Posted on October 2, 2023
Virgin Voyages, the fledgling cruise company started by Richard Branson, initially faced rough seas. Its first two ships were to start sailing during the pandemic. Construction of a new terminal at the PortMiami hit delays. The company changed its name.
But today, business is surging amid what may be a record year for the cruise industry. Virgin Voyages’ terminal is bustling with passengers. The company’s modern, sleek headquarters in Plantation employs about 500 people. This month, it said it is introducing 19 new ports worldwide and 27 new itineraries through April 2025.
South Florida plays an important role. One of its three ships, Scarlet Lady, has operated out of the PortMiami since October 6, 2021. Miami-Dade also agreed to build a new berth, Terminal V, under a 30-year contract expected to cost the county $158.6 million.
Virgin Voyages recently named a new CEO: Nirmal Saverimuttu, who was previously president and chief experience officer, took over on September 7 after Tom McAlpin retired and moved to chairman of the board of directors.
Saverimuttu, who has worked for Virgin since 2006 and wrote the original business plan for Virgin Voyages, this week gave his first interview since becoming CEO to the Miami Herald at company headquarters. It has been lightly edited and condensed.
Q: What is Miami’s significance to the company?
A: It is the cruising capital of the world. If we were going to launch this brand, we had to be in Miami. And the port has been very generous in building a terminal for us.
Also, a big part of this is the Port of Miami and Mayor Levine-Cava’s strategy to make the port “ShorePower Ready.” [The terminal is part of Miami-Dade County’s Shore Power initiative which will have ships use electricity instead of fuel while docked.]
We were one of the first cruise lines to put our hands up and say we’d like to be part of that. We find the port to be very forward-thinking on issues of sustainability.
Q: What are the company’s future plans?
A: We have 27 new itineraries and 19 new ports, and we are growing the brand. We will have longer itineraries. The pent-up demand for Virgin Voyages is huge
South Florida is the base of the company. We’re always going to have one ship out of Miami and two ships in the winter. This is a huge partnership with the Port of Miami for us.
We see such strength in our short Caribbean product, the Scarlet Lady, our flagship. It is a great way to introduce people to Virgin Voyages.
Q: What was the first thing you did as CEO?
A: We brought everyone together at a big town hall and talked about what the next two to three years will look like. We talked about all the great things we’re doing and all the things that we can improve on.
A lot of the initial focus when I started was really helping the company move its culture away from a milestone-based culture to a performance-based culture, growing the business as a true operating business. That’s been a big focus of ours the last few weeks.
We launched three ships during the pandemic so, a lot of the way the culture was set up was really around milestones like taking delivery of ships and launching ships. Historically in our industry, new ships launch every year and a half to two years. To launch three brand news ships in such a short time is frankly unheard of. And we wanted to make sure people left the ships happy and the culture was right. A lot of the focus was making sure we established the product. There’s a lot of skepticism for new products.
Our satisfaction scores are record high, and NPS [a business measure of consumer satisfaction] is one of the best in the industry. We have re-booking rates on some voyages approaching 50% [People on board the ship rebooking.]
Early on when we were a startup, we focused less on profitability and what that meant. Now that we have the new funding in place, and the product established, we’re focused more on performance-based metrics like profitability, cost structure, and EBITDA. We talked a lot about what it meant for the business to be profitable.
Q: What were things brought up in that first town hall in which the company can improve?
A: We’ve got a lean crew here. We talked about how to get better in prioritizing the work we do, how to make sure our teams feel fully supported and empowered to be the best versions of themselves. We talked a lot about where we should be adding resources.
We also talked a lot about mental health. We’ve launched a whole series of programs around supporting our crew. We also talked about leadership development and making sure people feel recognized and rewarded for what they do.
Q: In a short time, your company has faced many setbacks. It changed its name, faced a lawsuit now settled. And each of your first two ships initial trips were delayed by one year. What have been the biggest challenges?
A: We’ve had our fair share of challenges as an industry, and we’ve had our fair share of challenges at Virgin Voyages (laughing.) Our biggest challenge was initially in the business plan, we were going to launch these ships 15 months apart. Typically, new ships are launched 18-24 months apart.
Deliveries were staged with our shipyard to be 15 months apart. So, the first ship was going to launch in 2020, second ship in the middle of 2021, and the third ship the middle to end of 2022. And our fourth ship to come at the end of 2023
What happened to us unfortunately is the pandemic. Our shipyard [in Italy] was able to keep themselves on time and deliver the ships as per the original schedule. However, we were not able to operate those ships because the industry was shut down.
When we came out of the pandemic, suddenly we had to launch three ships and fill them immediately versus filling them over a gradual period of three to three and half years. With three ships at once, our business plan was turned upside down in some ways. We should have been three years into our business plan.
Our biggest challenge was how to launch a new brand and new company, how to educate the consumer on what the product is and why it’s relevant to them, but at the same time, filling three ships worth of demand when we should have been filling one ship of demand.
Q: Has the launch of your fourth ship — Brilliant Lady — also been delayed?
A: Yes. We have a delay in construction and some supply chain issues. We have not announced a new date for that ship just yet. We’re working through all that. The ship is not yet finished. We still have not said where it’s going to go or be based.
Itineraries have also been delayed. Originally, she was supposed to sail out of San Juan starting later this year and early next year.
The good thing is most of those people who were booked on her have rebooked on a different ship. And we took care of them too. We’ve been very generous in offering compensation.
Q: How would you assess the cruising market today? What does Virgin Voyages bring?
A: We are still in our recovery from the pandemic, but we see tremendous growth going forward. We think next year will be a really strong year. We think the year after will be an even stronger year. I think you’ll see that with the industry
Traditionally when Richard [Branson] goes into an industry, he’s saying ‘I feel like this industry is missing something’ or ‘it is broken in some shape or form.’ For example, airlines don’t treat you well.
We don’t feel that way about cruising at all. In fact, we’re in this industry because it’s so great.
But we also see this trend where today’s modern consumer is looking for quality and attention to detail, but they are looking for it in a slightly less formal way. People are tending to move towards these products that are less formal, less stuffy, more relaxed, and more kind of choose your own adventure. We see a big opportunity in that.
Our industry is evolving that way too. Being a new entrant, we’re able to do a lot of those things from scratch.
We’re a premium cruise line but without the traditional rigidity or formalities you expect from a luxury product.
We don’t have dress codes on board. We don’t have set dining times. We try to make sure everyone can kind of be more relaxed on board. If you want to go to dinner and you want to wear jeans and a t-shirt, you’re more than welcome to do that. If you want to dress up in a suit, you’re more than welcome to do that as well.
We have a series of intimate restaurants with 200 people at most. The food is all made to order, not banquet like or coming out of a mass-produced kitchen. We stay late or overnight at ports.
That’s also why non-cruisers love us. We see a huge demand for people outside of cruising who’ve never been on a cruise. That’s good for the industry too.