Navigating the Seas of Relationship

Cruise line executives discuss successful interplay among suppliers, agents and clients By: Marilyn Green

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Cruise lines reported a rebound last year, often between 25 to 30 percent, after the dramatic drop in sales and revenues between 2008 and 2009. In 2011, the companies are raising prices and are also seeing bookings made far in advance. Panelists generally felt that the cruise business follows the market, most precisely in the case of premium lines. At the recent ExecConnect event, panelists discussed trends, in addition to ways that agents can capitalize on the market with smart strategies and existing tools.

Cruise panelists included Bruce Setloff, global director of charter and incentive sales for Azamara Club Cruises; Scott Clifton, director of sales for Celebrity Cruises; Paul Allen, vice president of sales for Holland America Line; Dave Socha, regional sales director for Oceania Cruises; Camille Olivere, vice president of sales for Norwegian Cruise Line; and Douglas Grau, regional director of sales for Royal Caribbean International.

Cruise bookings are moving further out, although there is a trend to last-minute vacation decisions. The two extremes represent a pattern that varies by region. Panelists see a very strong Alaska season, as they believe capacity has been right-sized, in addition to heavy interest in South America. The European market, which has attracted tremendous interest, has been somewhat tempered by the conflict in Libya. Also, air pricing is challenging the almost unanimous move to add capacity in Europe. Croatia in particular was cited as a very hot destination that needs little marketing.

Hawaii is showing good results, despite a temporary softness after the tsunami. In fact, the market is so strong that NCL has considered bringing another ship back to Hawaii. The last four years of increased profitability for the company have resulted in its ability to invest much more in service and in agent programs. All the cruise lines reported improved pricing and results, with Azamara showing an unusual pattern because of its rebranding and much more robust pricing; the line had lower occupancy, but higher revenues in 2010.

On the issue of agented versus direct sales, the cruise lines collectively stressed the importance of the trade. Smaller lines like Oceania and Azamara emphasized their dependence on agents and their ability to interpret and present the differentiating characteristics of the product; larger lines pointed to capacity increase. Olivere noted that, although NCL does 27 percent direct business, the company expanded 25 percent last year and will be growing even more substantially during the next two years. Grau also stressed RCI’s growth through Allure and Oasis, with 550,000 additional beds to sell annually. Celebrity, which has 90 percent agented sales, depends on agents because of less brand awareness than the giants, and HAL also said it depended on the agent. Allen pointed out that much of its direct sales are for low-end product — short cruises, for example — that does not interest agents.

Most of the cruise lines said they have recently made changes to their loyalty programs and urged agents to stay familiar with benefits, from stateroom upgrades to free Internet time.

Socha cited an Oceania Cruise night at a museum as a good promotional tool, linking clients to the company’s huge art collection onboard. Allen suggested that agents take the idea one step further and make such an experience part of an agent’s value package, by holding lectures in such venues for clients booked to a destination, utilizing webinars if clients are geographically scattered.

Agent Tools

* The cruise lines have invested heavily in educational programs and suggested that agents pick specialties and become experts in them. 

* Panelists strongly urged agents to use personal email marketing and not to underestimate the power of video. Some cruise lines are offering videos of more than 100 ports, and these can be transmitted to the client. 

* Oceania has a proprietary online booking tool that allows a booking to be made in 90 seconds. 

* Means of getting information right to the customer while he or she is on the phone, such as eQuotes, were among the tools the cruise executives felt were underutilized.

Expanding Agent Income

* Clifton advised agents that 10 to 30 percent of guests will take back-to-back cruises, if offered. “If you aren’t asking the client if they’d like to buy two cruises, you’re really missing some income,” he said.  

* Executives noted that agents should be grateful for onboard sales, noting that clients get a price break and sales are credited directly to the agent unless the client specifically requests otherwise.  

* Panelists discussed means of engaging the client to reduce the attrition in completing bookings. They suggested sending information about ports of call, working with clients to book special tours, spa treatments and more.  

* Some of the cruise lines offer inclusive rates so agents can collect commissions on more aspects of the cruise. These range from spa packages and shore excursion packages on Oceania to the entirety of Celebrity’s Galapagos product — air and hotel within Ecuador, dozens of shore excursions, etc. 

* The first-time cruiser can be lured onboard by branded entertainment from Blue Man Group to Bon Apetit.

Action Steps

* Clifton stated that 2011 is the single biggest milestone year in history: more than 10,000 Americans hit 65 each day, and when they are sold on celebration they usually bring others with them. 

* Group sales in general are a very good way to increase income. 

* Sell insurance, pre- and post-cruise stays and commissioned packages for spas and shore excursions. 

* Talk to the list of customers at least once a month.  

* Be sure to ask clients for referrals. 

* Experience the product at seminars at sea and fams. Don’t underestimate the power of relationship and to talk to panelists in the future.

* Agents should market themselves and their expertise more with social networking; the traditional album showing the agent in a destination year after year can be shifted to Facebook, giving the person distinctive credentials. 

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