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Cruise Roundtable

September 27, 2010 By: Ruthanne Terrero Travel Agent


John McMahon, vice president/group publisher of The Travel Group; Ken Watson, COO, Silversea; Terri Haas, chief commercial officer for Compagnie du Ponant in North America; Rick Sasso, president and CEO of MSC Cruises in North America; Maurice Zarmati, president & CEO, Costa Cruises; Mitchell Schlesinger, vice president, sales & marketing, Voyages to Antiquity; Vicki Freed, senior vice president of sales, Royal Caribbean; Larry Pimentel, president and CEO of Azamara Club Cruises; Jack E. Mannix, Jack E. Mannix & Associates; Chris Austin, vice president of global retail, leisure and luxury sales for Starwood Hotels & Resorts; Bob Sharak, executive vice president, marketing and distribution for CLIA; and Ruthanne Terrero, vice president and editorial director for The Travel Group


Travel Agent magazine brought together the braintrust of the cruising industry, who all spoke candidly about what agents are  doing right—and wrong—in the current selling environment.

Ruthanne Terrero, Travel Agent magazine: How can travel agents be partners to the cruise lines? What can they be doing that they are not doing now?

Vicki Freed, Royal Caribbean:

I don’t think it’s a one-way street. Not only can travel agents be better partners to us but we need to be better partners to them. Sure, the agent should take advantage of the resources we have at each of our companies in terms of education and local support on the business development manager level. They should also make use of our knowledge on things that have worked for other agents so that they can grow their business. We have to be partners with them, they have to be partners with us and we will all succeed.

Jack Mannix pointed out that the ones that were successful during the recession, and still are, are the ones attuned to the customer. If they focus on the customer, they will be very successful. So often travel agents tell me, “Vicki, I send clients direct mail, I am sending them e-mails,” but I ask, how often do you talk to them? And they say, “Well, when they call.” 

An e-mail is a monologue but a conversation is a dialogue. You are going to be much more successful and effective in this business if you reach out to your consumer. We all know statistics, that in our industry, four out of five people that buy a cruise vacation today will buy their next cruise vacation with somebody else. It’s not because the travel agent provided them with bad service. You never want to be that kind of middle-category agent where they don’t feel a connection with you.

Reaching out to the customer and staying in touch is just good business practice. We all know that if you do that, you will be successful—you will get a lot of repeat clients because once you get them, you want to keep them. And through repeat business, you get referral business and at the end of day, it’s all about repeat referrals.

Jack Mannix, Jack E. Mannix and Associates:

If I may build on that, over the years I have spoken to all of you in many different events and on multiple occasions, I have told groups of travel agents that you would rather have a double-root canal than make calls to customers. That always gets a sort of nervous chuckle, because the reality is—and I am not really sure why— people are not proactive enough. Building that relationship Vicki just described is critical because you don’t know when the customer is going to make that decision. You have to be in touch on and off, all the time. That relationship should be the differentiator from most of the marketplace, which isn’t in touch with the customer. So if I have that bond with my customer, of course, I need to have the goods, the product knowledge and all that. But if I have the personal bond with my customer, that’s really the glue that holds a lot of the other stuff together. For the smart retailer, it’s a key differentiator. By the way, when you have that deep relationship with the customer, you also get to know them so intimately that you can decide more clearly the best product for them. 

Maurice Zarmati, Costa Cruises:

Once you build that relationship with an agent and you get them to trust you and understand your brand, you have to turn around and have their offices consider taking a course itself. That’s where I think a number of us could do a better job, including myself. We don’t do enough selling seminars in agents’ offices. We are more prone to doing product seminars. I remember Larry [Pimentel, from Azamara] doing this on an ongoing basis for years. They are product-oriented and product knowledge-oriented and they want to learn more about the product, they need to learn how to get in step with the agent, how to overcome the objections and then how to ask for the sale. Invariably, they tend not to ask for the sale, those that should and they do but those that should ask for the sale because of fear of failure. It hits all of our egos when we get a no. But the more you ask, the more you sell. If we can convince them to do that we can take ourselves to the next level.

Terri Haas, Compagnie du Ponant:

I can echo all of these statements, too, especially the idea of having the personal touch. It’s very easy to send e-mails out to people and say, “hey, look what I have got to offer today,” but avoiding the personal touch—of picking up the phone and calling them—goes back to the fear of failure. Many agents are afraid to pick up the phone thinking what if they don’t want to hear from me today, would they like what I am saying? But to overcome that fear, nothing more than a phone call to your client will do. If you call up a customer and say, “You know what, I just saw this whole new French-flagged cruise line that’s really awesome and I think you would love it,” you would be a lot more successful and feel a lot more confident about continuing doing that. And to build a little bit on what you said, Maurice, not only asking for the sale but not being afraid to sell off because people are looking for value, we have all been talking about value. Sometimes that value equates to spending a little more money for a little better product at the same price. So if you can sell the value, you are going to get the customer who feels they’ve made a great purchase and they are going to keep coming back.

Ken Watson, COO, Silversea:

You’ve got to sell and the key thing is you close that sale. Once that is done, you should service that sale. What I mean is, if an agent books somebody on a cruise for 120 days out and then goes on to the next sale without servicing that booking during those 120 days, it leads to attrition. On average, attrition in our segment of business is about 35 percent, which means about 35 percent of the bookings go through normal cancellations. But a lot of cancellations also happen because the agent has not serviced their client during the period following the booking. We have done some research on this and seen that if the agent stays in touch with their client during that period, they will reduce attrition by about 10 points. And that’s money in their pockets. So, it’s important not only to make the sale, but to close the sale and then service the sale afterward.

Bob Sharak, CLIA:

Finding that new customer is of utmost importance, so you have to be greedy and smart to find the very best people [to sell]. And then you have to invest in training like we do—product training from the cruise lines and the training on the online courses and booking tools available from the different cruise lines. This is a case where I think greed is good and the agency or agent looking to get more than their fair share of the pie is the one that will benefit our industry the most.

Mitch Schlesinger, Voyages to Antiquity:

It’s a client’s world because at the end of the day, first of all, it’s about repeat clients—they are a lot less expensive to get to return. It’s disappointing when you talk to clients and find out how low their retention is. We have a significant process going on in the society to keep more people alive longer and more active—70 is the new 50. Remember 10 years ago, we were running around yelling every day about another 10,000 Americans turning 50; 10 years later, all those people have turned 60; and 10 years from now, they are all going to be 70. Around 1990, there were about 35 million Americans alive over the age of 70. In 2020, that number is going to be double. That’s an enormous opportunity because as these people age—we all know this because we have them on our ships—they travel longer, spend more money, all adding to the travel agent’s income. But this is not possible if you haven’t been able to retain the client. They are going to find somebody to book their trips for them, so you have to stick with them over time. Hence, it’s important for travel agents to hone the skills of retaining their clients as they book through the years. A smart travel agent will take their clients and guide them through the travel process, based on what they know about them. They tell them what’s best for them and help make decisions.

Larry Pimentel, Azamara Club Cruises:

Everybody has mentioned a lot of viable things from selling to relationship and the loyalty factor. But it goes back to combining the understanding of the product destination and the business aspects. Beyond that, it’s sustainability—I mean that’s the way to be viable and to grow the business. So one of the things that’s often perplexing for me and the retail agent is the home-based agent, which has kept growing. Now they’re out of the brick-and-mortar environment and work out of their homes, but many of them have great relationships with the clients. Some of those relationships are phenomenal. But dealing with the selling and closing and marketing to them with more emphasis not like by the alliance to the agents but the agents to the line participating in that dialog, I think it’s absolutely essential because now I am part of the network. But I have to tell you when you’re by yourself, you’re by yourself. And so, the industry as a whole has to do a better job of getting the important home-based agent plugged in. They have a lack of what we have as the greatest luxury—time. They are expected to do a lot of things and I am looking at that. I think the lines have to do better and those agents have to give time to webinars, trade shows and other opportunities available with the lines to plug in, where they can really learn how to sell and market better and not just about the product.

A and B equals a lot of cash if you put together the business aspect with the selling and the marketing, that’s what you get to the result and you are better for your client at the end because if you are not around, how are you helping your client?

Chris Austin, Starwood:

I would like to add a word to what Larry was saying. When he says “sell and market,” I would like to put it as “sell and market the experience.” We will have fantastic product—maybe we’re to blame for this—but I think we often match customers with the wrong product. Everybody’s product delivers a different experience and we do watch the cruise industry and learn some great lessons from it. We have nine brands and we are asked numerous times why we have so many and if they aren’t the same. I say no, because each one of them delivers a completely different experience. If you put the wrong customer with the wrong brand, you might lose them.

It’s very easy to align our brands with some of the cruise lines and marry those two experiences. So it’s almost seamless and again, it’s exceeds the expectations that the consumer has.


Costa Cruises’ Maurice Zarmati got his counterparts thinking when he said everyone—including himself and a number of people in the room—could do a better job with agents


Ruthanne Terrero: Do you feel that agents are taking advantage of the opportunities that you have available to them? Do you feel they could be reaching out to you more to do co-op, client events and those types of things?

Rick Sasso, MSC Cruises:

We are lucky that technology has allowed home-based agents to have information at their fingertips. You can communicate with them and feed phone calls to them. But there are a lot of agents still afraid of technology. There are a lot who don’t look for new business. Here’s a quick example. We all do themed cruises from time to time. If I were an agent anywhere in the U.S. and there was a Big Band cruise or a baseball-themed cruise, I would be looking around my neighborhood to see who I was going to get to sponsor the group for that theme because, obviously, there is a Big Band station on the radio somewhere in that market. So, agents need to be more proactive, use the technology and, more than anything else, they need to close more sales. They have opportunities but they don’t close enough of those opportunities. And if they do get the education and learn the way we know how the sale operates, we can close the sale five times greater than the average person. We need to make that average person, that home-based agent, be as knowledgeable and enthusiastic about closing a sale as we are. That way they will close more sales and improve their bottom line. 

Bob Sharak, CLIA:

We launched The World’s Largest Cruise Night—the next edition is coming up this October—and It’s the North American platform for promotional events. That brings together the cruise lines and agents to offer great deals on the lines. We market and help do a lot of PR. Last year, we had over 1,300 agencies conducting physical events on that one evening. Fifty thousand consumers came through their doors and we had 2,800 online promotions happening. And the agents will accept the fact that they sold $45 million in cruises during that promotional period from the agency survey. So, part of what we are looking at is how do we help engage them and provide them with a prepackaged promotion? Once they do it, they find this terribly successful and it goes across again. And we had luxury events where high-end car dealerships were selling big-ticket items. So another way we are looking at it is how does CLIA help connect the dots and engage the agents and the cruise lines for their benefit.

Vicki Freed, Royal Caribbean:

I don’t believe it is one size fits itself. I don’t think to be successful, everyone has to be spending co-op dollars. There are different models and techniques to be successful. And that’s the attractiveness of our industry—that different models exist and can be widely successful. I talk to travel agents every day, they call me because I offer my phone number and my e-mail ID and say, “Give me a call and I will call you back and we will talk about how you can build your business.” What I find is that a lot of newbies in this business have the enthusiasm, passion and drive to succeed but don’t always know how to get the customers. They’ve gone through the education, gained the product knowledge and now it’s like, “Okay, what next? How do I get out there?” That’s when we can help through our local BDMs. I talked to an agent yesterday and asked her about her interests and passions. Turns out she is a breast cancer survivor and wanted to do a fund-raising event with the Susan G. Komen Foundation. I said, “Okay, now we have the idea, how are we going to explore that and get the platform to get the customers?” So we talked about engaging a private school where you can get students to do community service hours, have the event there and get word out to parents at the school. 

There are all kinds of ways to be successful in this business. Sometimes agents just need someone to guide them on how to find the customer.

They have got the knowledge, passion and the enthusiasm. All they need now is to get the sales. At the end of the day, this is a volume business. To be successful and to make money, you need to have revenue. Now, it’s not necessarily revenue—$399 cruises—you can cherry-pick the demographic or the kind of cruise vacation you want to sell. But if you are a realtor and sell one or two houses a year, you are not going to make a living. It’s a hobby. If you want to be successful, you have to be in this game, and sell in volume to enjoy the perks and benefits of what the business is all about. That’s travel!

Maurice Zarmati, Costa Cruises:

We sat with the agency community, selected people and taught them the step-by-step process [of selling]. And when they came out of the session, they complimented us for telling them it’s not that difficult once there is a game plan. It’s not that difficult to take inventory of where you failed and how to fix it. If you do fail because you don’t get the prospect, that’s okay, there are 10 others behind them.

Ken Watson, COO, Silversea:

We are involved with a number of different agencies in different parts of the U.S. and we see things in different locations that many times the agents do not see because they are just not there. If we act as an information hub, providing information on how someone else is doing something that could help them out and if we are a good advisor to the agent, then they are going to benefit from that. I always tell our salespeople to be an information source to our travel community, because if we can help them, we will benefit all as a result.

Think about what’s happened during this recession; during the last four or five years, think of the number of people that have come into the travel agent community, people who have never been in this business before and yet, are extremely successful. That gives me hope that we have a very vibrant and growing industry. If we can take the best practices from the people that have entered the industry to help the industry on a whole, we are all going to benefit.

Larry Pimentel, Azamara Club Cruises:

I love hearing about [Travel Agent magazine] doing things for the 40-and-under group because I’ve myself been teaching them classes at NYU in New York at the Stern Business School for many years. Invariably in every class, I ask these really bright hospitality and business students, how many of them are considering being a retail travel agent? And I have never seen a hand go up. We are all getting older and I don’t see enough young people coming into the business. I believe that’s a significant challenge to the industry and I think there are, perhaps, lots of reasons but it’s terribly concerning. There used to be many travel schools around the country years ago that have vanished. I just don’t see young people coming into the sector. 


Larry Pimentel, Azamara Cruises, says that agents need to distinguish who their clients are and what kind of vacation experience is really right for them


Ruthanne Terrero: What are booking patterns looking like? Are clients still booking close in or are they starting to book further out?

Vicki Freed, Royal Caribbean:

It’s a little bit of both. People who are finding special occasion vacations such as anniversaries, weddings or honeymoons are, of course, booking further out for school vacations or holiday cruises. For shorter cruises, people tend to plan a little closer in and it’s not as big a deal in terms of time and money.

Larry Pimentel, Azamara Club Cruises:

I think things can transcend the economy when the experience is perceived to be so unique that people want a piece of it. They will pay the rate to get there because it’s something that’s enriching to them. There is a lot of clinical data that would suggest the price ceases to be a factor when the buyer believes that what they buy will do something for them. 

There are shifts. I look at the Oasis of the Seas and this is a shocking thing for a guy who spent his life in the luxury sector but I have to tell you, on my first visit to to 150 Central Park there were a hundred or so people, then to the comedy club, a hundred or so people. I don’t know where the other thousands of people were. I had a very upscale experience at 150 Central Park, whose chef was declared the best at the Dubai competition. We are talking about something that people would classically say is mass-market. I didn’t see it that way. So, when that experience transcends and people see that, and when the media around the world grabs onto it, people say, “Gee, that seems cool.” Finding that niche, educating the agent, and the agent educating the client, not just informing but selling—that’s where we have the homerun.

Ruthanne Terrero: It requires a lot of skill to take a luxury client and put them on a ship that may be perceived as mass-market.

Larry Pimentel, Azamara Club Cruises:

Clients have different holidays at different times. Grandmas and grandpas go with their kids and their kids’ kids. My ship is not great for families, that’s not what we are about. [Another] ship may be great for families because that’s part of what they do. There is a time for the family vacation but also a time for the couple’s vacation that’s more intensely destination-oriented. It’s up to the agent to distinguish the type of vacation but first of all, they have to know the type of client—who are they, what do they want and what are they looking for. So if the agent knows the sales process, they will qualify the client, they will get the normal objections but they will overcome those objections because they will have a toolkit to help them with different ways of going about it. But never sell what you love, sell what they want, and that’s an important thing because I see a lot of mis-selling that goes on as well. It’s very easy to do if you don’t think the process through.

Vicki Freed, Royal Caribbean:

Let me clarify something very important. It’s about qualifying but also requalifying for that next vacation because somebody who has been on the Azamara Club Cruises’ luxury cruise may now want to take their family along and you wouldn’t necessarily put them back on that ship. You would put them on a ship that can offer them the luxury but also the family experience, so it’s always important to requalify for each vacation.

Maurice Zarmati, Costa Cruises:

How do you, the travel agent, recommend with confidence, because the more confident you are in presenting the product, the higher the probability of the client buying it. If the client doesn’t buy, how much chutzpah does the agent have to pursue it until it’s a yes or no. It’s that agent who is most successful.

Larry Pimentel, Azamara Club Cruises:

Maurice has brought up something I think is so significant for the agent community and we know it as people who are selling for the agents in large part and that’s confidence. I will tell you that clinical data is just crystal-clear. The more upscale the product, the higher the price point. The buyer who pays more does not want to talk to somebody who knows less. They want someone who knows a lot. I am not only talking about information about the destination but about the product as well. They want you to help them, sell them on the value of the product irrespective of the price point and that is such a critical point in getting into the luxury space and pushing up.

How many times have you been in a store with a salesperson, who was so good at what they did, you felt they gave you the confidence to acquire that product? I’ve been to some electronics stores where I wanted an explanation for something but couldn’t find a person to help me. I am willing to pay a bit more to get better service but if I can grab a great deal that some places offer and get service, why would I go anyplace else?

Chris Austin, Starwood:

Recently, I was told by my sales team that there was a $50,000 booking for one of the resorts, with the client traveling the following weekend. It’s unbelievable, and yet people are still booking a long way out.

But there is this mass group that is still waiting for the deal and the travel professional educates them that the deal is not always going to be available. For example, the brand-new St. Regis isn’t even open and we are 100 percent sold out for Christmas. So if people are sitting around waiting for the deal and they want to go to that particular resort, they are not going to get it. Being proactive is about educating your customers that they’ve got to start planning.

As suppliers, we want deals to disappear as fast as possible. We still want to deliver value and fabulous experiences but we want rates to increase as fast as they can. That’s healthy for the travel professional as well because they are earning a percentage of how we price that product.

Terri Haas, Compagnie du Ponant:

One reason that a lot of us are saying there are bookings all over the map is because everybody has a different definition of value; it’s what’s valuable to them.

Ken Watson, Silversea:

I can tell you booking patterns are further out with our line. They are extending further out and it doesn’t matter that we sell about 50 percent of our business here in U.S. and another 50 percent around the world. If you look at how we are doing in the Asia-Pacific region or Europe, including UK today, every one of those booking patterns are further out. 

We haven’t even opened for 2012 and we already have a waitlist for the World Cruise. It shows that the confidence is returning again and if we keep the market volatility low, you are going to see that booking patterns will straighten out.

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