Interest in Luxury High, Bookings Slower to Follow

While Crystal Cruises and Windstar Cruises are reporting record bookings over the past several weeks that show a renewed interest in luxury travel, travel agents tell Travel Market Report that the picture isn’t quite as cut and dry.

“We have not experienced a major uptick in luxury travel,” said Ken Schwinn, owner of Schwinn Tours & Travel Inc. in Florida.

Cabin Upgrades Common

Schwinn noted that many of his clients have begun to realize that last year’s deals are gone and that if they want to experience luxury travel at a better-than-usual price, they need to act now. But for Schwinn, this awareness has translated into clients who typically take mid-market cruises moving up to better stateroom categories or suites.

“I have not had clients in premium lines moving up to Oceania, Azamara, Regent, etc.,” he said.

Other agents told TMR that their clients still believe better deals will come along if they wait.

“I’m still finding that people are waiting to buy because they expect fares to go down,” said Nancy F. Yoffe, a South Carolina-based Cruise Planners agent.

Yoffe said that while business is up, it is not where it should be because South Carolina is still facing more than 10% unemployment. Yoffe has not seen her luxury sales pick up at all.

Nor has John Gawne, a Virginia-based Cruises Inc. agent, seen a rush of high-end business, though he has received many inquiries regarding European land tours, Egyptian river cruise/tours, Australia and New Zealand cruises, as well as cruise/tours to China and Asia.

“But the bulk of the ‘rush’ is still short-lead time bookings on the mass market and premium lines. People are still booking family groups for March,” he said.

Marge Suazo, a Colorado-based Cruise Planners agent told TMR she is seeing some interest from her luxury clientele but nothing really significant.  She said these inquiries are being driven by the “great offerings” the luxury lines are promoting and not pent-up demand.

Luxury Inquiries Grow

Ralph Santisteban, a Miami CruiseOne travel seller, is seeing similar results with a lot of growth within premium cruising, but not as much within the luxury market.

“We saw an increase on premium products sales in general as consumers are searching for upgraded products such as Celebrity Cruises and Holland America,” Santisteban said, adding that his January sales were 32% over 2009. Consumers also are returning to upgraded purchases of balconies and suites he said.

Within the luxury market, Santisteban told Travel Market Report, his agency has noted greater consumer interest, though consumers have not yet purchased luxury line sailings.

“But as they have been quoted, the possibility does indeed exist that these lines will show increased sales revenue in the next six weeks,” he added.

For Some Luxury Bookings Return

Sherry Laskin, owner of Florida-based Vacation Shoppe, said that in the past two weeks, three past luxury cruise clients have called to inquire about booking a luxury cruise for this year. But though interested in sailing on a luxury line, all three clients were shopping prices first.

“They wanted longer cruises (20+ days), more exotic, but were pricing the least expensive in the luxury brands,” she said.

For some agencies the renewed interest in luxury travel is translating into bookings.

“Since October we have seen an upturn in luxury bookings,” said Donna Johnson, president of Red Bird Travel Plus in Dallas.

Johnson said pent-up demand and the unusually cold, snowy winter have been major factors in the growth in bookings, most of which are to warm weather destinations, including cruises to South America for travel now and Mediterranean cruises in the fall.

“Our affluent bookings are way up and people are chomping at the bit to go,” said Stephanie Turner, president and CEO of Brentwood Travel Service. “The people calling seem to want the higher end of the spectrum.”

Like Johnson, many of the bookings Turner is seeing are for later this year.

Additionally, she told Travel Market Report she attributes the growth in bookings to a combination of pent-up demand and the great offers on the table.

“People are looking for good value and justifying their more upscale travel by saying what a good value they are getting.”

She added that though they’ve seen a slight uptick in Crystal bookings, their greatest increase has been with Regent, Oceania, the Paul Gauguin and Tauck. Her agents are also doing more custom high-end trips and booking a lot of river cruises.

Value-Adds Boost Bookings

Jackie Johnson, executive vice president of The Affluent Traveler Collection, also attributes the growth in luxury bookings among Affluent Traveler Collection member agencies to pent-up demand and the value-added offers from the cruise lines.

Johnson said she heard and saw evidence of the demand increase begin just prior to last year’s third quarter and added that 2009 bookings for 2010 cruise departures reflected a very healthy consumer demand.

“That being said, the affluent market isn’t quite as exposed to the vagaries of the economy as is the mass market, so 2009 proved to be either flat or slightly up for our member agents with an affluent clientele,” she added.

Amber Blecker of a Colorado CruiseOne told TMR also began to see an increase in luxury cruise bookings last year, going back as far as nine months ago.

“Since the second quarter of last year, my more affluent clients have been booking cruises at or above their previous frequency.”

Additionally, over the past year many of Blecker’s mid-level clients have moved up to luxury cruise lines in order to take advantage of the better pricing and value-added promotions.

“More of my clients are inquiring about luxury cruising and their realization of the value luxury lines offer is becoming more prevalent.”

“Crystal in particular has been strong for me, with a client just having booked next year’s world cruise. She is an unexpected repeater currently sailing the 2010 world sailing… next year’s cruise is actually a few days longer, but her fare is almost $10,000 less than this year. That is significant and is indicative of how the pricing realignments in the luxury industry are driving sales.”

Blecker added that she expects to see another surge in bookings when Crystal releases pricing for its other 2011 sailings.

Luxury Land Tours Grow Too

Agents are not only seeing growth among luxury cruise bookings.

“We have been very pleased with the participation in our FIT escorted tours,” said Linda K. Strait, vice president and director of operations at Missouri-based Great Southern Travel.

The tours, together by the agency’s group department, are extensive, lengthy programs with “unique inclusions” — and they are not inexpensive, Strait said.

However, she told TMR she’s not sure she would call the interest in the FITs growth, but instead “more of a return to the normal patterns before the economy began to crumble. People are beginning to exhale.”