The Rise And Fall And Rise Again Of Viking's Torstein Hagen

The 25-year ascent of Viking to become one of the world's most consequential cruise lines is quite a story. Especially when it is told by the company's forthright founder Torstein Hagen.

"I'm going to talk about where we are and where we're going," Hagen said to guests assembled in New York City for the naming ceremony of the line's 10th ocean vessel, Viking Saturn. "This is also known as propaganda."

As the crowd laughed, Hagen added: "In 2021, this would have been a prayer exercise."

There were likely some pleas for divine intercession back in 1997 too, when Viking was founded by "two guys with two mobile phones." At the time, Hagen was scrambling to recover from a failed business deal. "I had lost everything I had in life," he told the audience, revealing that he was forced to sell a painting off the walls of his house to pay off his last debts.

After selling a forward tax loss deduction for $1 million, multiplying that to $5 million through high-stakes investments and with the support of some trusting investors, Hagen was able to purchase four Russian river ships for a bargain basement price.

Twenty-five years later, Viking has expanded exponentially from the Volga to the great rivers of Europe, where the company's river fleet now commands more than 50% of the marketplace.

Since its first ocean vessel took to the water in 2015, the line has launched nine more identical ships and won many cruise industry awards for the quality of its product. Viking is also a growing force in the fast-growing expedition cruise market.

Hagen himself has become a familiar face to many North Americans, thanks to the company's long-standing partnership with PBS and shows like Masterpiece Theater, where the audience of affluent, educated North Americans has turned out to be the ideal target for what Hagen refers to as "the thinking person's cruise."

From four ships in 1997 to over 100 today, from "two guys with two mobile phones" to 10,000 global staff and 11 offices around the world, and from a few thousand intrepid Russian river cruisers to more than 470,000 annual guests, the Viking invasion of the cruise industry is the stuff of legend.

The pandemic threatened to derail that success, but Viking adapted, persevered and came out stronger than ever, with 2022 revenue topping $3 billion - equal to the strong pre-pandemic year of 2019.

This year will likely be stronger than ever across the travel industry as the flood of pent-up pandemic demand crests, but for Viking, 2024 is looking very good already, with Hagen reporting that 49% of ocean capacity and 31% of river capacity is already sold.

Clearly an independent and at times contrarian thinker, Hagen has found success while defying industry norms. As major cruise lines try to outdo themselves and each other with the facilities on each new ship, Viking has found a formula that works and is sticking to it.

The massive Viking river fleet consists of nearly identical 190-passenger ships, and so does the fast-growing ocean fleet, which, at less than 50,000 gross tons and a passenger capacity of 930 guests, are much smaller than most ocean cruise vessels.

Hagen says Viking's success stems from a number of factors, including a strong, consistent brand, a clearly defined customer base, a customer-centric product and "the best staff in the industry."

"We offer a focused product for the thinking person," Hagen said. "There are no children under 18, no casinos and no nickel-and-diming."

Hagen says Viking's river ships were the first to shut down during the pandemic - and the first to restart after devising a testing-focused approach that would allow the ships to operate safely. The company installed PCR test labs on each ship, and passengers and crew members were tested daily with oral swabs, to quickly identify and isolate positive cases.

"People felt more safe on our ships than at home," Hagen said, while acknowledging that at one point the company was spending as much on COVID testing as it was on fuel for its ships.

"We demonstrated that we can be nimble in times of adversity. During the shutdown we kept ships in warm layup and paid our staff partial amounts. We had no trouble getting crew back when we reopened. We have come out of this very strong," Hagen added.

A Fulbright Scholar and 1968 Harvard MBA graduate, Hagen also earned a Masters degree in physics in Norway in 1963. A fascinating fact is that his thesis focused on machine learning and artificial intelligence, decades before AI became an important global issue.

Hagen is interested in the technical details of Viking's ships as well as their product. He says there's a major focus on achieving sustainability, but he doesn't believe powering ships with liquid natural gas (LNG) is the answer.

"LNG is another word for methane, and it is increasingly accepted that this product is the worst option for global warming. Hydrogen is the only thing currently available that would solve the issue, and I would like to spend some time on that." A hydrogen fuel cell pilot project is currently underway on Viking's Neptune ocean ship.

Hagen acknowledges that achieving sustainability is a difficult task. But the man who grew up without riches on a Norwegian farm, became wealthy, lost it all and has now achieved success again, is not to be daunted.

"Nothing is impossible," he told the naming ceremony audience. "That's the Viking spirit."

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