“Loyalty programs have gotten it backward” - Sam's Exclusive Interview with CEO of Virgin Voyages Nirmal Saverimuttu

Yesterday, I had the opportunity to talk with Virgin Voyages CEO Nirmal Saverimuttu in regards to their loyalty scheme, and their recent status matching promotion. But he also had time to answer some questions regarding their recent pullback from Portsmouth, and how they look to attract future travellers.

I hope you enjoy reading this as much as I enjoyed our conversation together.

CEO of Virgin Voyages Nirmal Saverimuttu

You've spoken recently about brands having “gotten it backwards in regards to loyalty”, what gives you that opinion?

I think generally as we think about life and think about Virgin, we've noticed that travel experiences nowadays cost a lot more and you get less. It’s something that we've seen across the board. I'm sure as we talk a lot about our own Sailors, and a lot of consumers, there’s a general frustration that more and more travel experiences are more expensive and what you used to get isn't the same anymore.

That typically happens in a world where prices go up, and companies look to manage the bottom line, and sometimes take a very short-term view of the world. Obviously in Virgin, Richard has always taught us you've always got to take the long term view, and the customers.

So it's an environment where we feel like we should actually be giving more. On Virgin Voyages we're adding more entertainment, we're adding more food, we're increasing the quality we offer on board and we're seeing more people are trying us. They're mentioning that they see the quality of those voyages continue to increase and the value of money and they kind of lament that they wish that other travel experiences were the same.

You've opened up status matching to about 35 different programs. Status matches from other cruise lines are fairly standard, but extending them to airline loyalty programmes is far more common, what are you trying to achieve by casting that broader net?

We want more and more people to set sail the Virgin way. We think we offer an incredible travel experience, but more importantly the world today needs a lot more joyous experiences. One of things we hear from people on Virgin Voyages louder and louder is that people just love the time on board our ships. They love the kid-free nature of the holiday. They love the fact that they can relax and they can rejuvenate. They can connect to a loved one or to a place or a moment. 

So we hear that loud and clear. And again, right now this time of year for us, it's about spreading more joy. And so the more people we can get to experience a Virgin Voyage, in terms of offering to airlines and hotels (loyalty schemes), we do see a very big part of our business as people who have never been recruited (to cruise) before.

Cruising offers a tremendous holiday. You unpack once. It's quick and great value for money. The quality of food and the entertainment is unmatched. We offer great service onboard our ships.  So we wanted more and more people to experience that. Clearly people who are used to Airlines and hotels and Cruise Line loyalty, they're used to some kind of perks when they experience something for the first time.

So we thought, why not give them an opportunity to try us. Have a taste of what an amazing holiday can be like on a Virgin Voyages ship, and from there, hopefully, they'll come back.

What makes you different from other cruise lines and why do you have up to 50% return customers on some voyages?

Richard challenged us to create the kind of cruise line that he would be proud to go on, and that he would like to go on with his friends. I’m very proud to say we have done that. We are now the number one cruise line. We’ve won Travel + Leisure’s World Best award three years in a row, not just with a record score, but with a record margin, just to prove the quality experience. 

The reason people book us for the first time… we have no kids on board, which allows us to create a much more elevated and sophisticated environment on board. You don't get any big dining halls, no buffets, all the food on our ships is made to order, nothing but small intimate restaurants that feel like you're dining out in London or New York. We don't have any stuffy formalities on board our ship. So we don't have any dress codes, no fancy dress, you can just be what you are and feel relaxed overall. 

We also include a lot more in our fares, we don't try nickel and dime people. I know it's a very American phrase, but we include Wi-Fi. We include still and sparkling water that is filtered. We include fitness classes and all our dining. We don't charge you extra to dine at different venues. We include all our entertainment. So, when you come on board our ships, you don't feel nickel and dimed, you feel actually quite glamorous and you feel like you're getting great value for money.

They also book us because cruise ships are known for these giant experiences, say five or six thousand people. Our ships are much more boutique so you feel like you're one boutique hotel on the ocean, and that's very appealing to cruisers. But it’s also very appealing to people that are non-cruisers because a lot of the kind of people that we attract are the people that are staying in the boutique hotels of the world.

They want that more intimate, more local experience, and our ships are designed that way with people that have never designed cruise ships before, like Tom Dixon out of London or Roman Williams out in New York so they caught a real kind of Boutique hotel feel for the ships. 

The reason people rebook us at 50% rebooking rate, the number one reason people tell us they rebook is our crew. They love the fact that our crew offer authentic Virgin style and service. We place a very big emphasis on our crew and our culture onboard our ships, making sure our crew feel like they can be the best version of themselves. 

We have a saying in Virgin, we “hire for attitude and create the success”. So, we hire our people, based on their personalities, and we allow them to be themselves, we allow them to flourish and we also treat our crew differently.

Most cruise lines don’t actually treat their crew very well in terms of benefits. We give our crew free WiFi, we give them food equivalent to the passenger areas, we give them coffees and teas, we pay for their uniforms, we pay for their travels, we make sure that our crew know how important they are because to me, any great Virgin company you’ve got to start with your crew, 

If you treat your crew well, and make sure your crew members feel like they are the most important part of your company, then everything flows from there. So that's the reason why people rebook with us, and where we get that 50% rebooking rate. 

I'm really proud that we've been able to create that Virgin culture amongst our team.

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It’s interesting because the cruise industry does have a little bit of a reputation for low pay, you stick around for one contract and then you go back home. So it's interesting that you're investing in your crew as part of the experience. 

Oh, it's absolutely important. Right? I mean when we designed this experience, the first thing we thought of was, what can we do to redo the crew experience for recruitment on a cruise ship?

You know, with Virgin we always start with a blank sheet of paper, and we say, okay, what can we do to rethink things? Like certain things within the industry are great. We want to make sure that we do those well. I call this brilliant basics and then certain things we want to make sure that we do special. That we can provide our signature experience or signature Virgin twist on it. 

The crew experience was one thing that we had to make sure that we improved, because ultimately this is about a service experience. It is about the hospitality experience. If our crew members are unhappy, if our crew members don’t feel empowered to be the best version of themselves, then I know we won’t be able to deliver that great experience onboard. 

So it always starts with that. If you think about the success of Virgin I would say it comes down to this simple view of Richard’s, and it sounds trivial, but it's so powerful, you get it right. You treat your people well, you treat your customers well, and your business will thrive. But, you have to do it in that order. 

You can't think about chasing profit first, which again going back to the start of this conversation, with a lot of travel companies nowadays, it's always about how do I maximise profit? How do I maximise margin? How do I charge more? And more increasingly how do I cut costs, so I can increase my margins? And for us, we actually start on the other side, which is how do I make sure my crew members are getting the best possible experience? How do I make sure my customers are getting the best possible experience? And I know that that will be rewarded in loyalty, and repeat rewarding business, and as a result I know that the bottom line will thrive.

So if I was to match my Virgin Atlantic Silver status to you, as one of the participating programs, what extras do I get? 

So Blue Extras is our entry level loyalty perks. Typically they're reserved for people who've had to sail at least three times with us to get Blue Extras. You get speciality coffees at our coffee shop, you get access to laundry. You also get a cocktail party and you get a concierge sailor support service from us.

But essentially think about it as our entry level loyalty program, you get a taste of what loyalty feels like in Virgin Voyages.

But for those that have sailed five times or more, then we offer Deep Blue Extras, which also offers another enhanced level of perks. But first of all, if you're a Virgin Atlantic Silver member we say, come on board, give us a go and experience some loyalty up front because we'll reward your loyalty that you earn somewhere else.

So you speak about not nickel and diming the customer so much in your experience, which means you have a bit more of a flatter approach to how your cruise lines work. Does that make it difficult to find a differentiating factor when it comes to loyalty? 

It's a really good point actually, the fact that we include a lot more in our fares, sometimes from a promotional perspective or even a loyalty perspective because typically what happens is that companies will take a lot of our inclusions and they’ll use them for promotions or loyalty. 

They might include WiFi for example, or they might include gratuities. But in classic Virgin style we always say, well that's not the reason not to offer it, right? We should offer it because let's face it, something like Wi-Fi, is a basic human right at this point.

So it shouldn't be a promotional inclusion, it should just always be included because that's what the customer wants and what they expect. You’re right in that when we designed our loyalty program we had to think through the perks that make most sense for people.

Now, the good thing is, as we talk to people about what perks they were looking for, it’s things that made them feel just a little bit extra special. Because we have taken care of the basic essentials of your holiday, right? Your still and sparkling water, for example. But we also include soda, so you don't have to pay extra for Cokes. Typically again those are promotional inclusions. So, your basic holiday necessities are included. 

Then we say, okay, what can we do to make sure that you feel recognised and rewarded for being loyal?

So things like premium coffees are for-charge elements onboard our ships, free coffee is the number one thing people love about our loyalty benefits. Laundry is something that people love as well. They love being able to come, unpack once, and typically it's used at the end of the Voyage, so that they can do their laundry and go back home and not have to do the laundry after you come back through your holiday. We all have that post holiday blues as you know, right because post holiday blues is actually having to do the laundry.

While you're right in that technically it can cause a bit of a structure impediment. The reality is the consumers we're talking to, all of the things they want from their holiday are included, and now we can give them some extra special structures on top of that to make sure they feel a bit recognised for what they do for us.

Things like a cocktail party as well. They can meet other loyalty members, other people that are travel enthusiasts. It's amazing how much of a community we build on our ships. People love the fact that when they come on their ships, they just see everybody being comfortable, being the best versions of themselves. It creates a community-like feeling onboard, it's why you get such a high degree of rebooking, it's because people just love being on a Virgin Voyage. If I can give you one other thing a travel agent once said to me, she said, when you step onboard a Virgin Voyage, it's like you leave the world behind as it is, and you step into a world as it should be. It’s an incredible experience we create onboard, an incredible community, and that’s why loyalty is so important to us.

The famed "Scarlet Night" onboard Virgin Voyages

Just to pivot slightly, we primarily have a British audience. I live just 15 minutes north of Portsmouth, and so we've seen your ships in and out of the dock before. But not too long ago you made a little bit of a pullback from Portsmouth, just talk me through why this was?

First of all, I'm very proud that Portsmouth is the only port in the world that's had all four of our ships calling at her.

It was the very first Port that we went to with Scarlet Lady back in 2020. She recently had a call from Brilliant Lady early this year when we launched our fourth ship. So Portsmouth is very near and dear to our hearts. We love the city of Portsmouth and actually the Port of Portsmouth in particular have been great partners to us. We are offering Portsmouth selectively through (20)26 and through (20)27, we have an eclipse sailing that's sailing out at Portsmouth which is a really fantastic sailing. 

But what we heard from some of our audience was that they wanted to go to some more interesting places and more far off destinations. So what we see is a lot of our UK audience now is actually coming to us in the Caribbean, and going on things like our 10 night sailings on Brilliant Lady into Colombia, and Aruba, and Curacao, and the deep Caribbean. We also see a lot of people going to Barcelona and Athens, before going on our Mediterranean sailings, usually our seven night sailings, but it can be up to our 10, 11 night sailings. 

We just announced a fantastic sailing that goes to Cairo and overnights there. We typically do late stays and overnights in all itineraries and so what we kept hearing from people was that they loved being on those shorter cruises out of the UK, but they now wanted to go to more interesting places and for longer voyages. 

People said they really love the ships, but they also like the destinations we're going to. And so, almost like that first few years of Portsmouth, we were giving people a taste of what Virgin Voyages was, allowing the market to understand who we were, how we fit into it.

We’re seeing a lot of people hop on a Virgin Atlantic plane, come into Miami, get on a Virgin Voyage, but not just get on a four night voyage, which is our bread and butter product in the US. But they’re now getting on the seven night voyages, and the 10 night voyages because if you're going to come across the pond, you want to go somewhere more interesting on one of the longer voyages with us. 

So it's been really interesting to see the demand for our Caribbean voyages really grow double digits over the last couple of years. And so I can see that our itinerary pattern sort of reflects that, and reflects some of the feedback we've gotten from people.

In the UK, I can go to a Virgin Holiday’s shop, I can buy my Virgin Atlantic flight along with my Virgin Voyages cruise. Do you see a situation where I might be able to pay with my Virgin Red points for the entirety of that as a single package?

We’d love to. Virgin Red is a very important part of the Virgin group strategy and the Virgin Voyages strategy. It's the essential part of what really stitches the companies together. I think about loyalty and two components. There's recognition for my loyalty, so that’s typically some kind of experience perk whether that’s the coffee, the laundry, or priority service, and then in the airlines there’s typically some kind of priority boarding. There's another element apart from recognition which is a reward, and that's where points become so interesting in loyalty, because points allow us to create a currency that rewards you for your loyalty and then use that currency to get more benefits from the brands.

At Virgin, we have not in the past done a great job of making sure that we could stitch together the company to make sure that we could reward a Virgin Atlantic customer with a Virgin Voyage, or a Virgin Voyages customer with the Virgin Atlantic flight. What Virgin Red allows us to do is to provide that common currency that helps us to provide that benefit, because that's what the customer expects.

Our sailors and customers are expecting those kinds of rewards from us. Virgin Red is our first step into that. My hope and vision is that at some point you'll be able to do exactly what you said. You'd be able to come into a Virgin Holidays store, you'll use your Virgin Red points so you'll be able to buy yourself a flight, buy yourself a hotel, buy yourself a voyage and have the most amazing Virgin getaway, all powered by your loyalty to Virgin.

It's December 23rd, a slight Christmas theme on this, so if you were to get Virgin Voyages one gift for Christmas for the year ahead, what would it be?

We have this ambition when crew members join us and we say to them that we want this to be the best gig of their lives, that they look back and they say that they never regretted taking a job with Virgin Voyages and it was the best job they've ever had.

Obviously that's a very lofty standard and across all 6000 of our crew. It’s probably pretty naive for me to say that they all feel that way. But I want them to feel that way. 

But my Christmas wish would be, if I could wave a magic wand, I'd want every one of my 6000 crew members to be able to say to you, “This is the best job I've ever had”. But obviously, I'm not going to do that with a magic wand, right? I'm going to keep fighting with that, I'm going to keep working towards that as a leader. I think it's very important as a Virgin business to always take a people first approach to life and so we're going to keep working very hard to make sure that every one of our 6,000 crew members says, “This is the best job we've ever had”.

For all the details on Virgin Voyages status match scheme, you can click here to read our full write up.

Points Well Made thanks Nirmal and his team for giving us their time for this interview.

Sam

This interview has been edited for lengthy and clarity.

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