Cruise Execs Reassure Agents on Discount Pricing

The damage to client confidence inflicted when last-minute cruise sales undercut prices paid by early-booking customers was top of mind for travel sellers attending this week’s CruiseOne and Cruises Inc. national conference.

Cruise executives addressed agent concerns about last-minute cruise discounts and shared tips on persuading clients to book early during a panel discussion at the conference aboard Royal Caribbean International’s Allure of the Seas.

“An an industry we went through some rough years, so pricing was challenging for all of us,” conceded Royal Caribbean executive Vicki Freed, adding, “I think we’ve all gotten a lot better at it.

“On behalf of Royal Caribbean, we truly are trying to have the very lowest price out, so that as we get closer to the sailing, the price is actually increasing not decreasing. We’re getting it right 90% to 95% of the time,” said Vicki Freed, senior vice president, sales and trade support services.

One-way exchange
Freed was joined on the panel by colleagues from Azamara Club Cruises, Carnival, Celebrity and  Norwegian Cruise Line. Among other agent concerns addressed by the executives was worry over the impact of cruise lines pulling ships out of U.S. homeports to reposition them in Europe.

The executives were responding to questions that agents had submitted ahead of time. Unlike previous years, no live questions from the audience were allowed, and there was no interaction between the panel and audience members, a reaction by conference organizers to a confrontational question from an agent during the panel at last year’s conference.

Here is a roundup of what the executives had to say.

Last-minute sales
“When you get groups together and get them on the books early, that really helps us keep the price integrity as we get closer in. We really do count on you to bring group travel to us so we can do exactly that.” – Camille Olivere, vice president, North American sales, Norwegian Cruise Line
 
“There are two types of consumers. There are the planners; those people want to know in advance, prepare for a vacation and not wait for last-minute sales. Then there are the sale shoppers; their life is always about seeking the lowest price. You need to use the last-minute sales to your advantage to get those customers that are looking for the deals and use the early booking lower rates – hopefully, most of the time – as a way to motivate people to plan early.” – Vicki Freed

Persuade clients to book early
“When you book your clients further out, the big advantages are: they can book their dining reservations in advance, and they can plan their shows and their scheduling and not be closed out of things that might have more demand, like a formal night. – Vicki Freed

“One benefit of booking early is being able to select your stateroom – having the best possible combination if you’re trying to get connecting rooms. Those things get more and more difficult as you get closer to sailing.” – Camille Olivere

Compete on more than price
“The people (agents) that have the least issue with competing with the Internet or the deals are people who have actually created something unique in their value proposition. They’re selling some kind of package entity that really can’t be shopped, whether they’re throwing in a shore excursion or having a cocktail reception or there’s an affinity around their travel.” – Camille Olivere

Matching clients and ships
“We did a lot of research last year, and the average travel agent asks three questions when selling a cruise. You really need to ask them seven or eight to make sure you’re putting them on the right brand for the right occasion, to make sure you’re qualifying the guests properly.” – Jeff Clarke, vice president, sales, Celebrity Cruises

“It really is qualifying and asking the right questions and perhaps putting your own agendas aside. On land, you wouldn’t take a Best Western client and put them in the Ritz Carlton. It’s no different in the cruise world. You’ve got to ask the right questions.” – Edie Bornstein, senior vice president, product and operations, Azamara Club Cruises

Working together
“It’s an empirical fact that, together, (agents and cruise lines) have grown the industry steadily for 22 years. That speaks to the power of our relationship together, that we are the most resilient group of people. The pricing might not be pretty; we might be doing a lot of things that we wouldn’t normally do. But through terrorism and recessions, as an industry, we can overcome anything.” – Joni Rein, vice president, worldwide sales, Carnival Cruise Lines

Making money in 2012
“We’re very excited about 2012. The booking window is starting to expand. Consumer demand is there, and we’re seeing rates go up. We’re also seeing some demand push over to Europe, so we’re bullish on Europe. We think there is a lot of money to be made next year.” – Jeff Clarke

“I’m a strong believer in the power of positive thinking. Depending on which state you’re living in, if it’s approximately 14% unemployment, that does means 86% are employed. At the end of the day, people are spending. So expand your prospect list. Have the power of positive thinking in your pocket, and go after those clients. Don’t sit around and wait. Go after the business because it’s there for the taking.” – Edie Bornstein

“Don’t be afraid of the recession. People are exhausted from waiting, go get them; they need a vacation.” – Joni Rein

Pulling out of year-round U.S. homeports
“If we got the support and the yields when we are there, then it would make sense for us to be there year-round. But until we can get the support, it is more profitable for us to move our ships during the summer season to Europe and get higher yields there.” – Vicki Freed

Selling overseas product
“I have spoken to agents who have expressed concern over limited air and the reduction in capacity. An agent in Seattle discovered that you could fly to Pisa (Italy) for much less money, and they built in a train package to Venice and were very successfully marketing that way. So I encourage you to get creative, whether it’s a departure point in the U.S. or arrival point over in Europe.” – Camille Olivere

“Get educated and knowledgeable about it, because North Americans are traveling overseas. They’re going to Dubai; they’re going to Europe; they’re going to Australia and New Zealand. You need to become knowledgeable.” – Vicki Freed

Challenges in 2012
“It’s those things we can’t control; we can’t control the air capacity going down. We have to find ways around it.” – Jeff Clarke
 
“The only fear that I have is fuel costs and the EPA (Environmental Protection Agency). Those are two things that we really need to start focusing on.”  – Joni Rein