Selling To the New Luxury Client

Cruise executives explain the changing market and what works in presenting the products By: Marilyn Green
Luxury cruises are attracting a broader clientele. //(C) 2010 Cunard Cruise Line
Luxury cruises are attracting a broader clientele. //(C) 2010 Cunard Cruise Line

Luxury evokes an image of white-glove service, caviar with a slice of lemon and elegant surroundings — the traditional glamour of privileged travel.

But the image of luxury at sea has been refined several times during the past two decades as cruising has opened its doors to a larger segment of the population. The hallmarks of luxury cruising haven’t changed entirely: outstanding service, very individualized attention, exceptional cuisine, large and beautifully appointed staterooms, an all-inclusive product and ports chosen for the well-traveled passenger. But selling luxury has really been altered in many respects. The product is expanding and broadening its scope with a more targeted product, clear identities for each brand and a wider range of ship sizes and characteristics. And the recent strain on the economy has left its mark on how luxury is sold.

Cruise executives in the luxury sector are very much in agreement about major trends in sales, seeing more time-constrained customers who are driving the demand for shorter itineraries. Most companies are designing cruises without repeat ports so that itineraries can be combined for longer cruises.

Another important development is the intense emphasis on value for the luxury customer, along with even more concentration on exclusive, authentic experiences than in the past. Peter Shanks, president and managing director of Cunard Line, said “value” is a watchword for luxury customers today.

“Despite the tough times over the last 18 months in line with all travel and, indeed, the luxury businesses, Cunard has seen a good level of resilience and has continued to sail full,” Shanks said. “We have, though, worked harder on the messaging of value and that has worked well for us. In the U.S. in particular, there were reports of consumers holding back in the luxury goods market with a sense of not wanting to be seen to be spending money.”

Bill Smith, senior vice president of marketing and sales at Crystal Cruises, agreed, saying, “Luxury clients need justification and validation that an experience is okay to do, and it had better be worth it. It must be personal and guests must be made to feel special — the more exclusive the better. They know luxury, they have been there and done everything — they want it now and they want it the way they want it.”

Terri Haas, chief commercial officer of Compagnie du Ponant, which recently entered the North American FIT market, finds that the luxury client around the world is seeking the same things.

“The new luxury traveler is not like the previous one; expectations have really changed,” Haas said. “They are still spending, but are very focused on value and on more exclusive, authentic experience.”

Haas sees the new breed of luxury cruisers among the younger boomers and luxury spenders coming in before they retire at ages 45-65. She said that, in response to this market, 80 percent of Ponant’s itineraries are seven nights in length, most with back-to-back capability.

“We’re dealing with a new growing segment of affluent travelers with less time,” said Doug Seagle vice president, The Yachts of Seabourn, “so we’ve created more seven-day itineraries. Past guests are more inclined to take longer cruises.”

In dealing with the younger luxury cruisers, agents should respond to a greater interest in social networking sites and blogs, according to Chris Bensley, senior vice president of marketing for Paul Gauguin Cruises. He also sees more demand for evidence of a social and environmental conscience among the cruise lines and for opportunities to allow guests to give back to the regions to which they sail, an element several luxury lines are incorporating into their shore excursions.

Jeff Drew, senior vice president of sales for Oceania Cruises, finds an even stronger emphasis on food and wine from the expanding luxury market. He said Oceania is moving into experiences such as Scotch and sake tastings along with its central focus on exceptional cuisine.

The younger demographic coming into the luxury sector represents a real growth opportunity and may require a change in viewpoint for agents.

Brad Ball, Silversea Cruises director of media relations, said that potential clients include many empty nesters who have never cruised.

“Agents should put away their preconceptions when looking for new luxury cruise clients,” he added. “It’s not so much about age — look for professionals, world explorers and business leaders.”

Cost Breakdown
Cruise executives also emphasized the vital importance of explaining in detail what luxury cruising includes in order to accurately present its value.

Mark Conroy, president of Regent Seven Seas Cruises, said, “Agents should be clear with their clients — if you add up everything we include, the cost of a cruise may be just marginally higher than a comparable premium one; it may even be lower. And, in order to give agents a comparable commission, a premium line would have to offer something like a 28 percent commission. Agents must have the courage to tell their clients what their vacations would really cost.”

Conroy credited Regent’s success in 2010 to the move to an all-inclusive product, which he calls “probably the best year in our company’s history.”

Including shore excursions in the cruise fare also had a strong impact on guest satisfaction with ports.

“Whereas about 200 of 700 passengers would go on our tours before, now it’s 600-plus,” he said, “and now they see much more why we go into the ports we do. The larger ships can’t duplicate what we offer, because you can’t offer free shore excursions for two or three thousand people.”

Consistent Discounting
Ball finds that discounting has definitely stimulated sales; like other lines, Silversea is consistently offering higher discounts further out so agents can count on prices rising closer to the sail date.

“At 10 months out, we may offer free airfare and 60 percent off, and the agents can confidently tell their clients to commit early,” he added. “They should be aware that some clients will book a set of cruises while the rates are so good.”

Conroy agreed.

“Regent is offering very aggressive rates early and raising them each quarter,” he said. “Agents can look their customers in the eye and tell them they need to book early to get the best prices.”

The luxury client is the most likely of all segments to go to an agent.

Brian Clement, vice president of sales for Windstar Cruises, echoed the sentiments of other luxury line executives, when he said, “Relationships with our travel partners are still key to this business.”

But, while the luxury lines are strongly supportive of agents, they are very specific about what the retailer needs to do.

Smith cautioned agents that selling and effectively communicating has never been more important.

“The customer is looking for a relationship; the sale begins when the phone rings or the client walks through your door, and it doesn’t end with a booking. They will back out; they will be scared away if not convinced, they will continue to look and question.”

Conroy, also emphasized the importance of a continuous relationship. 

“Once you have the deposit, don’t assume the client will travel,” he said. “We have triggered e-mails that agents can send out; they can talk to their cents clients about shore excursion choices. Anything that engages the client gives you a higher rate of likelihood for a completed sale. Agents can’t take sales for granted.”

Brand Distinction
Each luxury line has a much stronger brand identity than in the past, so agents can qualify clients even within the sector.

“Silversea has an international mix onboard — 60 percent American, 40 percent international — so let clients know they can meet and mingle with the world onboard,” Ball said.

Haas underlined Ponant’s distinction: “The French are known for quality, food and service, and our ships are relaxed, not stuffy. Our captains can make an unscheduled call or linger for the benefit of passengers who request it.”

“Selling Crystal is easy if you understand the value of ‘All inclusive as You Wish,’ free air and two-for-one pricing,” said Smith.

Windstar stresses its romantic luxury ships under sail and group sales for its smaller ships. Azamara’s Pimentel stresses the line’s inclusive elements, from shuttle bus service to self-service laundry. Likewise, Gauguin’s Bensley pointed out that Gauguin includes almost everything and urged agents to inform their clients that Tahiti is about an eight-hour flight from Los Angeles, similar to ports of embarkation in Northern Europe for East Coast residents.

Drew pointed out that Oceania is lesser known than some other lines, making it an advantage for the agent, who can make a recommendation for a quality product of which the client may not be aware.

Everyone agreed that the luxury customer is returning.

“Luxury is doing better — agents are excited,” said Conroy. “Our customers are more affected by the market than unemployment, and things are definitely coming back.”

Shanks agreed.

“I sense that confidence is returning in the luxury market,” Shanks said. “Discerning customers who demand top levels of luxury are not interested in trading down. They continue to value a luxury experience.”

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