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Starting this year, the luxury cruise market is poised for a growth spurt that it has not seen since the turn of the century. Unfortunately, the boom comes during an economic bust. To succeed, lines and agents will have to become more creative than ever to fill these new berths.
"This is a time when boning up on your skill set is most important," said Tom Baker, president and partner of Houston-based Cruise Center. "It takes many years of training and building a culture in an agency to develop the skill set to market and sell to those luxury travelers."
A rendering of a Veranda Suite aboard the new Seabourn Odyssey
From 2004 until now, there has been almost zero growth in luxury cruise beds. At the same time, there was unprecedented demand for those beds. This led to a slew of luxury ship orders that will debut between this year and 2012.
In May, a new small-ship luxury line will launch with the 210-passenger Pearl Mist entering service for Pearl Seas Cruises, a luxury offshoot of American Cruise Lines.
In June, the Seabourn Odyssey will debut. It is the first of three, 450-passenger ships The Yachts of Seabourn has on order between now and 2010 that will more than triple its fleet.
Silversea Cruises will follow with a December debut of the 540-passenger Silver Spirit.
Value Add-Ons or Discounts?With more product coming out and a slowdown in demand, it has been tempting for some cruise lines to discount. Many travel sellers that specialize in selling luxury cruises say this can deter the luxury client and that they would rather see cruise lines add value than drop prices.
"The luxury lines need to keep pricing somewhat firm. By lowering prices too low, they lose the clientele they have worked hard to ascertain," Baker said.
"Lines like Regent Seven Seas Cruises (RSSC), who offer incentives like free airfare and unlimited shore excursions, create compelling reasons to travel with them, without really destroying price ... Value adding the vacation is the best way to attract guests during this time," Baker added.
Many agents point to free air and cabin upgrades and inventive programs like high-value add-ons. Crystal Cruises now offers complimentary airfare and cabin upgrades on many sailings, and Regent’s new "ultra-inclusive" pricing program includes a selection of free shore excursions in every port.
"One thing we have learned about RSSC customers over the years is that they hate to be nickeled and dimed to death," said Mark Conroy, president of RSSC. "We have, therefore, made the conscious decision to make our product more and more inclusive, first with gratuities and wine with dinner, then with all the liquor and now, for 2010, with shore excursions and government taxes. You pay one price up front and that is pretty much it. Our guests love that concept."
Bonnie Childs, a cruise consultant with Seattle-based Cruise Specialists, said that value-adds for agents do help spur sales.
"I like incentives," she said. "RSSC and Silversea [in the past] have offered gift cards to the agents to help promote certain sailings that need attention. I always think of the luxury lines first, but this is a good reminder, and I love a challenge."
Let’s Make a DealLike it or not, there are deals in the luxury sector that the industry has not seen since the aftermath of Sept. 11.
"We have truly great savings and fares that no one has seen from Seabourn ever," Seabourn spokesman Bruce Good said. "People can probably sail on a Seabourn voyage now for what they paid for a suite on a deluxe ship a year ago.
"In the Seabourn tradition of ‘zigging when they zag,’ we are actually helping agents encourage consumers to book right now with a deal they can’t refuse," Good said. "This is partly a function of our fares being so all-inclusive. What do they need that they don’t already get? Also we believe that, psychologically, the most likely stimulus to get attention [and response] right now is a very simple, attractive offer. So far, our agency partners are agreeing with us."
Seabourn is offering up to $1,500 off per suite in addition to its Early Booking Savings of up to 50 percent on Europe itineraries. Also, the line’s Between Friends promotion is a modified referral program that offers $1,500 per couple for private shore excursion arrangements to groups of three or more couples sailing together (if one couple is new to Seabourn).
"The theory is that a small group like that may be in the mood to share special experiences together in times like these, and we can extend that to what they do onshore as well," Good said. "That would be $4,500 for the three couples. They can use them together or separately for private cars and special arrangements, like a picnic lunch in a historic site."
Oceania Cruises recently offered a $1,000 per person discount on certain European cruises. Silversea is giving $1,000 per suite in onboard spending credits on select voyages in Alaska, Northern Europe and the Mediterranean this summer.
"There is no question we prefer value add-ons, such as our current Free Air and $1,000 Onboard Credit Program which is combinable with Silver Savings of up to 50 percent," said Steve Tucker, Silversea’s vice president of national accounts. "The reason for this is two-fold: First, the travel agency community is still making a commission on a higher ticket price and, secondly, we maintain some integrity with our guests in regards to the price paid to travel on Silversea."
Crystal prefers the term savings to discounting, said Bill Smith, Crystal senior vice president of sales and marketing.
"If the market is looking for a price correction, we provide savings to the guest, but we also include value add-ons, which may be special air offers, free air and onboard credits," Smith said. "We prefer to provide programs that give guests the opportunity to select the programs that offer what they deem as value, but Crystal’s recognition for 15 years as the world’s best is the ultimate message of value."
Getting OnboardBoth Childs and Baker said that this is not only a time for the cruise lines to add value and incentives, but for agents to experience the products as well.
"It is very important to experience the ships," Childs said. "Every time I sail on one, I increase my business on that line. My last cruise is nearly always my favorite."
Linda Barber, owner of TravelWizard.com, agreed.
"How can agents selling luxury cruises — giving clients the dream — without having experienced it for themselves?" Barber said. "Of course, an agent can tell a client that they will have a cold towel on a hot day but it is not the same as speaking from experience. Agents must be experienced in order to be very successful in selling a product."
Barber recommended that luxury cruise lines invest in this by putting agents on their ships as much as possible and by offering agents more educational training programs about their products.
Walking the Talk Baker added that, beyond experiencing the cruise ships, luxury cruise agents need to understand and experience the overall upscale lifestyle their clients lead.
"One must learn to understand the conveyance of selling a luxury product by living in that lifestyle to some extent," Baker said. "It’s not possible for most travel agents to understand selling luxury products since, in many cases, they do not necessarily lead the same lifestyle."
Barber added that, with luxury clients, communication is the most important tool there is.
"Ask your clients what time of day they prefer to be called, which number is best for you to reach them at and whether they prefer to work with e-mail," Barber said. "Get up early, stay up late, stay in contact."
Barber also recommended being honest and authoritative.
"You have to be able to tell clients firsthand what experiences they can expect," she said. "You have to be able to say that in the spa they have proper massage tables and that they use a certain spa line of products."
"Education is the key," Barber added. "Clients can spot a fake in two seconds, and if you are faking it, you will lose your client."
Barber also recommended going the extra mile — these are clients that expect it.
"Be available for your client 24/7. Give them your personal mobile number. Answer them right back even if it is to say you will call them at a later time," she suggested.
And with luxury clients, offer them all of the upscale amenities they are used to getting — private jet services, a luggage concierge to the airport, private car services to and from all points and private tours in ports.
"Go all out for them and you will have a client for life," Barber said. "Ask them for their favorite beverage and have it waiting for them when they arrive. There is no limit to what you can do for your clients."
To be more productive in a down economy, Silversea’s Steve Tucker, vice president of national accounts, recommended that cruise sellers: (1) Be more in touch with their customers than ever before and (2) Reach out to them with special offers by increasing their marketing spend in direct consumer contact (as opposed to any marketing done for branding purposes) such as e-mail and direct mail.
"Also, bear in mind that consumers are buying much closer in," Tucker said, "so your marketing efforts should reflect this trend."
No matter how good a salesperson is, or how good the cruise deals are, this is tough environment, and even the best luxury cruise sellers are feeling it.
"Business is very challenging and down in the new economy," Baker said. "There is a trend for business to be purchased closer in and at lower price points thus, lowering agency revenues. The cancellation factor also seems to be higher than post-Sept. 11. It is going to take a brave and disciplined agency owner to make tough decisions to preserve business during this time."
On the bright side, Childs said that, while some people are delaying their vacation decision, they decide to go in the end.
"Our business is strong," Childs said. "Sometimes, people hesitate for a little while and maybe they will take a shorter cruise, but then they realize they that they really want to travel, and they find the funds."
1. Seek out value-added promotions and add-ons
2. Look for deals that pique your clients’ interests
3. Experience a luxury cruise for yourself so you can relate directly to your clients
4. Personalize your services to your client
5. Make contact and keep in touch
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