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Cruise Sales 2014 - Top 5 Factors to WatchJuly 31, 2013 By: Susan Young Travel Agent
|Royal Caribbean’s Quantum of the Seas, with its 360-degree London Eye-inspired experience, will raise the bar even higher than sister ship Oasis of the Seas.|
Entering the second half of 2013, travel advisors who sell cruises are gearing up for CLIA’s annual National Cruise Vacation Week from October 20–27. It’s also time to dust off agency business plans and fine-tune them for 2014. What key factors will influence cruise industry sales next year? Based on anecdotal discussions with agents and industry leaders, here are “Five Top Cruise Factors to Watch” in 2014.
1. The “Quantum Effect” and New Ship Appeal
All new ships create marketplace buzz, but when Oasis of the Seas debuted in 2009, it was a game changer for the industry. The buzz for the big amenity-laden ship was so strong that it positively impacted sales throughout the cruise industry.
Agents predict that it will happen again next fall when Royal Caribbean International’s 167,800-ton, 4,180-passenger Quantum of the Seas debuts with hot new innovations.
For example, passengers might hop into bumper cars, go sky diving via a simulator or take a “London Eye”-type experience in a soaring mechanical arm that provides 360-degree views 300 feet in the air.
The 16-deck Quantum is the first ship in a new vessel class, so expect new types of staterooms and cabin categories. Among them are modular, family-friendly interconnecting inside and outside staterooms so people traveling together won’t have to navigate between non-connecting rooms in a public corridor. Studio staterooms, some with balconies, will likely draw singles eager to avoid a single supplement. The ship also has new junior suite categories, larger loft suites and new interior staterooms that have a virtual balcony, essentially a balcony-like visual on one wall with a video feed.
“Every new ship helps the entire industry and certainly those of us who are strong retailers of the cruise product,” says Scott Koepf, vice president of sales, Avoya Travel. He believes both Quantum of the Seas and Norwegian Cruise Line’s Norwegian Getaway, a second 4,028-passenger Breakaway-class ship, which will launch in early 2014, are “continuing evolutions” of two brands that have established a pattern of innovative, broadly appealing features.
“Sales are already coming in at a strong pace for these products,” Koepf notes. “As we believe the cruise industry is still a very young industry, these new additions will provide success for the cruise lines as well as the retailers who have strong partnerships with them.” In June, Princess Cruises will also launch Regal Princess, a sister to the highly successful Royal Princess, which debuted this summer, and in fall, Costa Cruises will welcome Costa Diadema.
2. Re-Valuation of Agents
Many advisors tell Travel Agent that as cruise lines sail into 2014, they will face more competition and capacity. It may be a year for suppliers to place even more value on agents. Even lines already perceived by most agents as trade friendly seem to be upping their game. For example, Royal Caribbean recently tweaked its onboard cruise sales process to better assist agents.
“We believe commission that the travel agent receives is earned,” stresses Vicki Freed, Royal Caribbean’s senior vice president, sales, trade support and service. “We don’t look at commission as a cost. We look at it as compensation for doing an excellent job in selling our brand.”
Many agents say Norwegian Cruise Line is an example of a cruise line that’s evolved into a more trade-friendly partner over the years. Ruth Turpin, owner, Cruises Etc., Fort Worth, TX, is impressed with both Norwegian Breakaway and the line’s Partners First program. After her recent sailing on that ship, “I’m amazed at how far Norwegian Cruise Line has come,” said Damian McCabe, CEO, McCabe World Travel, McLean, VA.
|Artistry II, launched earlier this year, will be joined by three new Avalon Waterways river ships in 2014. Pictured is one of the vessel’s Panorama Suites.|
Lynn Torrent, executive vice president, sales and guest services, Carnival Cruise Lines, acknowledges that Carnival must re-engage with agents. A newly launched Carnival Conversations program is eliciting face-to-face agent feedback at meetings in Tampa, FL, Aug. 22; Charleston, SC, Aug. 27; Miami, FL, Sept. 12; Los Angeles, CA, Oct. 2, and Houston, TX, Oct. 21. Torrent also says Carnival has adjusted some call center and web assistance procedures, lowered agents’ fam rates, and added back some co-op opportunities it previously removed. This fall, Carnival says it will introduce a new, more simplified pricing structure.
In addition, Carnival Corp. recently hired industry veteran and trade supporter Bob Dickinson as a consultant; he’s tasked with looking at all brands and evaluating trade relations. That’s a good sign, according to what agents have told us on our website and Facebook page.
3. Rollin’ on the Rivers
In a Cruise Lines International Association (CLIA) agent survey earlier this year, 77.2 percent of agents said specialty ocean and river cruise sales were a growing sales opportunity. Even negative media reports about Europe’s flooding this summer couldn’t dampen the public’s insatiable appetite for river cruising. Not surprisingly, in 2014, new ships, new itineraries and more promotional reach by river cruise operators are expected to further fuel that demand.
In Europe, Viking River Cruises will add 12 more new 190-passenger Viking Longships next year, while AmaWaterways will welcome two new European vessels, AmaSonata and AmaReina. Tauck’s new Inspire launches in April and a second vessel, Savor in June. Avalon Waterways will christen Avalon Poetry II, Avalon Impression and Avalon Illumination. The new SS Catherine will sail for the Uniworld Boutique River Cruise Collection while Scenic Cruises will launch Scenic Jade and Scenic Gem.
Elsewhere across the globe, South America’s upper Amazon River is seeing modest growth and Asia’s Mekong and Irrawaddy rivers are attracting strong cruise line interest and new vessels. In a recent survey of American Express travel agents, 27 percent cited Cambodia and Vietnam on the Mekong as “unexpected destinations” for heightened consumer interest.
Within North America, American Queen Steamboat Company launches American Empress on Columbia/Snake River itineraries in 2014, while American Cruise Lines awaits the debut of a sister ship to Queen of the Mississippi. Wherever your clients want to sail, river cruising will continue as a hot ticket in the new year.
4. The Power of Video
Expect increasing video usage for marketing and sales purposes by both cruise lines and agents. Holland America Line has embraced the trend by putting 560 different videos online, while Celebrity Cruises has a prominent link within the lead photo on the front page of its website that says “Watch Celebrity Videos.”
“We can pretty much say video will kill the travel brochure within the next couple of years as consumers continue to march online for dynamic resources to plan their travel experiences,” Tony Gonchar, vice president, American Express Travel Network, told agents at cruise3sixty in Vancouver this summer. He cited one eye-opening research study that showed 75 million unique users in the U.S. watch 39 billion videos monthly, an average of 20 hours and 213 videos per person.
5. 360-Degree Diversification
Diversity rules on all fronts in the cruise marketplace. The new Norwegian Getaway will sail year-round from PortMiami starting in early 2014 while the new MSC Divina will become MSC Cruises’ first year-round ship home ported in North America, also at PortMiami; it arrives this November. Both are modern, amenity-laden vessels with ship-within-a-ship enclaves of upper end staterooms and suites. But personality-wise, the two vessels couldn’t be more different.
MSC Cruises is tweaking MSC Divina’s activities and menus to better appeal to North Americans, yet still embracing European heritage and style; it offers a bit more relaxed style of cruising than some contemporary competitors, including Norwegian. Guests on the more frenetically focused Norwegian Getaway might head to the three-deck sports complex, put on a parka and grab a cool drink at the Ice Bar, view the Broadway show Legally Blonde, “splish and splash” at a five-slide Aqua Park or watch a fireworks display.
That diversity is advantageous, according to Andy Stuart, Norwegian’s executive vice president, global sales and passenger services. He says trusted travel advisors can help clients sort out the mindboggling array of options.
For example, not all vessels are mega-ships or river ships. Pearl Seas Cruises’ new 210-passenger, oceangoing Pearl Mist will launch in 2014 on seven- to 11-night Great Lakes, St. Lawrence Seaway, Canadian Maritimes and New England cruises, while Viking Ocean Cruises’ and Regent Seven Seas Cruises have ordered mid-sized 928-passenger and 738-passenger ships for delivery in 2015 and 2016, respectively.
No longer do clients want just any cruise; they also desire one that specifically indulges their personal passions. Next year Crystal Cruises will add six new themes to its portfolio including the Roman Empire, elegance, maritime history, magic, thrill-seeking and microbrews. Taking the themed concept even a step further is Voyages to Antiquity, which sails with a product targeted entirely at in-depth exploration of the ancient world.
With the cruise product diversity, matching luxury cruisers, solo travelers, families and affinity groups with the right ship and product, is crucial, according to Stuart: “That will get you good results.” And keep in mind that for 2014 “consumers are becoming increasingly global, both in where they are from and in the breadth of what they want to experience,” says Duffy.
Frank Del Rio, chairman and CEO, Prestige Cruise Holdings, parent company of Regent Seven Seas Cruises, reports his luxury brand currently attracts about 80 percent U.S. guests with 5 percent from Canada and 15 percent from other countries. But when Regent’s new ship is delivered in 2016, look for that to be more in the realm of 75-5-20. Many lines have seen even more dramatic shifts.
The cruise marketplace is evolving rapidly. So ‘now’ is a good time to bring out the business plan and fine-tune it based on the latest trends and what’s ahead for 2014.