Switzer­land-based cruise line Vik­ing Cruises of­fers Chinese tourists a pre­mium ex­pe­ri­ence

Switzer­land-based cruise line Vik­ing Cruises of­fers Chinese tourists a pre­mium ex­pe­ri­ence

China Daily European Weekly - - NEWS DIGEST - By SHI JING in Shanghai shi­jing@chi­nadaily.com.cn

When Torstein Ha­gen started his ca­reer in the cruise in­dus­try more than 40 years ago, it was noth­ing like it is to­day. He says a cruise, whether by sea or river, should be quiet and el­e­gant, rather than the cur­rently preva­lent profit-driven cruise model, which in­volves a bigger ship and more pres­sure to spend money on board.

With that aim, Ha­gen is bring­ing his Vik­ing Cruises to China, hop­ing to bring back the good old days via the pri­vately run cruise line based in Switzer­land.

Vik­ing Cruises opened its Shanghai of­fice on Nov 1, an­nounc­ing a 15-day Euro­pean river trip spe­cially de­signed for the Chinese mar­ket. The com­pany’s fourth seago­ing ship,

Vik­ing Sun, which set sail on its 141day world tour in De­cem­ber, will dock in Shanghai on March 8, mark­ing the first visit by a Vik­ing Cruises sea­far­ing ship to China.

Es­tab­lished in 1997, Vik­ing Cruises is an ex­pert in Euro­pean river trips, fea­tur­ing itin­er­ar­ies on the Rhine and Danube rivers. Over time, it ex­panded into ocean trips, with its first set­ting off in 2013. To­day, the com­pany has a fleet of 65 river ships and four sea ves­sels, serv­ing up to 400,000 tourists world­wide each year. The com­pany ex­pects to reg­is­ter a turnover of $2 bil­lion (1.6 bil­lion eu­ros; £1.4 bil­lion) for 2017 and a growth rate of 27 per­cent year-on-year.

As a pri­vately owned en­ter­prise, Vik­ing Cruises says it is not hes­i­tant when it comes to in­vest­ment, which is a con­cern among many pub­lic com­pa­nies. Ha­gen says the con­ver­sa­tion be­tween him and his col­leagues never starts with, “How much will it cost us?” In­stead, the first ques­tion is, “Should we be do­ing it?”

Even at the age of 74, Ha­gen in­spects ev­ery de­tail of his busi­ness. From time to time, his col­leagues re­ceive emails from him in the mid­dle of the night, for ex­am­ple look­ing to con­firm if com­plaints he has read on­line are true.

He says such scrupu­lous­ness is prob­a­bly writ­ten into his DNA. As a Nor­we­gian, Ha­gen em­pha­sizes equal­ity. Even when de­scrib­ing the com­pany’s tar­get con­sumers, he would rather de­scribe them as “com­fort­ably well-off” rather than “mid­dle-class”. This is the level of re­spect that Nor­we­gians show as they grow up in a class­less society, Ha­gen adds, and the kind of re­spect that Vik­ing Cruises shows to its guests.

In his ex­clu­sive in­ter­view with China Daily, Ha­gen talks about his un­der­stand­ing of the Chinese mar­ket, his rich ex­pe­ri­ence in the cruise in­dus­try and his man­age­ment style.

Who are your tar­get con­sumers in China?

It’s a pretty healthy mix. First are the 50-plus-year-olds who have worked hard, want a slightly slower pace of life and a pleas­ant hol­i­day ex­pe­ri­ence. Then it’s the 30-some­things trav­el­ing with their par­ents, who also want to bring along their 15-year-olds to see the world, mak­ing it three gen­er­a­tions.

In gen­eral, our tar­get con­sumers are com­fort­ably well-off. They are ex­pe­ri­enced trav­el­ers who un­der­stand trav­el­ing is about lo­cal cul­tural im­mer­sion, about get­ting to know the peo­ple and places, and about see­ing beau­ti­ful things.

How do you dif­fer­en­ti­ate your­self from the many other cruise lines that op­er­ate in China?

One of the chal­lenges we have is the way that some trav­el­ers are only fa­mil­iar with the very low-priced op­tions. On these trips, the cus­tomers get to their des­ti­na­tion and they are forced to shop. There are a lot of sim­i­lar ways that those cruise lines look to get their money back.

We can­not com­pete if com­pared on the price point. But with us, trav­el­ers can get on a ship and leave their wal­lets at home, be­cause ev­ery­thing is in­cluded. It’s also our way to en­cour­age peo­ple to save. Ac­tu­ally, hav­ing one bet­ter ex­pe­ri­ence can be more mean­ing­ful.

Lan­guage is cer­tainly im­por­tant. Food is a mat­ter of bal­anc­ing com­fort with new ex­pe­ri­ences. Some­times at mid­night some Chinese trav­el­ers want noo­dles, say­ing that it is im­por­tant to the spirit of the whole trip. Know­ing that there is com­fort food back at base en­cour­ages trav­el­ers to try the lo­cal stuff, be­cause they know, “If I don’t like this, I can have some­thing that I do like later.”

Each group of peo­ple has a dif­fer­ent itin­er­ary. We re­spect that not ev­ery­one comes to Europe just for shop­ping nowa­days. But a lot of peo­ple do want to shop when they are in Europe. So in cer­tain cities, they want more free time. We work with the largest con­sult­ing prac­tices to con­duct ex­ten­sive re­search to de­cide ev­ery lit­tle de­tail of our trips. Yet it wouldn’t be the same for all our mar­kets and we can’t be ev­ery­thing for ev­ery­body.

We have a va­ri­ety of on­shore ex­pe­ri­ences in Europe, and the cruise in­cludes ev­ery ticket for ev­ery venue we take trav­el­ers to. We of­fer a trip to a lo­cal pub in Ger­many for guests who want to try out pub life. We have fon­due tast­ing in Switzer­land, so peo­ple can try the lo­cal food. We even pro­vide a trip to the sum­mit of Jungfrau, fully in­clu­sive. It costs just five eu­ros to go up the moun­tain. So when all those costs are put in, we of­fer great value.

While other cruise com­pa­nies have mobile pay­ment fa­cil­i­ties on their ships to en­cour­age trav­el­ers to spend more while on board, you seem to down­play that kind of con­sump­tion. Why?

There are two ap­proaches in this in­dus­try. One ap­proach is to get trav­el­ers on the ship with as cheap a fare as pos­si­ble, and then en­cour­age a lot of small pur­chases to make up for it.

This has been the “MBA” (master of busi­ness ad­min­is­tra­tion) model of the big guys for a long time, but peo­ple don’t re­ally like it. Those who can af­ford the trip would much rather say, “Let’s just pay for it once and be done with it”. Peo­ple don’t like to be nick­eled-and-dimed. Pre­mium and lux­ury prod­ucts are, in fact, more in­clu­sive.

The big cruise line model is bro­ken, but that’s our opin­ion. That’s why they have so much em­pha­sis on rev­enue man­age­ment and so on and so forth.

We have no sales pres­sure at any time. We are for se­ri­ous peo­ple who are in­ter­ested in cul­ture. They know the value of their money. When peo­ple come to us, at the end of the day, they will say they learned some­thing that they didn’t know.

They prob­a­bly have worked hard all their life. We shouldn’t take ad­van­tage of them.

Busi­ness is of­ten about tim­ing. Did you open your China of­fice be­cause you had no­ticed a grow­ing num­ber of Chinese con­sumers are will­ing to pay ex­tra money for pre­mium prod­ucts?

China is larger than the No 2 and No 3 mar­kets com­bined when it comes to the dol­lar vol­ume spent on out­bound travel, and that is ex­pected to con­tinue. The Chinese are get­ting wealth­ier. They can af­ford more in­ter­est­ing things. They have also de­vel­oped dif­fer­ent tastes.

So we are re­ally sur­prised that no­body has tried to of­fer a pre­mium ex­pe­ri­ence in this field. We be­lieve we can be part of the so­lu­tion. We thought we can make a dif­fer­ence in the mar­ket. So we think the tim­ing is right.

Vik­ing is an ex­pert in river cruises. Do you have any plans to roll out such ser­vices in China?

Yes. We are do­ing so to­gether with a com­pany in Chongqing. We do not em­ploy the staff di­rectly, but we train them and guide them. We have been sell­ing that ser­vice in the United States since 2003. But for other river cruises in China, we will do it only when we can pro­vide good enough value. We are not in this busi­ness just for immediate gains.

What will be the great­est chal­lenge for your busi­ness in China?

First is the size of the Chinese mar­ket. China is cul­tur­ally di­verse. The Shang­hainese point of view might be dif­fer­ent from that of a per­son from Chongqing. The mar­ket is big, so we will try to equal it.

Then there is the pric­ing guar­an­tee. We can guar­an­tee the guests that for the price of the prod­uct sold to them to­day, we will not then sell it to some­one else cheaper. If we do, we’ll give them their money back. It’s these types of things that build trust.

Some other com­pa­nies in Europe claim they can of­fer the same things as us. But they can­not. This makes it a lit­tle chal­leng­ing, as we have to over­come that breach of trust and show peo­ple that we keep our prom­ises.

What are the con­no­ta­tions be­hind the name “Vik­ing”?

The Vik­ings, from Scan­di­navia, were very courageous, bold sea­far­ers and river-far­ers. I am Scan­di­na­vian. We all like to ex­plore, ed­u­cate our­selves and con­tinue to ex­pe­ri­ence new things. So our con­cept is, we are ex­plor­ing the world with com­fort.

What is your work­ing phi­los­o­phy?

I pre­fer the man­age­ment team to agree on what we are do­ing, rather than to have a one-guy dic­ta­tor. If I’m in­volved in some­thing, I need to un­der­stand what I’m do­ing.

What’s your def­i­ni­tion of a great com­pany?

A great com­pany has three char­ac­ter­is­tics: You are loved by your guest; you are loved by your staff; and you are re­spected by your com­peti­tors.


The ocean­go­ing cruise ship Vik­ingSea, op­er­ated by Vik­ing Cruises Ltd, passes on the River Thames in Lon­don. Vik­ingSea is Vik­ing Cruises’ sec­ond ocean liner af­ter launch­ing Vik­ingS­tar in 2015 as part of the com­pany’s ef­fort to di­ver­sify.

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