By
Michele Witthaus |
In December, Kruse moved from being president and CEO of Holland America Line (HAL), to CEO of the new Holland America Group. In the process, he took on responsibility for Princess Cruises and Holland America Princess Alaska land operations, in addition to his existing work with HAL and Seabourn. In total, the HAL Group operates 41 cruise ships with over 36,000 employees worldwide. Kruse reports to the new Carnival Corporation & plc president, Arnold Donald.
Any way you cut it, the addition of Princess Cruises to a day’s work represents a big bite of the global cruise cake landing on Kruse’s plate. How does Kruse view the brand’s current identity and potential and what are his goals for the cruise line? “People are curious at the differences between Holland America Line and Princess and what sort of opportunities lies ahead when you put two fairly similar companies under one leadership,” he says. “If you go back to pre-2003, before Carnival Corporation owned Princess Cruises, Princess and HAL were fierce competitors in Alaska and in the Mexican Riviera. They were both West Coast-based premium companies so it was almost a ‘Coke and Pepsi’ competition between the two brands.
“When Princess became part of the Carnival Corporation family in 2003 it was a little bit of an awkward matrimony – in a sense, it was a shotgun wedding. The competitiveness remained but collaboration slowly began to form, which allowed the two companies to take a little bit more advantage of that common ownership, and get some synergies from it.”
In the decentralised Carnival Corporation structure prior to Micky Arison stepping down from the CEO role last year and Donald coming in, the brands were not viewed as being under common leadership, says Kruse. “They were headed up by independent senior guys like me and Alan Buckelew (in the case of Princess). We drove the yields, capacity and volumes and so forth as we saw best while trying to take advantage of that common ownership.”
Now the two lines are under more direct common leadership, Kruse says he is looking at how to take advantage of best practice in each company to align deployment and make decisions that are more strategic in nature. He says the new mantra within the Group is the ‘Three C’s’: communication, collaboration and coordination. “It allows us to much better manage the existing business, and here is where I think really the opportunity lies. Let’s look at where we can leverage the strength of a particular brand in a particular source market.
“It gives us an opportunity to manage a portfolio on a much more broad and global basis than we previously did when we were competing under two separate leaderships. So that’s where I see the opportunities in the near and medium term. In the long term there are even more opportunities – where to deploy ships on a year-round basis, what source markets to actively grow, what type of markets to build ships for.”
Kruse will also be managing fast growth at Carnival Australia. “It’s amazing how quickly Australia has become a very substantial cruise market,” he remarks. “In terms of percentages on a per capita basis it is an incredibly exciting market. Australians are enthusiastic cruisers and they like to travel. As we look at Carnival Corporation’s role in the region and the excellent work that Ann Sherry and people like her have done already, Australia is a very attractive proposition, both as a source market and as a place to deploy vessels by multiple brands.”
Back on his HAL stamping ground, he is keen to share his enthusiasm for the new ship on order. Steel cutting began in February on the 100,000gt, 2,660-passenger Pinnacle Class newbuild, scheduled for delivery in February 2016. “Architect Bjorn Storbraaten and designer Adam Tihany, who are helping us with this, are busy at work,” he says. “I can assure you that this will be the most exciting newbuild we’ve ever done in HAL. We are looking forward to taking all the good things we’ve been doing in the brand recently and putting them onto that ship and we will introduce her in elegant fashion.”
He is also upbeat about Seabourn’s prospects. “Seabourn has been very successful for us. We had the opportunity to use the facilities, systems and infrastructure of the much bigger HAL, and see what we could tap into that behind the scenes while maintaining a very unique, very identifiable brand.” He is happy with the outcome of the decision to sell the three smaller Seabourn ships, so that the company could focus on its three larger vessels. Likewise the contract with Fincantieri, agreed during that period and signed in February, for a fourth Odyssey/Sojourn/Quest-type vessel. The new ship will be delivered to Seabourn in the summer of 2016. “We are looking to the future with a very cohesive, modern young fleet of luxury vessels. If you wanted to summarise in one word the feeling here in Seattle with HAL and Seabourn, it is optimism,” he says.
An aspect of Kruse’s job that is close to his heart is the development of HAL’s Alaska presence. “Alaska is a very important part of the Princess and HAL overall structure. We are by far the largest presence in Alaska during the four-month season, with 14 ships that ply the waters of Alaska from early May to late September. In addition we also own, under the structure of HAL/Princess Alaska, 20-plus hotels, hundreds of coaches, riverboats and trains. So between the two companies we are moving almost 150,000 people into the interior of Alaska – people who either are going on a land journey before they go on a cruise or take a land journey after they get off the ship.
“Our commitment to Alaska, both in terms of place to deploy ships and our ownership of assets in Alaska, is very unique and therefore it has such an important role in how we go about doing things.”
What does Kruse think is the key factor driving success in the cruise business as it goes through significant changes? “People in all organisations crave a vision,” he replies. “They like companies that have a set of values and they like to understand what those are through effective communication. If you share willingly and openly expensive information about how you’re doing, what you’re doing and where you are going, people feel ownership, they feel pride and passion from that ownership and they will work with you.
“I think right now people view the changes that are happening with very positive eyes because they see the type of investments we’re prepared to make and the effective turnaround we’ve been able to effect in Seabourn – and the opportunities that Carnival Corporation, through its new leadership and its new focus on collaboration, is gaining. I think they see a very bright future.”
This article appeared in the Spring/Summer 2014 edition of International Cruise & Ferry Review. To read other articles, you can subscribe to the magazine in printed or digital formats.