in an objective way or subjective, is they just feel that there is so much more bonding on all levels on a cruise ship when everyone seems to find a common bond. Versus a land event, as I mentioned earlier, where everyone seems to scatter and don’t see the people at night.
JD: Sure. Let’s talk about the costs for a second. So I think a lot of people don’t realize that holding a company event on a cruise ship can be more cost effective than holding it on land. I’ve heard the figure that a business can save 30% compared to most hotels or resort trips. Have you run the numbers on this?
Ron: Yeah, we still claim the same. We’ve done studies with other cruise lines whether it’s luxury or contemporary brands as well. In that the key areas there are the meeting space and the AV equipment. If you go to any hotel right now, the thousands that you spend on meeting space, if you rent an AV projector there, you know $400 even if you just rent it for an hour or the day. Plus you need the microphones and all that type of system and people want to decorate the ballroom and stuff because it is a bland room. On a cruise ship, our lounges are already made up for people and look fantastic. We have all of the equipment they need on board and we have technicians to help the corporations so they don’t have to rent somebody out like they would on a land program as well. So really the meeting space and the AV equipment are the biggest areas. Our ships to the Caribbean for example, a person are $125 to $150 (per person per day). If you think about that, a lot of the time you spend that on food alone for your people at these events.
You know the other thing, I was at an MPI conference once and they had a seminar and it was a 45 minute seminar on how to save money at a hotel. And they were talking about how to make sure the ice cubes were bigger in the drinks and putting the shrimp in the back of one of the rooms, you know, because it is harder for them to get to. All those things on a cruise ship, that you know, the food is included, so it is really not something you speak to. And it is not just a money standpoint but a meeting planner’s standpoint. The two areas they spend the most time on a land program are on meal planning and entertainment. And if you think of it on a cruise ship, those are completely done already for a person because we take care of all the meal options and we take care of the entertainment as well. So it not only is the money standpoint but the meeting planner’s time standpoint. It is much more efficient to do on a cruise ship as well. So you have a cost savings there as well with their staff.
JD: Is there any kind of yardstick that we can use here to tell businesses what kind of costs they are looking at? What are the kind of things that factor in?
Ron: You know, it really depends on the itinerary they choose and how many sail nights as well and if they’re going for a contemporary brand, a premium brand, or a luxury brand. So it does vary. I think the most important thing they need to realize that cruise lines are not all the same. Our big challenge is to make sure that if you’re used to staying at a premium hotel or resort, make sure to pick a premium cruise line as well or you’re going to be disappointed. I think our big thing is making sure people know there are different categories of cruise lines just like with hotels.
JD: Are there any tax implications or savings for holding an event on a ship instead of a land based resort?
Ron: Well, most of us are registered in other countries, so from a tax standpoint the companies don’t get a tax advantage unless they come in the night before the cruise and then host some type of meeting the morning before they board the ship. That way, they can get their flights paid for and a free hotel paid for as well for a tax reasoning. As I mentioned earlier, the 30-40% you save in real dollars, on picking a cruise over a hotel property, more than makes up for the savings you would have gotten in taxes by going to a hotel or a resort. So in real money, at the end of the day you will get package advantages picking a domestic land resort but, again, the money you save on a cruise ship more than covers that amount you would be saving.
JD: Sure. By the way, who typically organizes these types of trips for businesses? Is it a meeting planner or somebody at a higher level?
Ron: You know a meeting planner usually does the execution, but we and the meeting planner usually have to pitch the senior vice president of sales or the CEO of a company (depending on the size of it) to make sure that they understand what will happen and how great of a unique time they will have for their people, as well as, the cost savings. So it is going to be the ROI that they are looking at at the higher level and what is the type of atmosphere that will be built for their employees as well. So it is the meeting planner that does the execution, but it is the vp of sales or CEO of the company that gives the final sign-off.
JD: Ron, how long do companies actually charge the entire ship?
Ron: We as a brand get 8-12 of those annually and I would say our sister brand Royal probably gets near that amount as well and maybe a couple of other cruise lines. So it is a select group. It is more of the large insurance companies, financial companies, or direct selling companies (you know the Avons, Amways, that type of company). Anyone with a tremendously large sales force which is usually an insurance or direct selling company. It is pretty simple for them to charter a ship and the cost savings they get is tremendous vs bringing all those people to a hotel, paying for their food, and entertaining and lodging.
JD: Ron, you know, I’ve gone to Dreamforce over the years out here in San Francisco and I was really fascinated to see they are moving it, in part, to Celebrity Infinity this fall. So tell us about that. What’s happening with the Dreamboat? Did Salesforce reach out to Celebrity or the other way around?
Ron: Salesforce reached out to pretty much every cruise line that they knew of on the west coast and all of us gave the extensive pitch to what our brand stands for and what we could do as a brand. Fortunately for Celebrity, they understood the premium nature and the modern luxury to our product and thought it was a perfect fit for their brand and to the attendees coming in. They have, I think, it is 132,000 people that come in for that event from around the world. Their CEO [Mark Benioff] really wants to keep it in San Francisco because he wants to do good for the local area, which is fantastic that the company cares so much about San Francisco. So he is doing everything he can to keep that in San Francisco and hotel space has become a premium. So they are kind of running out of the space and they thought the best way to do that was to have their own hotel and that is where they brought Celebrity Cruises in. So the people are able to book into that now. We’re going to be hosting some cocktail parties at night so it is going to be a great unique experience for the people that stay there. And, like I said, we are going to have some events at night that we will bring others on that will be attending the event as well that will have a great time as well. And to get some type of snapshot of what it is like on board.
JD: Well thanks for joining us today, Ron, I appreciate your time.
Ron: JD, thank you so much, I really appreciate it. Have a great day.