MSC Cruises Brings Inclusive Fare Structure to N. Amer.
by Andrew Sheivachman /MSC Cruises will adopt an inclusive fare structure in North America starting Sept. 23, allowing cruisers to choose from four different “experience categories.”
Cruisers will be offered four fare levels – Bella, Fantastica, Aurea, and MSC Yacht Club – with each level offering different amenities and stateroom types. Some categories feature a la carte amenities, while others feature a slew of inclusions ranging up to an all-inclusive “VIP club level experience.”
MSC will pay full commission on the inclusive fares and will continue to pay 5% on a la carte amenities. The new fares will be available for cruises departing Oct. 18, 2014, and later.
Details are available on MSC’s travel agent portal.
The decision
MSC made the decision to introduce the fare structure to North America earlier this year, after the idea was well-received by the company’s travel agent advisory board at an April meeting.
“This is something MSC launched globally almost a year ago, and every market has been doing well with it,” Ken Muskat, executive vice president of sales, PR and guest Services at MSC Cruises USA, told Travel Market Report. “We wanted to make sure we were getting everything going with MSC Divina in North America before launching [the fare structure] here.”
Pricing power
Muskat said MSC hopes the pricing change will make life easier for agents, while helping the line gain pricing power in a market where prices have been depressed.
“This gives agents another reason to think about selling MSC – to earn more commission,” said Muskat. “Pricing also is not where anybody wants it to be, and we are trying to get pricing up to a level that represents the premium product we offer.”
“Ultimately, I think this will go over well because it is easy to explain and to narrow down customers to one of four categories,” said Muskat. “We’ve got something for everyone, depending on the customer.”
Good for agents
One member of MSC’s advisory board said she thinks the new fare structure will help differentiate MSC in North America and raise the earning power of agents.
MSC’s inclusive pricing will “help grow agent profitability,” said Vicky Garcia, chief operating officer and co-owner of Cruise Planners, an American Express Travel Representative. “MSC’s simplified categories will offer agents the opportunity to earn more commission by up-selling pre-paid services.”
Industry trend?
Other cruise lines have been experimenting with inclusive pricing structures, Garcia noted.
“Recently, cruise lines have shifted their model from discounting to adding value to sell cabins,” said Garcia. She cited Celebrity Cruises’ 1-2-3 GO promo, Royal Caribbean International’s Buy-One-Get-One-Half-Off promo and Norwegian Cruise Line’s “All In” package as examples.
That’s good news for agents, since it means they earn higher commissions, she said.
But one agent said he didn’t see much demand for recent inclusive promotional offers.
“Our office did not see the needle move toward Norwegian after its [inclusive package deal announcement] last month,” said Chuck Flagg, owner of The Flagg Agency, a Travel Leaders member, in Canton, Ga. “We have seen the opposite for the river cruise market, however. The jury is still out on the mass market lines.”