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Dispatch From Cruise3Sixty 2012: "Takeaways From the Helm"April 30, 2012 By: Susan Young
|Left to right: Will Seccombe, chief marketing officer, Visit Florida; Christine Duffy, president and CEO, Cruise Lines International Association; Roger Dow, president and CEO, the U.S. Travel Association; Tony Gonchar, CEO, American Society of Travel Agents. // Photo by Susan J. Young|
More than 1,200 travel advisors listened intently to key “takeaway messages” during the keynote address of Christine Duffy, president and CEO, Cruise Lines International Association (CLIA) at the annual cruise3sixty conference in Port Everglades on Friday.
In a “View 360” General Session presentation, Duffy outlined the significant growth of the cruise industry as well as the great potential that delivers for agents.
She also was joined by top officials from the U.S. Travel Association, ASTA and Visit Florida to discuss the potential for a more cohesive industry effort to promote the value of agents as trusted travel advisors.
Fast Track Growth
While travel professionals were attending cruise3sixty, Duffy noted that more than 300,000 cruise passengers, (akin to the population of New Orleans) were sailing at the same time on the world’s oceans and rivers on CLIA-member line ships.
In fact, 17 million customers took a cruise last year, 10 million of those from the U.S. More than 225 million people have taken a cruise since 1980.
On average, the cruise industry has experienced a 7.5 percent annual growth rate for every year since 1980. Duffy asked the audience: “Now you tell me, 'what other industry can claim a record like that for 31 straight years?' Amazing.”
Duffy was quick to point out that the lines didn’t reach those levels all on their own. “The key to the growth and success of the cruise industry is also part of a great contribution that's been made by our travel agency partners,” she emphasized.
From the big-picture perspective, Duffy reported that U.S. travel agents in 2010 generated $90 billion in annual travel sales, one out of every three dollars spent on travel. She said that figure will increase to $100 billion next year.
She thanked the agents for their role in cruise sales, and also for being extraordinarily effective advocates for the industry - in helping put the industry safety record in perspective post-Concordia.
Despite the tragedy, Duffy said: “The travel agency community came together and served as a trusted voice to reassure the traveling public that cruising is and will continue to be one of the very safest vacation choices."
Agents at the General Session received a USB drive with a tool kit from CLIA on cruise line safety and operational issues and facts; the tool kit will also be placed on the CLIA Web site in the future.
Ships and Innovation
Duffy outlined the cruise industry’s growth - noting that it's rooted both in new tonnage and in innovation. Ship-wise, 40 new ships were introduced in the 1980s, 80 in the 1990s, and 143 in the 2000s.
Growth continues unabated with 231 ships expected to sail by 2015. So what’s new this year?
On the ocean side, Duffy mentioned Carnival Breeze, Celebrity Reflection, Costa Fascinosa, Disney Fantasy, MSC Divina, Oceania Cruises' Riviera, and Paul Gauguin Cruises' Tere Moana.
In addition, “river cruising has grown 10 percent each year for the past five years and [the lines have] nearly doubled their fleet,” she told the agent audience.
New river vessels include American Cruise Line’s Queen of the Mississippi, Avalon Waterways’ Vision, Visionary and Angkor, Uniworld’s River Saigon and AmaWaterways' AmaCerto, which Duffy herself will christen as godmother in May.
“While our growth has been incredibly strong, we’re even more excited about the growth coming, and together we can welcome millions of new passengers and introduce them to value,” said Duffy.
Innovation such as Michelin-star chefs, top-notch entertainment, family-friendly cabins, new technology and creative onboard amenities are also driving cruise growth, she said.
Economic Impact: A Driver of Jobs
So what’s the economic impact of cruising and why does it matter? According to the 2012 Cruise Market Watch, the cruise industry is a $33.5 billion industry today with $88 billion in economic impact.
That covers direct spending for jobs, services and purchases the lines make. But Duffy stressed that it also includes indirect spending in destinations and ports across the globe.
Make no doubt about it, “this business is a driver of jobs, and delivers great economic impact,” Duffy emphasized.
With that in mind, she told the agents that they truly matter. “Let’s not forget we are all part of something big and important, and part of an industry that contributes in a very meaningful way to the global economy and to travel and tourism, ” stressed Duffy.
CLIA also said plans to unveil a new technology platform for agents this summer, providing online access to data and enhanced functionality.
Evolution of the Trade
While several recent articles in the New York Times and Forbes celebrated the resurgence of travel agents and their value to consumers in the modern era, misperceptions still linger, Duffy noted.
She put up one example – a slide from the New Yorker magazine that showed a travel agency alongside a photo developing store and Internet Café, as businesses left behind in "the nostalgia district."
Duffy also said she was shocked to be watching an episode of "30 Rock" in which Tina Fey was having a dream and referred to the travel agent as “a ghost from days gone by.”
Given all the discussion and energy there is around this topic, Duffy said: “I believe as an industry we have to be more proactive at how we address the opportunities and the challenges."
It will help existing agents and also encourage next-generation agents as well as others who may want to enter the industry in a new career, she added.
“We need to define the value of agents, because if we don't, others will define it for us," Duffy said. "We have evolve the perception of what a travel agent is in the minds of consumers of all ages, particularly those who don't even know how to find a travel agent or use a travel agent."
She also said "we have to be able to make the shift from a travel agent to a trusted travel advisor,” Duffy said.
Strength in Numbers
As agents evolve into trusted, expert advisors and the industry continues to grow, Duffy said CLIA will organize an industry-wide dialogue and approach to the topic.
"We need to bring together other stakeholders who also benefit from and rely upon a healthy distribution channel,” Duffy emphasized. "No one group can do this alone."
She said that CLIA plans several discussion forums with industry leaders to gauge the level of support and commitment to developing an industry-wide approach and collaborative strategy.
In addition, she moderated an cruise3sixty General Session executive conversation about the topic. Participating were Roger Dow, president and CEO, the U.S. Travel Association; Tony Gonchar, CEO, American Society of Travel Agents (ASTA), and Will Seccombe, chief marketing officer, Visit Florida.
Gonchar, who was attending his first cruise3sixty, and Dow both expressed their willingness for dialogue. The goal is to avoid a fragmented approach when trying to demonstrate the importance of agents, their value to consumers, as well as the direct and indirect economic impact of the travel industry and cruising as a major part of that industry.
"I used to call our industry the Rodney Dangerfield of industries," Dow said, noting how difficult it's been in the past for government officials to truly understand the value of the travel industry as a whole.
But he said progress is being made on that front. The executives said it's appropriate to look at how to create a collaborative umbrella. Visit Florida’s Seccombe stressed "we should be working more closely together."
The travel industry’s products and promotion show people having a great time. That’s great, the executives said, but it can provide a misperception that the industry isn’t important. That's particularly a problem with taxation and regulatory issues.
The Human Touch
Everyone talks about technology and the end of agents, said Dow, noting that yes, if agents work the way they did 25 years ago, they will be gone. But, he cited a high-quality real estate agent as a good comparison; smart agents who become trusted advisors will succeed, even in a technological world.
Yet, “trust can be oversold,” Dow noted, inferring that the professional travel advisor has to deliver. “The further you go up on an expenditure, the more trust is important.
"If you go into a 7-11 and buy a Slurpee, you’re not too worried about who’s behind the counter," Dow said. "But, if you’re shelling out the amount of money that you put out for a cruise, you want to [know more about the advisor and whether it's the right product for me].”
Gonchar said travel agent transactions are 50 percent higher in gross value than what a supplier might capture. Showing the value of agents, he stressed: “It’s very difficult for suppliers to find that group of people who are part of a church group in Canton, OH.”
The executives collectively said it’s important that the industry address how to bring more new people into the business, and how to elevate the compensation so people can make a good living selling travel.
But the sales outlook remains bright, said Gonchar. Boomers retiring at the rate of 10,000 per day for each of the next 16 years is a huge agent opportunity, he noted.
While the definition of retirement has changed, that number of retiring boomers represents more than a trillion dollars of disposable income. Gonchar added: “The number one thing they want to spend money on is 'the experience,' and the number one experience is travel.”
Keep visiting www.travelagentcentral.com for further updates from cruise3sixty.