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Celebrity Cruises Launches New Three-Level Pricing StructureJuly 6, 2015 By: Susan Young
|Celebrity Cruises is introducing a new pricing structure focusing on inclusive amenities. // Photo by Susan J. Young|
Celebrity Cruises launched a bold new pricing structure today. Championing inclusivity and choice, it's created three new fare levels -- Go Big, Go Better and Go Best -- for each stateroom or suite category (oceanview category and above). Guests simply choose the fare level they wish when they book, based upon the amenities they wish included.
|Dondra Ritzenthaler of Celebrity Cruises|
“Three years ago we launched 1-2-3 Go and it really kind of changed the industry,” says Dondra Ritzenthaler, Celebrity's senior vice president of sales, who says the promotional concept was well liked by both customers and agents alike. The program starts today for cruises sailing on or after Oct. 1.
Both the line's website and Espresso, the line's new travel agent reservations system, will now reflect three fare choices when people are looking at oceanview and above stateroom and suite categories on most sailings.
Three Fare Levels, Choice of Inclusions
Menu of choices? Guests choose from a list of four items: a classic beverage package, prepaid gratuities, unlimited Internet on one device per person and an onboard credit of $150 per person for up to two people in the cabin.
• The Go Big price will allow guests to choose one amenity from that list.
• Go Better, the next highest fare price, includes two of those inclusions. Again, guests choose which they desire.
• Go Best is a higher fare and guests receive the ultimate – all four of those amenities for a most inclusive vacation.
Plus, with Go Best the classic beverage package is upgraded to a premium beverage package, providing a more extensive wine and spirits selection. Agents can see a side by side comparison of those packages here.
Third and fourth guests in the stateroom (oceanview and above) each receive a 40-minute Internet package and free classic non-alcoholic beverage packages.
Why these specific amenities? Ritzenthaler said Celebrity heard loud and clear from agents about the past 1-2-3 promotions: “Don’t change the amenities.”
Drew Daly, general manager, network engagement and performance, CruiseOne and Cruises Inc., Fort Lauderdale, FL, likes the new strategy because it's one effort to move from a marketplace of robust promotions which can be confusing for agents to deal with. Instead, "The new pricing strategy from Celebrity helps to eliminate both agent and consumer confusion and is a consistent message in the marketplace, since this is not a promotion but an evergreen pricing strategy."
The Next Big Things
Lisa Lutoff-Perlo, Celebrity’s new president, challenged her team to come up with “the next big things,” with a goal of being an innovator and industry leader, said Ritzenthaler.
|This is an example of the promotional approach the line will use with the new fare structure. // Photo courtesy of Celebrity Cruises|
She also noted that the three overiding principles for creating a new fare structure were to give the consumer the ultimate in choice, to protect travel agent commission when changes were made and to make whatever was created “easy to understand and easy to book.”
The new pricing structure applies to ocean view and above category (including oceanview, balcony, concierge, AquaSpa and suite categories) It’s being implemented fleetwide.
Exceptions? It’s not going to be available for inside cabins on any ship, nor for transatlantic, transpacific or South America repositioning sailings, nor for Celebrity Xpedition, the line’s small Galapagos ship. But on the bulk of its cruises, the new structure will give agents more options.
Celebrity serves a diverse customer base. Some guests are wealthy and price isn’t an issue. Others are working professionals eager for value-adds to help keep the trip more affordable. And some are first time cruisers or more budget-minded.
“We knew that with the size of our fleet, we couldn’t go all-inclusive for all the fleet, as not everybody would want that,” Ritzenthaler told Travel Agent. So the line left inside cabin pricing alone without the choice of any amenity. That was essentially based on the feedback of some travel agents, whose business depends on a low lead-in price, designed to get first timers and cost-conscious people to try the product.
“We give our partners all different models to sell,” says Ritzenthaler. She says agents can promote the lead-in inside rate, if that’s their business model. Or, if their lead-in is the ocean rate, they can promote that and say that the rate automatically includes a great amenity. “That’s the reason we started the program at ocean view," she said.
However, while Celebrity did leave the inside cabin rate and concept as is, Ritzenthaler says it may be “tweaked” moving forward as the line evaluates how the new fare structure is working.
|Celebrity's most loyal guests will have reduced deposits under the new fare structure // Photo of Celebrity Reflection by Susan J. Young.|
Building in Value
Celebrity has increased fares to reflect the amenities within the fare categories. Yet, “we’re building in the value,” says Ritzenthaler, so the guest would still pay more if they went aboard and bought the amenity on their own and added it to the fare.
“Here’s the value to the trade,” emphasizes Ritzenthaler. "When the fare was cruise only, the guest still went onboard and bought the beverage package, but the agent didn’t earn commission on that. Now with that included in the fare, the trade earns commission.”
For Captain’s Club members, Classic tier and above past guests, the new program also includes a permanent 50 percent reduction in deposits. With the former 1-2-3 promotions, sometimes the line reduced deposits, other times not. “We want to recognize them, and with this being a new pricing program, that was kept in the forefront,” she said.
What about clients who have already booked and say, “I want those amenities”? Ritzenthaler said that as long as the clients aren’t in the final payment period, the line will allow them to rebook using the new structure with the included perks. Depending the price they paid, though, that may or may not be advantageous.
Final payment is due 75 days prior to sailing for standard departures, or 90 days for holiday sailings and other select departures. Agents are being trained “big time” says Ritzenthaler, with two to three Webinars a day.
In addition, the line’s field sales force is doing a travel agent blitz this week to meet with partners. “We’re doing everything we can do,” she said, noting that with just a bit of direction, the program is easily understood.
Celebrity’s pricing move is yet another move for the lines in the premium and luxury sector to become more inclusive, keep the price up for agents and the line, and yet offer the kind of perks guests want.
What are your thoughts? Do you like the new fare structure? Let us know on our Facebook page and in the comments below.