No place like home

The latest stage in the consolidation of the newly expanded Holland America Group takes place next year when the leases on the two Seattle buildings housing most of the group’s land-based staff expire and more than 1,000 of them move into a single building.

Having had previous telephone interviews with Stein Kruse enhanced by the Group CEO giving me a running commentary of the marine wonders he could see out of his office window overlooking the bay, my first thought was whether he had already bagged a room with a view in the new office.

“Unfortunately not,” he said but – with commendable corporate loyalty – added: “That’s a small price to pay for more common utilisation of workspace which will ensure better office communications, coordination and collaborations.”

After all, it has been achieving those three ‘c’s that has been at the core of the group’s back-office integration of its four brands: Holland America Line, Seabourn, Princess Cruises and P&O Australia.

The planned changes have been clearly communicated at each stage. “We have four very powerful brands and made sure everyone understood from the beginning that their customer-facing elements needed to remain distinct in appealing to the psychographics of their different markets,” says Kruse.

“Behind that public facade, there is a group that provides services that all the brands require. These include human resources, financial accounting, purchasing and provisioning, logistics and the technical operation of the ships and their drydock scheduling. “All are essential for the success of the brands but all are – or should be – invisible to the customers who really don’t care how a container gets to Singapore or where their booking is handled.

“Setting out that vision was simple to articulate but these are large brands (particularly HAL and Princess) which have powerful existing systems and different ways of doing things.”

Among the benefits from the process has been the sharing of best practices where one area of the business was using applications or tools that were transferable to other parts of the business, says Kruse. “We now have revenue and yield management systems being shared by teams sitting in different locations and working within different management structures.”

Another key advance has been the coordination of deployment decisions across the brands. “These are no longer being taken in isolation but are thought about in the context of the group.”

He also identifies the way purchasing has become highly integrated to create the significant advantages of alternative sourcing when faced with dramatic changes in currency exchange rates.

Interestingly, at the same time as expanding the Holland America Group, the pre-existing policy among the individual Seattle-based brands to allow for more staff to work from home has not only continued but – helped by the development of new communications technology – accelerated.

He says: “You do lose some of that closeness and collaboration that comes from working together in one place so we avoid it in certain departments.

“We have, though, been growing the proportion of the home workforce for some years and every time the numbers increase – they are in the hundreds now – we find we have a measurable improvement in performance, absenteeism and work accuracy.

“For an increasing number of people, working from home is more compatible with their lives and, if it is also compatible with their position within the organisation, we are happy to facilitate it.

“It eliminates commuting and gives them the flexibility to manage their days better so that they become better, more motivated performers and stay with us longer.”

Kruse adds that home working is not just being implemented in sales but also in all-centre functions where people are talking to travel agents or consumers or doing follow-up on administrative work on cruise bookings.

“Companies which are more command-oriented may not go down this route for fear of losing control of their staff but the way performance can be monitored remotely these days is so much more sophisticated and those tools are readily available.”

Where the required tools are noticeably absent just now is in Australia, where a bookings boom that has turned the country into the most highly penetrated of all the cruise source markets has also highlighted the limitations of the existing port infrastructure. The issue is being exacerbated by opposition to further cruise port development from local residents and lobby groups.

“The whole issue of port infrastructure in Australasia and South Asia is very big for us right now,” he says.

“We and CLIA Australasia are playing a constructive role to resolve this. But there are challenges with politicians who come and go and fluctuating public opinion.

“There is also the question of money – these developments are expensive so who is going to pay and how will they be financed? But all stakeholders – including regional and national governments – have an interest in the continuation of the economic benefits cruising is bringing.

“The bottleneck at Sydney is high on everybody’s agenda but there is a willingness on both the Government and the naval side to create a sustainable solution at the Garden Island site. National interest should carry the day as cruising is so positive for the economy with so many international visitors involved.

“We are also working with other Australasian ports such as Brisbane, which realises it is no longer acceptable to expect cruise ships to sail up the river and use an old, small terminal at a time when the whole Gold Coast is on the verge of major cruise growth which will, in turn, boost cruise tourism to the South Pacific.”

There is no shortage of infrastructure investment in China, where the pace of cruise sector growth also remains impressive.

Kruse says: “I have been in this business more than 30 years and the growth of China – and Carnival Corporation’s ability to take advantage of it – is the most exciting development I have seen.

“The investment we are making in office set-ups and employee-hiring, the conversations we are having with ports, and the number of joint ventures which are being put in place (not just by us but also by our competitors) – all point to a seismic shift in our industry.

“In ten years, we will look back at a fundamental change to our industry that will bring millions of new cruisers into the business.”

The recent decision to dedicate the next Princess newbuild to year-round cruising out of Shanghai and sourcing primarily Chinese passengers underlines that seismic shift ahead. Although this ship is being built in Italy (Fincantieri’s Monfalcone) as a sister to the Royal and Regal Princess ships, there will be a lot of additions and changes which will result in a China-specific product.

“We want to ensure that all the things that make those two ships so popular remain but alongside features inspired by our experience of carrying Chinese passengers,” says Kruse. “The design of public rooms, the entertainment options, food outlets and accommodation will address their specific needs.

“But, when you go on the ship in 2017, you will not look around and think that this is Chinese ship – you’ll say this is a gorgeous cruise ship in the Princess tradition but with things which Chinese passengers will particularly appreciate.”

Even more than Kruse appreciates the view from his window and – as it turns out – for a lot longer, too.