Delivering the ?Wow?

MarEx:How did a Harvard-trained lawyer get involved with the cruise industry?
Goldstein:Actually, my father was the tax lawyer for the company from the very beginning. So it was in my DNA, and I became a lawyer and wanted to be involved with the industry. I ended up being a consultant to Gotaas Larsen in London, which was one of the three original partners in Royal Caribbean. I was there for nine months while applying to business school in Europe at INSEAD in France because I wanted to do an MBA. I was very fortunate that I went to a one-year business school because Richard Fain, our current Chairman & CEO, called me and said there was going to be a combination of Admiral and Royal Caribbean and he wanted me on his team. I had worked for him at Larsen before I went off to school and so naturally I said yes. That was in 1988. They had to make something up for me. I ended up playing company lawyer for the first year and a half, during which time Carnival tried to buy us, which was an epic affair that still ranks as the number one episode of my career by far.

MarEx:You then became head of marketing. How did that happen?
Goldstein:That was an accident of history. I took one basic marketing course in business school, but Richard understood that I had come to the company after my MBA to be a businessman. When we decided to create market planning and development in 1989, it seemed logical for me to go into this new area. We then hired Booz Alan & Hamilton to help us look at Europe and Royal Caribbean’s potential in Europe. Booz was very keen that there should be somebody they kept referring to as the “champion” of marketing in the company, and by the time the project was over they were recommending to Richard that I should be that one. So that completed my transition, and by 1992 I had all global sales and marketing and was also overseeing strategic planning.

MarEx:Did you ever think of changing the company name? Royal Caribbean goes to a lot more than places than the Caribbean.
Goldstein:In 1996 we did a comprehensive investigation of our name because we were becoming more global. We hired an outfit called Landor Associates, who are world-renowned branding consultants and by far the most expensive consultants I’ve ever encountered. Their original take was the name should probably change and the crown-and-anchor logo too. And I’ll never forget meeting in the conference room for the first feedback report, and they said we’ve talked to a lot of people about your logo and we’ve advised a lot of companies about their logos and in all of our collective experience we have never met any people at any company with the fidelity to their logo that your people have to the crown and anchor. We’ve never seen anything like it. It is to our eye as consultants too masculine, too harsh, too severe for the vacation business that you’re in. But based on what your company people feel about it, we would never advocate changing it. We do have some things we’d like to do with your identity, and that’s how we ended up with the rectangle.

As for the name, we decided there was already far too much equity in it, particularly with the North American travel agency community, which has been so good to us. But we did change from Royal Caribbean Cruise Line to Royal Caribbean International to signify that we were growing up as a brand. Recently it came out from some research that we did in another part of the world that the combination of “Royal” and “Caribbean” was seen as a strong positive, and I’d never heard that before. The feedback was that “Royal” conveys upscale and high quality while “Caribbean” conveys laid-back and relaxed, and that’s a pretty formidable combination when it comes to vacations. People from China to Argentina know that the name stands for a type of vacation, not just for the Caribbean.What was your biggest marketing challenge?

The biggest challenge was maintaining the highest levels of customer satisfaction while taking delivery of increasingly larger ships. From 1999 to 2003 we took delivery of five Voyager Class ships and five Radiance Class ships. They were followed by the Freedom Class and the Oasis Class. We led the modern cruise industry into the era of newer types of exciting ships with features people had never dreamed could be onboard. Most importantly, we figured out how our men and women onboard the ships could continue to deliver the highest level of satisfaction on ships carrying 3,000-6,000 guests at a time, which a lot of people doubted could be done. We did a lot of effective selling and marketing in that time frame, and we pioneered our ability to deliver the “wow” with these kinds of ships.

MarEx:You’ve taken a lot of the features of the Oasis Class ships and brought them down to the other ships in the fleet. Was that the original intention?
Goldstein:We call this our Fleet Revitalization Program and no, we did not build Oasis and Allure thinking about whether features could be taken back into the fleet. That was not on our minds. We were just trying to make the two ships as compelling as possible because features like Central Park and Boardwalk could not possibly be moved to any other ships. But as Allure came closer to service and we hadn’t ordered anything beyond it, we realized we were going to be facing a four-year gap between new ships, which is the longest gap in the brand since the 1980s. So we felt pressure to address the existing ships because the features on the Oasis ships were so stunning that we wanted to boost the capabilities of the older ships so that the brand proposition would be as consistent and harmonious as possible across all 22 ships. And to our surprise we realized we could do more with migrating specialty restaurant concepts, entertainment concepts, and technology concepts to the older ships than we ever thought possible. It’s all part of delivering the “wow.”

MarEx:What are some of the major issues facing the industry at this time?
Goldstein:The great news is that the world is opening up to cruising, and that’s happening in Latin America and Asia as well as Europe and North America. So the major issue facing the industry is steering a path toward that global opportunity, realizing that it’s quite clear there’s going to be obstacles of various sorts in our path from time to time. The announcement in December that CLIA (Cruise Lines International Association) is assimilating approximately eight different industry associations with different geographical bases into one new CLIA is a really important development. It allows the industry to speak with one voice to deliver the positive message that cruising is a wonderful vacation and to deal with the various governmental, technical and regulatory issues that may occur. I think it’s a sign of our maturity as an industry.

MarEx:You are one of the few CEOs in any industry who blogs. Tell us about that.
Goldstein:I sometimes ask journalists why they read my blog because they might have better things to do with their time. Their answer characteristically is “It’s not marketing speak,” which is really interesting because obviously it is a marketing tool for us. As I like to say, what business casual is to formal wear, my blog is to a press release. A press release is very formal, very stylized and structured to convey information. It’s absolutely marketing speak in the truest sense. But it doesn’t convey the personality of the quoted person. The blog gives me a chance to speak as myself. I wrote one the other day on dress code, and 23 pages of single-space comments came back on this one subject with slightly a majority saying you really should enforce the dress code and the rest saying they should be able to wear whatever they want. It was just remarkable how this one topic out of thousands could represent such passion, and my writing a few paragraphs about it lit the torch.

MarEx:Isn’t it a dangerous place for you to be?
Goldstein:I think it’s a necessary place for me to be. There have been a number of situations that I don’t know how we could have handled adequately without my blog. One of them was the earthquake in Haiti. We had media down our throats from all over the world: “How can you keep sailing there in the face of this tragedy? This is appalling that you’re prioritizing profits over this emergency.” My blog was the center of our outreach efforts for our ability to say the Haitian government wants us there. The people need us there. Every single cruise ship that stops there is bringing relief supplies. So that was a huge thing. I was also the first person in the industry to comment on the Costa Concordia situation. Obviously I took a risk by putting myself out there, but the feedback was tremendously positive. So it’s a risk. It’s always a risk. But it’s a risk I feel is well worth taking.

MarEx:We understand you are a marathon runner. Any other hobbies?
Goldstein:I’ve actually never run a marathon. I am a Masters Track Runner since I race on tracks for the most part. There are certain track meets throughout the year that I point to, and I train year-round and have a coach. I also run 5Ks and 10Ks on the road because there’s just a lot of those. So I’m either on the track, the road, the treadmill, in the gym, in the pool, doing something every day related to my fitness training. In addition, I am a very avid table tennis player. I have an instructor and play competitively and in charity events. Last night I went back for the first time in a few years and played in Jason Taylor’s, the former Miami Dolphins football player, tournament. This time they let me play with my instructor. The other three times I played with very nice people, generally well-known celebrities, and none of them knew how to play Ping-Pong and they were very brief matches. It was a different story this time. We won the tournament and had a pretty good match in the semi-finals and then a humdinger in the finals. I think we won the first game 11-5, but we were behind 10-6 in the second game and facing four game points. We ended up winning the game either 14-12 or 15-13. The Jason Taylor Foundation. That was a lot of fun. Proceeds benefit children’s programs.

MarEx:What advice do you have for young people starting out in the industry?
Goldstein:It hasn’t been published yet, but I’ve actually written a blog on that exact topic. A young reader posted recently that he would like to work for a company like Royal Caribbean and what advice did I have, so I drafted it. It’s done, but it hasn’t been posted yet.

MarEx:We look forward to reading it. Thanks for a great interview.