Company Profile: MSC Cruises
An Italian-based cruise line is taking on Royal Caribbean and Carnival. Cruise industry veteran Rick Sasso is in charge of adapting Italian style to the line's new market.
Sasso and many of the guests greet each other by name -- they're travel agents he's been doing business with for years, there to check out the Opera. "Hey, Rick. Beautiful ship," says one. Sasso responds warmly in a New York accent unsoftened by more than three decades in the cruise business in south Florida. Encountering a couple and their grown son a few minutes later in one of the ship's elegant corridors, he shakes the young man's hand. "I've known your parents since probably you were this high," he says, gesturing two feet from the floor.
His longstanding relationships with the travel agents are pivotal for Sasso, 55, who took the helm as president and chief executive officer of MSC Cruises USA a year ago. MSC Crociere, MSC Cruises' parent, is established in Europe but relatively unknown in the U.S. In order to compete in a market dominated by behemoths Royal Caribbean and Carnival, the line will have to work hard to establish a brand identity among Americans.
Agents sell more than 90% of cruises. And Sasso, who got his start in the cruise business in Miami in 1971 as a sales manager at Costa, now a Carnival subsidiary, has never lost sight of who butters his bread. In addition to swapping pleasantries with the agents coming and going on the Opera, Sasso has been stumping around the U.S. for months like a politician, often devoting two or three days a week to meeting with groups of travel agents to talk up MSC.
MSC is also making it attractive for the agents to send business its way. It bases its 10% to 16% commissions on the full cruise price -- including port fees -- something most other lines exclude. That can boost a commission by 20%. It also pays a 10% commission on airfare, double the usual 5%. MSC has also dismissed the idea of putting a booking engine on its website to allow consumers to bypass travel agents.
"Rick has probably got the top reputation in the industry with travel agents," says Marvin Davis, chief executive officer of Cruise Planners, a big Fort Lauderdale-based cruise-agency franchise. "I know he's not coming in here with tubs. It's like your name is Tiffany and you're going into the jewelry business all over again."
Cracking the market
Sasso's high-carat reputation derives largely from having helped create Celebrity Cruises, which in 1995 made him its president and chief executive officer. Fine food and entertainment and a white-glove touch made the premium line an attractive takeover target for Royal Caribbean in 1997. He ran Celebrity for four more years after the merger but was pushed into retirement in 2002 when the company put both Celebrity and Royal Caribbean under a single president.
Sasso might never have been available to MSC but for serendipitous timing. After leaving Celebrity, he started Davanti, a custom-tailored clothing business, with his son Richard Jr., a lawyer by training who runs the operation. Davanti now has shops on more than a dozen cruise ships to display styles and fabrics and measure guests. It fills the orders in Hong Kong. The venture is growing, Sasso says, and recently opened a retail store in Coral Gables.
Still, Sasso was yearning to get back into the cruise business. By March 2004, he had joined several other cruise veterans in a plan to buy some ships out of bankruptcy proceedings. Then Gianluigi Aponte, chairman of Mediterranean Shipping Co. S.A., the Geneva, Switzerland-based parent of MSC Crociere, called and asked for a meeting.
Over a long dinner in Miami with MSC executives, Sasso learned that MSC, a big container-ship concern that had diversified into cruising in Europe in 1988, was embarking on a major cruise expansion in the U.S. and needed the skills of an American cruise executive to crack the market. Until then, its only U.S. presence consisted of a small sales staff in New Jersey and a ship that cruised the Caribbean in the winters.
"The story was compelling -- the growth, the scope," Sasso says. "It didn't take me long to decide I wanted to be part of it." Between 2003 and 2004, the line burgeoned from three ships to seven, including its latest, the 58,600-ton Opera, which joined the fleet last June. MSC has two more under construction. This winter, two ships sailed from Port Everglades. They will cruise the Mediterranean until the fall. Since taking over a year ago, Sasso has orchestrated everything from building a management team (mostly former colleagues from Celebrity Cruises) to opening offices in Fort Lauderdale (MSC moved into 13,000 square feet of space just after Christmas after holing up for seven months in temporary digs). By late 2006, MSC plans to have three ships in the U.S., including one year-round.
With ships that are smaller and more intimate than many plying the Caribbean, Sasso aims to position MSC as a premium line, touting amenities a cut above average. Seven-day cruises started at $545. Sasso is walking a fine line to retain what he calls the "Italian signature" that distinguishes MSC from the pack. The officers, chefs and waiters hail from Italy. Authentic pastas, pastries and breads are made onboard.
Recognizing that most Americans like certain American touches, however, Sasso is adapting MSC's Italian style. While Europeans favor cold cuts and cheeses for breakfast, for example, MSC added pancakes, waffles and eggs plus lox, bagels and cream cheese. At dinner, MSC now makes American coffee available immediately after the meal instead of later in the evening after dessert, as in Europe. The ships provide more ice for beverages, too. MSC stocks more towels in the staterooms. And it has added face cloths, rarely used in Europe.
To fine-tune service, Sasso has hosted onboard seminars to coach the staff. Waiters, for instance, have been trained to be more chatty and playful with American guests, who, unlike Europeans, relish such interaction.
Language hurdles remain an issue. Many Americans still speak only English and have a low tolerance for language barriers. Sasso is emphasizing onboard English lessons for crew members and has stepped up the English requirement for new hires. The line also added a sprinkling of American staffers in areas like guest relations and shore excursions.
Sasso will need every bit of his skill to carve a niche for MSC, which is sailing into crowded waters. The cruise industry has rebounded strongly from its bruising downturn after the Sept. 11, 2001, terrorist attacks, which sank a number of weak players. The dominant Royal Caribbean and Carnival Corp., which owns a portfolio of cruise brands, including Princess Cruises and Costa Cruises, have considerably more marketing muscle and momentum than MSC.
Ares Michaelides, chief operating officer of MSC Cruises USA, says he's confident that Sasso can create a successful niche. "You have a line that no one knows in an industry that is dominated by an oligopoly," he says. "Rick is a great choice for MSC. He can sell it to the travel agents, and the travel agents will sell it to consumers."