Cruise Lines Counting on Caribbean to Drive Growth
by Andrew Sheivachman /While cruise lines have reduced Europe deployments due to decreased demand, increased supply in the Caribbean could be a boon for North American travel agents, cruise executives said on Monday.
“We have to get the story out there that the Caribbean is an exciting place to cruise,” said Andy Stuart, executive vice president of global sales and passenger services for Norwegian Cruise Line. “There is a lot of new capacity, so it is going to be a competitive market.”
Stuart spoke on a panel of cruise executives during the CruiseOne and Cruises Inc. national convention, onboard the Norwegian Breakaway.
Attracting rookies
In a discussion of the challenges and opportunities facing cruise sellers, the executives said cruise rookies can drive increased sales in 2014, especially for home-based agents. The additional Caribbean supply will be an asset in this regard, they said.
“The Caribbean gives agents a huge opportunity to get new people introduced to cruising, which has been the biggest challenge in our industry,” said Vicki Freed, senior vice president of sales, trade support and service for Royal Caribbean International.
“Only 24% of the U.S. population has ever taken a cruise, so this is our opportunity to introduce people to cruising in a more cost-effective way, in terms of transportation,” she said.
Re-focusing on product
While high-profile cruise safety issues have forced the industry into damage control mode this year, the cruise lines are eager to put the focus back on their product.
“It’s very important that we sell the onboard experience,” said Joni Rein, vice president of worldwide sales for Carnival Cruise Lines.
This is especially critical in the all-important market of first-time cruisers, which has suffered. “First-time cruisers are going to be valuable for us, and this year has been very bad in terms of the cruise rookies,” Rein acknowledged.
Lessons for Carnival
For Carnival, it’s been a tough year in terms of travel agency relations too. Rein said Carnival’s leadership has been humbled by travel agents’ response to its Carnival Conversations roadshow.
“It has been a year of amazing lessons learned. I think [agents] were heroic as we stabilized the patient,” said Rein, referring to recovery efforts following a string of negative events that started with an engine fire that left the Carnival Triumph adrift at sea in February.
Short cruises
Some cruise lines are looking to past successes for inspiration. Among them is Princess Cruises, which has re-introduced its three- to five-day “Getaway” sailings in hopes of drawing new clientele while allowing loyal customers to sample new vessels and itineraries.
“We’re very excited to bring back the Getaway cruise, which was designed originally to entice first-time cruisers,” said Brian O’Connor, vice president of North American sales for Princess.
Agents shouldn’t overlook the Getaway cruises, O’Connor said. “Often those shorter cruises will get discarded by the trade because of lower fares, but we did some research and found it is a good opportunity [for agents].”
Pricing concerns remain
Pricing continues to challenge the cruise industry, and executives acknowledged that they need to do more to curtail promotions and re-pricing.
“We are going to be in a promotional environment for a while, but I think as an industry we can move away from that together,” Stuart told travel agents.
He urged agents to do their part. “We need to focus on getting groups on early, so a little bit of this is in [the control of agents]. Help us get that early business going and that will slow down some of the promotions.”
A stagnant U.S. economy has made it risky for mid-market lines to increase their prices. “Unfortunately our economy has played a part in it,” said Freed. However, she added, “we are seeing [prices] bounce back.
“We want to be able to increase rates on the last remaining staterooms,” she said.
Be bold
Executives implored agents to be bold in selling cruises.
“If someone comes in looking for a 10-day cruise, offer them a 20-day cruise, or you’re leaving money on the table,” said Charles Dunwoody, senior director of national accounts for Holland America Line.
Alaska cruises are a good product to suggest to cruise rookies. “When it comes to first-time cruisers, our No. 1 destination is Alaska,” said Dunwoody, adding, “We’re very bullish on our mid-size ships.”
Be positive
With the public still sensitive to safety concerns on cruise vessels, agents must be positive ambassadors for the industry, said Dondra Ritzenthaler, senior vice president of sales at Celebrity Cruises. “If agents go out there and say, ‘Woe is me,’ it breeds negativity.”
Instead, agents should seize the opportunities that come with rough waters, she suggested. “When things go a little crazy for the industry, consumers go to agents even more. That is a beautiful thing.”