WorldCity Business Magazine

Making a splash

by Anne Kalosh

Making a splash

Container giant Mediterranean Shipping Company decided to make a serious play in the cruise sector and to do so, it went on a ship-buying spree, expanded itineraries and invested in major European embarkation ports.

Then it announced the name of its CEO to lead MSC Cruises in North America.

That appointment of Richard Sasso, a seasoned veteran of the U.S. cruise industry, caused a sensation. Here was a high-profile executive the former president of Celebrity Cruises and chairman of the Cruise Lines International Association going to a little known European brand.

Moreover, Sasso’s pledge that MSC would become “a major player in the cruise industry and in North America” sparked intrigue in a business controlled by a trio of powerful corporations.

With cruise ships now costing a jaw-dropping half billion dollars apiece to build, the barriers to entry are steep for aspiring operators. And the entrenched Big Three Miami-based Carnival Corp., Royal Caribbean Cruises Ltd. and Asia’s Star Cruises Group (the parent of Miami’s NCL Corp.) control 80 percent of the global cruise capacity.

That means, in the two years since he became CEO of MSC Cruises, Sasso has had his work cut out for him. Against recognized brands like Carnival, Princess, NCL and Royal Caribbean, MSC doesn’t even register with the traveling public.

Still, while few Americans had heard of MSC Cruises when Sasso signed on in 2004, thousands of retailers knew and trusted the man. Plus, in setting up the Fort Lauderdale office, he assembled a cadre of well-known staff. Many had worked for him at Celebrity.

“One of the main reasons for supporting the line is the management team,” said Donna Esposito, president of the National Association of Cruise Oriented Agencies. “They are a group of talented people who have proved they can create and deliver a superior product.”

The message Sasso has been hammering home is that MSC is no ordinary upstart. The founder of Mediterranean Shipping Co. is billionaire Gianluigi Aponte. An Italian now based in Geneva, Switzerland, Aponte launched his cargo venture in 1970 and forged it into the world’s second largest container fleet, with 294 ships and 1.2 million containers.

Aponte began dabbling in the cruise sector in the late 1980s, but it wasn’t until a few years ago that he decided to take a serious plunge. He set a $3 billion expansion plan, snapping up two new ships from a bankrupt line and launching an aggressive building program. In 2003, MSC Cruises fielded a trio of small vessels. Today its fleet numbers eight with four new ships due to sail in 2009.

This rapid buildup echoes the strategy Aponte used to push his container business to dominance. MSC remains closely held by the Aponte family.

“We’re blessed with having private ownership,” Sasso said, citing the ability to make decisions more nimbly and to focus on the long-term strength of the company rather than immediate shareholder returns.

MSC’s global cruise headquarters is in Naples, Italy, and is run by Aponte’s son-inlaw. The line stresses its European flair, Italian crew and cuisine. Passengers come mainly from Italy, Spain, Germany and the United Kingdom, as well as South America. However, to become a true major player, MSC needed a presence in North America.

Since Sasso came on board, the company has deployed two of its biggest, newest ships from Fort Lauderdale during the winter Caribbean season. Ninety-five percent of the passengers for the MSC Lirica and MSC Opera come from North America. Sasso’s team also supplies 10 percent to 15 percent of the passengers on MSC’s ships in Europe.

But Sasso will have to work hard to meet the company’s goal: to boost the total North American passenger component to 35 percent over the next five years and to operate more vessels from U.S. ports. To make that happen, he must improve U.S. awareness of MSC.

That’s where Sophia Loren comes in. The Italian actress is the cruise line’s new spokeswoman.

“Beautiful. Passionate. Italian. That’s her and that’s us,” said Sasso, echoing the company’s new tagline. A multimillion-dollar national branding campaign rolled out in the United States early this year.

At the same time Sasso is everywhere, talking up MSC. He keeps a busy speaking schedule and still calls on key agencies. Beyond raising awareness, the executive also has to ensure that the ships deliver the refined experience he’s touting.

Passengers are welcomed by white-gloved staff. Menus feature Italian regional specialties, and there’s a different risotto every night. The ships are quiet, without constant announcements and shilling of drinks, bingo games and art auctions.

“We’re here to pamper our guests, not to try to get them to buy more things while they’re on board,” Sasso said.

To make North Americans feel at home, the two Fort Lauderdale ships offer more flexible dining choices and comfort foods like lox and bagels. Theme cruises have featured baseball stars.

Sasso and his team frequently visit the vessels to ensure standards are being maintained. At first, there were service issues as the crew adjusted to U.S. travelers’ expectations.

Now ratings are climbing, and a growing number of agents are selling MSC.

“More and more, they’re liking what they sell,” said Marvin Davis, co-founder of Cruise Planners, an important national franchiser based in Coral Springs. “The most important thing to us is knowing the client is happy. MSC has gotten over its service jitters. Rick is right on top of everything.”

In the quest to raise MSC’s stateside profile, the European company couldn’t have made a better choice for its North American CEO, according to travel agent Davis. He has known Sasso since the 1970s when the 57-year-old MSC executive was an eager young salesman, pounding the pavement for Costa Cruise Lines, another European brand.

“He was as likeable then as he is now,” said Davis. “His handshake is his word. He’s honest, he’s loyal, he’s a gentleman’s gentleman.”

Maurice Zarmati, vice president of sales for Carnival Cruise Lines, also knows Sasso from decades ago when both were showing travel agents around their ships at the Port of Miami. He described his colleague and friend as “a kind-hearted soul who’s very humble, with powerful knowledge about the industry. He exudes enthusiasm.”

A sharp dresser with a dark tan and salt-and-pepper hair, Sasso is one of the industry’s most accessible top execs. At his office in Fort Lauderdale, he maintains an open-door policy, answers his own phone and eats lunch with his senior team members every day. It’s optional for them, but most take advantage of the opportunity to discuss issues.

“Being a good leader means giving visible support and being part of the process, not just supervising,” Sasso said. An early boss instilled in him the importance of teamwork and camaraderie.

Courting travel agents over the years has paid dividends. Agents sell more than 90 percent of all cruises and Sasso’s close ties with the distribution network helped propel him to higher positions in sales and operations at several lines.

And Sasso’s hands-on approach has also won him points. Several vacationers came back from a recent voyage impressed at seeing Sasso moving bags on the ship. “He’s visible and people like that the agent as well as the customer,” Davis said.

Ports and suppliers are also embracing MSC. Jim Lida, assistant director of cruise marketing for Port Everglades, said his facility is pleased to have MSC Cruises on the roster, as well as the company’s container vessels. He said Sasso takes the time to get to know the individuals behind the companies and vendors with whom he does business.

Sasso’s common touch emerged early on when, as a computer technology graduate from Miami-Dade Community College, he knocked on a cruise line’s door on a whim while interviewing in the same building for a different job. Costa Cruise Lines hired him on the spot.

He was a natural at sales, but a boss groomed him for bigger roles by urging him to soak up everything he could about the business, from technical operations to finance to the hotel side. After advancing to senior vice president positions in sales and passenger services, Sasso was scouted by the Greek shipping magnate John Chandris to help create an upscale cruise brand. Distinguished by superior food and service, Celebrity Cruises became an instant success at its 1990 debut.

Celebrity’s fleet ballooned and Sasso became president. Royal Caribbean acquired the company in 1997 and Sasso stayed on for four years. When Royal Caribbean decided to put its two brands under a single president, he was out of a job. But he wasn’t out of ideas.

Sasso formed a team to develop yet another new cruise concept. His name was linked with Virgin Group Chairman Richard Branson, and Sasso confirmed he held talks with Branson. But nothing had materialized when MSC’s Aponte came calling.

MSC is now swimming with the sharks as it takes on huge players like Carnival Corp., an 80-ship, 12- brand powerhouse. Among those brands is Sasso’s old line, Costa, now Europe’s No. 1 cruise operator and a formidable rival.

Laying out an ambitious strategy, Sasso predicted that in five years, “MSC will have year-round ships in America, probably three or four winter ships in America, cruises out of New York and cruises out of the West Coast.”

It sounds like a big leap from two seasonal vessels but, as Sasso pointed out: “I’m used to having nine or 10 ships. It’s not an impossible challenge.”