Ship Operators Cruise Into Corporate Meetings Market

<B>Ship Operators Cruise Into Corporate Meetings Market</B>

By Chris Davis

As meeting room rental rates for events with no sleeping room nights continue to rise, and options for short incentive travel awards decrease, many short cruise operators are reporting increased interest from corporate meeting planners.

Though day-long cruises are not necessarily the most cost-efficient solution, many operators have different vessels that are adaptable to many corporate budgets. Some are launching new ships specifically designed to cater to the corporate group and incentive market.

Argosy Cruises of Seattle, for example, earlier this year introduced the Royal Argosy, which was designed "to be a corporate-type vessel," said Vanessa Nicholson, director of marketing for Argosy Cruises. "It can seat 800 attendees, has the capability for PowerPoint presentations, video equipment to broadcast to all decks of the ship and has all food cooked onboard."

Nicholson said Argosy's meetings and incentive business has grown about 20 percent annually since 1994. "A lot of corporations want something different for their meetings or incentives, and we're in that niche," she said. "Many corporations are willing to spend dollars on a very upscale ambiance."

The overall trend toward a more casual level of operations in corporations has led many to look at alternatives to standard meeting and incentive fare, Nicholson said.

The Royal Argosy, Argosy's newest ship, already has attracted interest from corporate meeting planners. "We wanted to do something different because we're always in hotels, and this keeps them captive," said Marlene Kelly, marketing manager for the Seattle branch of Sysco Corp. Kelly staged a lunch meeting this summer for about 140 employees. "The price was a little higher than we usually get from hotels for this event, but it was worth it because of the atmosphere," Kelly said.

While Sysco's audiovisual needs either were met by Argosy or brought in, Kelly said the actual process was less than smooth sailing. "It is challenging to use audiovisual equipment on the boat because of the layout," Kelly said. "If we had high audiovisual needs for a future meeting, I'm not sure we would look in this direction."

While prices for short cruise events have increased as demand has, operators said that's just a function of the market. "Prices have gone up by a small percentage each year, but we have vessels for every type of budget," Nicholson said.

Eric Lichtenwalter, director of national sales of Hornblower Cruises & Events in San Francisco, agreed. "Prices have gone up, but not more than you'll find in other marketplaces like hotels," he said. "And like a hotel, we negotiate.

"We're seeing an increase in sales missions and employee-retention events," Lichtenwalter added. "The majority of events we do are of the after-meetings type, but we can bring in and set up audiovisual equipment, and can set up the decks in any style needed." To that end, Lichtenwalter sees Hornblower's competition as land-based. "For many companies out there, the first goal is to convince them to hold a meeting on the water in the first place," Lichtenwalter said. "We have to compete with hotels for that. Once that happens, we can sell them on our specific line."

Hornblower also is seeing an increase in meetings that include entertainment afterward, as well as general meetings and incentives. "I don't know if we'll ever get to the point where a day-long meeting entertainment event will be the norm," Lichtenwalter said. "But sales meetings here can highlight production in a different setting, and show what the incentive can be."

Chicago-based American Classic Voyages, which operates riverboats and short cruises throughout the country and in Hawaii under a variety of names, also is targeting the corporate meetings market, said director of corporate and incentive travel Sean Mahoney. "We're running predominately incentive programs now, but we're encouraging more meetings business and creating an internal infrastructure to better solicit them," he said. "But there are a few progressive corporations that have wised up to the benefits of meeting on cruise ships."

One advantage Mahoney sees in particular for American Classic Voyages is that its vessels all are U.S.-flagged, enabling corporations holding events to take a tax deduction.

"Some corporations will not consider a cruise because of tax-deduction issues," Mahoney said. "Foreign-flagged ships are less tax-deductible, so the more ships that sail under the American flag, the better it is for the entire industry.