The cruise industry underwent a shake-up in March, due to two
separate tragedies that claimed the lives of 13 cruise ship
passengers on the Celebrity Millennium and Star Princess. The
incidents took place a day apart and came at a time when the
industry was already under increased scrutiny from reconvened
congressional hearings on cruise ship safety and security.
The first tragedy took place on March 22, during a two-week
Celebrity Millennium South American cruise. While the vessel was
docked at Arica, Chile, a group of passengers embarked on a tour of
the Andes. Their minibus was returning to the ship when it swerved
off the highway and plunged down a 300-foot hillside. Officials
believe that the driver may have fallen asleep at the wheel. Twelve
passengers died; two survived with broken bones. The passengers
were not on an official Celebrity Cruises shore excursion, and the
company, Andinatours, was not properly licensed as a tour
The day after the Millennium bus accident, fire broke out on the
Star Princess while en route from Grand Cayman to Montego Bay. The
fire eventually damaged 100 staterooms, and a 72-year-old passenger
from Atlanta succumbed to a heart attack. Two other passengers
suffered serious smoke inhalation. The cause of the blaze is still
under investigation at press time, but initial reports blamed a
smoldering cigarette that was tossed overboard.
Princess terminated the cruise in Montego Bay, and flew all the
passengers home with a full refund, a future cruise credit and
reimbursement of out-of-pocket expenses. The Star Princess’
remaining Caribbean sailings (April 9, 16 and 23), as well as a
scheduled transatlantic sailing on April 30, have been cancelled,
and passengers will receive the same refunds. The vessel is
expected to resume service in time for its European season, which
begins with a cruise from Copenhagen on May 15.
The two cruise line disasters come at a time when the industry
was already receiving some unwanted attention. The disappearance
last summer of honeymooner George Smith from a Royal Caribbean
cruise in the Mediterranean has prompted a steady stream of media
reports and allegations of a cover-up. The Smith family’s
congressman, Rep. Christopher Shays (R-Conn.), convened hearings of
the U.S. House Subcommittee on National Security, Emerging Threats
and International Relations last December, examining the issues of
cruise ship safety, security and accountability. After requiring
cruise lines to submit statistics about onboard crimes and
disappearances, Shays reconvened the hearings earlier in March.
A group of individuals including the family of George Smith have
launched the International Cruise Victims organization and urged
congress to impose stricter accountability and special safety
measures on the industry.
The two recent tragedies will no doubt bring added pressure to
bear on the industry. Ana Figueroa
Flooding on Kauai
As Kauai recovers from the Kaloko dam disaster, government and
tourism officials have stepped up efforts to let travelers know the
island is open for business.
“Kauai’s airport, its harbor and businesses are open and ready
to accept our visitors in the same way they always have. Kauai’s
aloha spirit remains intact and the island is green and beautiful,”
said Kauai mayor Bryan Baptiste.
In addition, officials said that flights are operating normally,
and all accommodations and major roads are open.
Area resorts including the Princeville and Sheraton Kauai
resorts experienced some cancellations but nothing substantial,
One person was killed after the 40-foot-tall dam burst on
Kauai’s North Shore, launching a wall of water that damaged homes
and roadways, according to reports.
The closing of Kuhio Highway left hundreds of residents and
vacationers stranded, sending the island’s visitor industry into
chaos. Traffic has since resumed between Kauai’s North Shore and
the rest of the island, although officials said the highway will be
down to a single lane for months in the collapse zone.
Report Questions Cruise Commissions
The world’s two largest cruise lines have no intention of
following a recommendation by Goldman Sachs to reduce travel agent
commissions and increase direct sales, and the American Society of
Travel Agents released a statement defending agents’ roles in
Goldman Sachs analysts released a report earlier this month
suggesting that Carnival Corp. and Royal Caribbean Cruises Ltd. had
“overlooked” opportunities to cut expenses in the current
The chief recommendations were to redirect bookings to their own
Web sites, hedge fuel costs and cut commissions to travel
“Unlike other industries, the cruise sector does not appear to
be as aggressive in cutting non-fuel expenses, raising prices or
adding a surcharge to offset the rise in energy costs,” the report
said. “In many ways, the cruise lines seem to be passively waiting
for energy prices to abate.”
The report suggested that there would be “significant” cost
savings for RCCL and Carnival if they lowered average agent
commissions to at least 10 percent and redirected bookings to their
As for cutting commissions, the two cruise lines were firm.
“Travel agents play a very important role in our overall
success,” said Carnival spokeswoman Vicki Freed. “They earn that
Royal Caribbean agreed.
“Our travel agent partners are very important to us, and we are
not contemplating modifying our commission structure,” said Michael
Sheehan, a spokesman for Royal Caribbean Cruises.
ASTA responded to the report stating that travel agents add
value to a cruise sale, not expense. In a letter to cruise line
executives, ASTA president and CEO Kathy Sudeikis pointed to the
fallacies and shortcomings of the Goldman Sachs analysis, which
failed to take into account the true competitive situation that
cruise lines face.
“The recent statement by Goldman Sachs shows a complete lack of
understanding of the travel agency and cruise industries and travel
agents’ relationships with the consumer,” said Sudeikis. “The
report did not even attempt to analyze cruise lines’ competitive
position against land-based tours. Nor did it attempt to analyze
the impact of a shift that might occur should a drastic commission
Between 1980 and 2004, the cruise industry market grew by 8.2
percent annually; more than 88 percent of Royal Caribbean Cruises
and Carnival Corp’s berths are sold by travel agents.
New Ensemble Partners
Ensemble Travel Group recently announced the expansion of its
air consolidator and Ensemble On Location partners programs.
The newest preferred specialty and Ensemble On Location
suppliers include Premier Gateway, an air consolidator; Dubrovnik
Private Tours, a Croatian specialist; Exclusively New Zealand,
specializing in customized New Zealand itineraries; Arno Travel
& Tourism, which offers packages in Italy; and Culture Trips,
one of Germany’s leading luxury travel partners.
Signature Travel Network announced new enhancements to its hotel
and resorts program, including a collection of over 265 hotels and
resorts an increase of more than 100 properties since the launch of
the program a year ago.
Over the past few months Signature has added hotels and resorts,
including Rocco Forte Hotel de Russie, the St. Regis Shanghai,
Little Dix Bay, Park Hyatt Chicago and the Plaza-Athenee New
The Network expects to add new properties in the coming months.
All participating hotels offer Signature clients exclusive
added-value benefits, such as complimentary breakfast for two, spa
treatments, special rates, room upgrades, or resort/dining credits,
as well as late check-out and early check-in if available.
Spa Finder, the global spa resource, has partnered with
Virtuoso, the upscale network of more than 6,000 member luxury
travel consultants. The deal will promote Virtuoso’s services and
the company’s preferred spa properties on Spa Finder’s leading
media outlets, including SpaFinder.com and the Spa Finder Worldwide
By using the travel agent section of SpaFinder.com, Virtuoso’s
member consultants can access spa overviews as well as “best buys”
and discounts they can pass along to clients. Virtuoso agents will
also receive VIP status and special service from Spa Finder,
including industry news, updates on Virtuoso spas and insider tips
on spa trends, treatments and products.
ASTA’s IDE Wraps Up
The American Society of Travel Agents announced that 1,200
travel agents, suppliers, tour operators and other travel
professionals were in attendance for the first International
Destination Expo (IDE) in Prague, which concluded March 25.
The 2006 IDE attendees represented over 40 countries around the
world and was designed to immerse conference attendees in the
culture, attractions and travel business of the Czech Republic and
A new type of seminar was also offered to allow agents to earn
specialist certificates on up to 13 Central and Eastern European
With a July 12 opening, San Francisco’s Orchard Garden Hotel
will be California’s first hotel built to the nationally accepted
standards for green buildings developed by the U.S. Green Building
The hotel’s green practices include chemical-free cleaning
products, a tobacco-free environment, recycled paper and soy-based
inks and the San Francisco debut of a guestroom key-card
The 86-room boutique hotel set one block from Union Square will
offer the “Love Your Mother (Earth)” opening package complete with
deluxe accommodations at $149 per night. Suites are available at
$249 a night.
The package will be offered from opening day through Sept. 30,
based on availability.