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cruise3sixty Shows Industry's MettleApril 7, 2009 By: Susan Young
When the cruise line executives walked to their seats on stage for the first General Session of CLIA’S cruise3sixty conference in Fort Lauderdale on April 3, they were eager to focus on how important it is in today’s marketplace for agents to be aggressive and enthusiastic on the sales side. After all, the program was aptly entitled, “Maintain Course and Full Steam Ahead – When the Going Gets Tough, the Tough Keep Selling.”
But the executives quickly discovered a tremendously enthusiastic trade audience with a decidedly more bullish attitude about marketplace conditions, cruise selling opportunities and their future success than anyone might have thought possible. Overall, “positivity and hope were the common themes and mood of the conference,” emphasized Jeffrey Anderson, vice president of marketing, America’s Vacation Center.
Moderating the executive discussion was travel expert Dr. Lalia Rach, divisional dean at the Tisch Center for Hospitality, Tourism and Sports Management, New York University. She bluntly told agents that consumers have learned two big lessons in weathering economic woes over the past few months. First, they have learned to “trust no one” including businesses. Second, she said consumers now know the difference between “wants” and “needs.”
Using electronic voting equipment, she asked the agent audience, “What is your greatest concern for the future?" The audience selected from these choices: (1) People will take fewer leisure trips. (2) Technology will make what I do less valuable. (3) Supplier-agent relationships will become less important. (4) To earn a living as a travel agent will become more difficult. (5) There will always be challenges but I remain optimistic.
The overwhelming majority – nearly 89 percent – voted “there will always be challenges but I remain optimistic.”
Addressing this go-getter agent group were Gerry Cahill, president and CEO of Carnival Cruise Lines; Adam Goldstein, president and CEO of Royal Caribbean International; Carol Marlow, president and managing director of Cunard Line; Rick Sasso, president of MSC Cruises USA; and Kevin Sheehan, CEO of Norwegian Cruise Line.
The core message delivered by executives was that agents should show their passion for the cruise vacation product, keep promoting and look for sales opportunities in new places and in new ways.
Sasso said agents might seek out clients who may have had a budget of $10,000 to go to Europe on a land vacation this year, but don’t want to spend that. Perhaps they’d consider a cruise to Europe for $5,000?
Another creative option is to upsell to a higher cabin category, given the pricing changes of most lines. As with many lines, Carnival has re-categorized its ships – changed pricing levels and gaps between categories. “Even during the past six months when the economy has been as ugly as I can remember in my lifetime, we’ve seen a 50 percent increase in the sale of higher cabin categories versus the same time last year,” stressed Cahill. “So that’s another opportunity for you to do better and for us to do better too.”
What’s the cruise industry’s greatest strength? Agents were asked to choose between the following: product innovation; extraordinary value; value of the destinations/itineraries; level of customer service; and diversity of products from contemporary to luxury.
Not surpringly, “extraordinary value” was cited by more than 74 percent of the attendees. The variety of destinations and itineraries came in second with nearly 21 percent. But Sasso stressed that the cruise industry’s greatest strength is really a combination of all those attributes. “It’s the 360 of [the industry’s] brand development,” said Sasso.
Rach said she’s talked for a decade about the cruise industry being the most innovative travel industry segment compared with other segments including the hotel industry. “Why do you ‘get it’?” she asked the cruise executives. “Why are you so innovative?”
“We truly feel it is in our DNA,” said Goldstein as he described a process that began with a simple blank sheet of paper and resulted in the design of the innovative Oasis of the Seas design. “We need to be a compelling force that drives our company, and to some extent this industry, forward,” Goldstein said.
Goldstein also pointed to history. From the industry’s inception, “right at the top was an absolute focus to create new products that would entice customers so we could grow the market from a little niche thing -- that in 1970 had 500,000 customers -- to become a mainstream vacation option with well over 10 million [customers], which is what our industry has accomplished,” said Goldstein. “And there was always a sense that innovation would pave that path.”
“Innovation is trying to find things your guests would love but can’t get anywhere else,” emphasized Marlow. She said she recently introduced 35 of Cunard’s top guests to Her Majesty the Queen, Prince Phillip and Prince Charles. “That remains with our guests, and they have been telling everyone about it,” she said. “And that’s different and that’s new and that’s innovation.”
Citing his line’s cruise3sixty press conference about Norwegian Epic with a series of new innovations, “I think it gets back to the industry itself, and we all have to keep very crisp and sharp – because we’re competing with each other to differentiate our product offerings so we can stand out from the rest,” said Sheehan.
Often describing ships as works of art, Sasso stressed that every single space, every detail, every design feature, every soft good is thought about months in advance of design and delivery.
Rach asked the group about what advice they’d offer to travel agents to prepare for the next 18 months? Cahill advised agents to first do what’s needed to survive and then position themselves for the long term.
“The last thing anybody should do in this world is cut back on their marketing expenditures,” Cahill stressed. “You hate the pricing, we hate the pricing, but this is an opportunity to attract a whole bunch of people who have never gone on a cruise vacation before.”
Keep costs under control, run a tight ship, and most of all, “stay close to your customers, keep understanding what they want, and make sure you ask them what they want to do,” said Marlow. Use technology, take advantage of it…you need to leverage the technology, become more efficient,” said Sasso.
“I think it just gets back to keeping on the top of your game,” said Sheehan. Prior to his involvement in the cruise industry, he planned a personal cruise and wasn’t sure how to proceed with the transaction – but knew he wanted the entire trip to be perfect. His agent helped him through the transaction and he urged clients to do that with their own clients.
Be optimistic, noted Goldstein praising the attitude of those in the audience. He also said agents must remember that the end result of what they do is to make people really happy. “We have the best industry in the world for doing that and we need to keep doing that,” he said.
In terms of supplier/agent relationships, “you’re more important than you ever were before,” Sasso explained. “Because we keep building the ships. They’re not going to stop coming. And every time we have a little blip, a little turbulence, we need you more than ever.”
When the conference concluded, agents seemed pleased. “I believe participants walked away excited about the rest of 2009 and for being a part of this incredible industry,” said Anderson.