Agents Need New Strategies as Cruise Commissions Erode
by Maria Lenhart /Whether it’s as complex as honing the special interest group cruise market or as basic as selling more travel insurance, agents need new strategies to offset the continuing erosion of cruise commissions.
Doing so will more than make up for declining revenue in other areas, according to Dwain Wall, senior vice president and general manager of the CruiseOne travel agency franchise group.
Travel Market Report sat down with Wall during the recent ASTA Expo in Los Angeles to get his take on cruise industry trends impacting travel sellers.
A major complaint from agents these days is that commission revenue from cruises is declining. How can they make up for this?
Wall: We urge agents to sell travel insurance, to sell [third party] shore excursions. And do everything you can with the pre- and post-cruise portion of the cruise, including hotels and other land arrangements. At CruiseOne we have an air program that is helping agents make up for that loss on the commission.
Agents should also be looking at selling cruise alternatives, such as the all-inclusive resorts in the Caribbean and Mexico, which are nice options for vacationers. They are 100% commissionable, quite lucrative and an easy sell. Not surprisingly, agents are embracing the all-inclusive concept.
We keep hearing about the tremendous growth in river cruising. What are you seeing in this area?
Wall: We saw river cruises start to grow in 2009. They are a great product for agents to sell – a premium product where agents typically earn higher commissions than on ocean cruises. There’s been a great response to river cruisers from consumers, with more Americans graduating to this concept.
Are clients who do ocean cruises the most likely market for river cruises?
Wall: We did a comparison on this showing that not as many people are going from ocean cruises to river cruises as you might think. It’s really land vacation people – those who really want to experience a destination – who are embracing them.
What other areas in the cruise market are performing especially well right now?
Wall: Europe has been really strong this year. The cruise sales departments have done a good job of putting together packages for U.S. customers. People who cruised in the Mediterranean got great deals this year. We don’t see demand for Europe going away. Demand is there for the long-term.
Should agents be developing the group market for cruises?
Wall: The most successful agents are zeroing in on the group market. One of our most successful franchisees does an [annual] cruise for Harley-Davidson enthusiasts. They developed a market for the cruises by going to motorcycle rallies and got Harley Davidson to sanction them.
Multigenerational travel, destination weddings, family reunions – these are all cruise areas that are growing and where agents are needed because of the complexity. Some of our agents are getting as many as 70 customers for a family reunion, although 15 or 20 is more typical. The all-inclusive nature of a cruise makes a ship a perfect fit for this type of travel.
What other tips do you have for agents who want to keep their cruise revenue strong?
Wall: One area of business that can get lost is cruises booked on the ship. Many cruise lines encourage passengers to book a future cruise while they are on a current cruise. When they make a deposit on board, the travel agent is referenced. When this happens, it is very important for the travel agent to follow up immediately.
As a general practice, we tell agents to talk to their customers. Don’t just communicate by email. We also emphasize the importance of sending your customers a handwritten, personal note. By doing a little bit more, you make the customer feel great.
Do you see a continuing trend for the cruise lines to offer special deals and value-adds to consumers?
Wall: Premium deals from the cruise lines are here to stay. Customers are used to them. Everyone expects to get a deal. There is nothing to be done about it.
Cruise lines have had a lot of stateroom inventory to fill in recent years. Do you see this continuing for a long while?
Wall: New-build ship inventory is slowing down a little, but it continues to grow, with new ships from Norwegian, Royal Caribbean, Celebrity, Princess and others. There are a lot of orders on the books for two or three years down the road. The lines have to keep up to date with their ships.
Are there new cruise trends that are beneficial to agents?
Wall: The increased complexity of what the cruise lines are offering is a benefit to the agent. For example, the categories of staterooms are expanding – there can be 50 or 60 categories to choose from. This makes it harder for consumers to figure things out on their own. So it creates demand for the agent.