The positioning of the Costa brand is clearly to represent the best of Italy through an unforgettable experience that we call 'Felicità al quadrato'.
Article from CruisesNews magazine, issue 47 – December 2018
Our business strategy is defined by our commitment to remain industry leaders in Europe and to continue offering unique experiences to our travelers. This is our goal, and the new ships must contribute to achieving it.
Muglia began his career in consulting firms specializing in distribution development. He then joined Danone in 2008 and, after eight years in various roles with increasing responsibilities in sales, trade, and consumer marketing, joined Costa Cruises in 2016 as Global Customer and Marketing Intelligence Director.
Mr. Muglia, your arrival in Spain coincides with what appears to be a period of recovery for the Spanish cruise market, after years of decline. What are your first impressions of our market? Are there reasons for optimism?
Indeed, if we look at the number of Spanish travelers who have opted for a cruise vacation in recent years, a positive trend is evident. It is noteworthy that, as a result of the increase in passengers (510,000 in 2017, a 6.4% increase compared to the previous year), Spain has improved its position and now ranks as the fourth European country in terms of cruise passengers. In addition to being a leading destination, Spain is also becoming a benchmark as a source market. Fortunately, there are signs indicating some economic stability after a challenging period, and Spain is positioning itself as an increasingly dynamic market with significant growth potential and sufficient strengths to continue developing a successful cruise industry. It is true that, at the same time, we need to work harder as a sector to showcase the possibilities of our offerings and ensure that more and more people discover the experience of traveling on a cruise and the advantages it offers.
Your predecessor, Raffaele D'Ambrosio, has played a leading role in CLIA Spain since his arrival in our country in 2016. What is your opinion of CLIA's role in the cruise industry globally and in Spain?
CLIA plays an essential role both in Spain and internationally. It is crucial to bear in mind that the cruise sector has its own unique characteristics, challenges, and specific needs that are common to all the companies within it, while also differing from other sectors of the tourism industry.
As a result, it is essential to have an organization that unites the sector's interests, establishes common, agreed-upon courses of action, and acts as a single voice on issues of fundamental importance to the industry and that affect us all.
Raffaele D'Ambrosio's work has been particularly positive for the organization, and at Costa, we will continue to collaborate with CLIA, facing shared challenges and successes.
From autumn 2019, the Costa Smeralda will become our company's flagship, and the start of its operations will be a major milestone for us. It is a very special ship because it shapes and defines our future.
You come from the Italian market. What are the most significant differences you've found between the Spanish market and your own?
Cruises are better known as a vacation alternative, which in Spain represents a great opportunity at all stages of the purchasing process. Even so, consumers in both Italy and Spain still value cruise brands having a strong and relevant presence as they make their decision.
Furthermore, in both countries, the wide variety of destinations and their historical, artistic, and gastronomic appeal offer a great opportunity for developing the cruise product and also for having a positive local impact.
Previously, you worked for Costa in the marketing department. How do you transform a vast amount of data, information, and knowledge into a dream cruise? How do you use tools and strategies to create the ideal vacation?
It's often said that data is the gold of the 21st century. We have increasingly data-driven marketing tools that allow us to better target offers and achieve complete personalization. We must strive to offer each consumer the best solution tailored to their needs, all while improving the entire decision-making and purchasing process through digitalization.
These tools also allow us to work alongside our strategic partners, travel agencies, to jointly generate incremental demand. For example, by using geolocation-based data management systems with them.
Furthermore, the data we collect onboard—for example, from satisfaction surveys or purchases—is used to continuously improve our products, offers, and retail space to better meet the needs expressed by consumers.
Continuing with marketing, how would you rate Costa's brand positioning in the Spanish market?
Costa's brand positioning is clearly to represent the best of Italy through an unforgettable experience we call 'Felicità al quadrato' (Happiness Squared). This positioning is present in everything we do, as well as at all points of contact with the consumer (television, media, website) and with the travel agent, our main strategic partner, primarily through CostaExtra.
As a company, Costa Cruises has over 70 years of history and is a pioneer and innovator in offering its customers a quality experience based on excellence. With a carefully curated range of services, a modern fleet, and unique itineraries, we also structure our offering around a more sustainable value proposition, with new, more environmentally friendly ships and a clear commitment to customer satisfaction.
We are a leading international company and we want to be the preferred choice for Spaniards every time they decide to embark on a cruise. Thus, we also want to go further and be their first time, to be the company that inspires and encourages them to choose that first cruise to spend their vacation.
Barcelona is and will continue to be a key port for our operations. The city's international tourist appeal, along with its tradition and experience, is a crucial part of our roadmap for the future. For Costa, Tarragona also represents a success story in public-private collaboration between different partners and authorities. Valencia is making a strong comeback as a destination for the 2019 season.
Costa continues to invest in Barcelona, but also embarks in Valencia, Tarragona, and other ports. Are we seeing a diversification of your company's embarkation ports?
Barcelona is and will continue to be a fundamental port in our operations. The city's international tourist appeal, as well as its tradition and experience as a cruise destination, means it remains highly attractive to European travelers and is a key part of our roadmap for the future.
Complementarily, and as part of our intention to offer new travel experiences that satisfy and positively surprise our customers, we believe it is also important to invest in new destinations with different offerings. A clear example is Tarragona. We began operating there in 2017 with the Costa neoRiviera, this year we have opted for the Costa Victoria, and in the 2019 season we will include the Costa Fortuna in our itineraries from this city.
Valencia as a destination returns strongly in the 2019 season, also with the Costa Fortuna, recently remodeled and making an exciting itinerary that will take our clients directly to Rome through the Strait of Bonifacio, then visit La Spezia (Pisa, Florence), Genoa, Marseille, Barcelona before returning to Valencia.
How have sales been for the Costa Diadema and Costa Fascinosa from Barcelona this summer? And what are your expectations for the 2018/2019 winter season from Barcelona? What is your overall view of the winter cruise market in Europe?
In line with other destinations, sales for cruises departing from or calling at Barcelona have performed very well, and we closed 2018 with results in line with our expectations.
The cruise market is typically characterized by a demand curve still closely tied to holiday periods, with particular emphasis on summer cruises. At Costa, we have been working specifically with travel agents for some time now on initiatives to stimulate demand during the winter season. For example, by targeting segments of the population who can travel at any time of year and by promoting the advantages of our product for hosting conferences and other MICE events.
Fortunately, our efforts are paying off, and we expect a very positive winter season.
This summer, the Costa Victoria offered a week-long itinerary dedicated to beaches and entertainment, departing from Tarragona and stopping in the Balearic Islands, Savona, and Olbia on Italy's Emerald Coast. How has this new product performed? What are your thoughts on the Costa Cruises/PortAventura partnership?
For Costa, Tarragona is a success story. It has become a clear example of how public-private collaboration between different partners and authorities can translate into shared success for all. The decision to add the Costa Victoria (2,394 passengers), a larger ship, to our operations from Tarragona in 2018 was based on the success achieved in 2017 with the neoRiviera (1,800 passengers). In fact, in 2019 we will again increase our capacity on itineraries to the city, thanks to the addition of the Costa Fortuna (3,470 passengers).
A key part of the success of these operations has been the excellent collaboration with the Port of Tarragona, as well as with local entities. These agreements have allowed us to offer a wide range of excursions, focused on different interests, to explore the region's historical and artistic heritage. Furthermore, the agreement with PortAventura World has allowed us to enrich our offerings, and we have introduced the option of extending the trip and staying one or two nights at the park, creating a complete and highly attractive travel experience.
Cruises are more widely known as a vacation option in Italy than in Spain, which presents a significant opportunity at all stages of the purchasing process. Even so, consumers in both Italy and Spain still value a strong presence of cruise brands as they move through the decision-making process.
In 2019, after more than five years, Costa will add a new ship, the Costa Smeralda, to its Mediterranean fleet. What impact will the arrival of new ships, both its own and those of the competition, have on the market?
Our business strategy is defined by our commitment to remain industry leaders in Europe and to continue offering unique experiences to our travelers. This is our objective, and the new ships must contribute to it.
Furthermore, we are aware that none of this will be meaningful without a robust sustainability policy. For this reason, we are focusing a large part of our efforts on optimizing our operations, as shown in our annual Sustainability Report, through multiple initiatives. These include our commitment to new ships powered by LNG (the world's cleanest fossil fuel), which will arrive in 2019 and 2021, and 4GoodFood, an ambitious program through which we aim to halve the food surplus generated on board by 2020. The final phase of this program, the management and utilization of surplus food, culminated in the recent launch in November of our agreement with the Food Bank.
The Costa Smeralda, arriving in 2019, is a clear example of this commitment to sustainability and the kind of company we aspire to be.
The Costa Smeralda has a capacity of around 5,000 passengers. Is the market ready for this scale of ship? What advantages does this size offer?
Starting in the fall of 2019, the Costa Smeralda will become our company's flagship, and the start of its operations will be a major milestone for us.
It is a very special ship because it shapes and defines our future. It will be powered by LNG (the cleanest fossil fuel in the world), which completely eliminates emissions of particulate matter and sulfur oxides in port and at sea, clearly demonstrating our commitment to a more sustainable future.
Its size also responds to a market need. Its capacity will allow us to offer a wide range of vacation customization options (through numerous leisure activities, themed dining, shows, and onboard experiences), ensuring that the cruise experience enjoyed by a family or couple is very different from that of guests in the nearest cabin.
We will also be fulfilling the demand for one of our customers' favorite itineraries (Barcelona, Palma de Mallorca, Civitavecchia/Rome, La Spezia/Florence, Savona, Marseille, Barcelona). Furthermore, the ship's design, innovation, and technology put us a step ahead, and we are eager to showcase it to our customers.
Another crucial factor for us is the necessary investment to generate demand in a market that offers so many opportunities. We continue to carefully manage our media investment plans in Spain and our other key markets to ensure we remain top of mind and relevant to consumers' desires.
