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Incredible Wave Deals Kick-Start Consumer DemandJanuary 15, 2009 By: Susan Young
While the last quarter of 2008 was a difficult “sell” for client bookings, initial reports in early January indicate that this month’s Wave Season bookings— while still below the norm for many agencies— are on the rise. Agents say that’s attributable to shockingly low cruise fares, reduced deposits, elimination of fuel surcharges and supplier creativity in rolling out value-added perks.
“There are a ton of promotions out there right now, making cruising an even better value than it already was,” stresses Steven Hattem, vice president of marketing for CruiseOne and Cruises Inc. “These offers are certainly helping stimulate activity.”
Similarly encouraged is Michelle Fee, CEO of Cruise Planners, who says, “I’m happy to report that our agents’ phones are ringing – Yeah!”
“It's still too early to tell [about whether consumer demand will continue to build] but clearly there is some activity,” acknowledges Jack Mannix, president and CEO, Ensemble Travel Group. Mannix says he suspects the phones are ringing in response to the supplier offers, rather than signifying the beginning of a true economic recovery. “That said, we are delighted to see at least some call volume following a very quiet fourth quarter,” Mannix notes.
Starting January 5, most of AAA Auto Club South’s 70 locations in Florida, Georgia and Tennessee have reported increased customer vacation requests, according to Jim Sweat, managing director of travel agency services for AAA Auto Club South. “We also have seen an increase in the amount of consumer attendance and interest in our consumer events which have taken place over the past week.”
Princess Cruises reported its biggest booking day ever on January 12, with volume up 17 percent from the previous top booking day. Yes, skittish consumers remain worried about their personal financial situation, say agency executives. But the executives also report many consumers are finding the extraordinarily lucrative perks and deals just too good to pass up.
In Princess’ case, a Balcony Bonanza program is helping drive bookings. Valid for most summer sailings this year to Alaska, Europe and the Caribbean, that promotion enables agents to provide a free upgrade to a balcony stateroom for the price of a standard oceanview stateroom. Clients reap a savings or up to $1,200 per cabin.
Industry-wide and for Holland America, “pricing is unprecedented,” acknowledges Rick Meadows, Holland America Line’s executive vice president of marketing, sales and guest programs. He believes savvy agents who aggressively promote, communicate effectively with clients, and hammer home the value message will succeed.
Holland America offers a Vacation Stimulus Plan with such perks as reduced deposits, cancellation protection plan savings and lower fares. For example, several 10-day Holland America Noordam cruises this year in the Mediterranean are priced at just $999 per person for an inside stateroom. That compares with last year’s lead-in pricing for a similar cruise of $1,799 per person or peak season pricing of $2,149 per person.
In late 2008, Royal Caribbean International, Celebrity and Azamara Cruises introduced its Agent Support Action Program, which began this month; the consumer promotion is labeled as Amazing Ships, Amazing Perks. Reduced deposits and onboard credits are available for many 2009 and 2010 sailings.
New enticements from suppliers pop up almost daily. This week Costa Cruises debuted its Wave Season “So Much More Amore" promotion for select Mediterranean sailings. Guests will enjoy free upgrades; a $200 onboard credit; kids sail free specials; and 60 percent off regular fares.
A few other recent offers?
Carnival Cruise Lines launched Early Saver, offering fares up to 25 percent lower than the best generally available rates; the program also provides rate protection if rates later drop below what the consumer originally paid.
Celebrity Cruises launched the Celebrity Triple Star Celebration; this booking promotion rewards travel agents and guests for booking (over the next two months) cruises in Alaska, the Caribbean and Europe. Travel agents who book at least one Celebrity cruise for each of those destinations by February 29, 2008, will qualify to be entered into a drawing for prizes.
Norwegian Cruise Lines expanded its Wave Season Freestyle Resolution Sales Event with 50 percent off the standard cruise booking deposit for all sailings fleet-wide for a limited time – through January 17.
Niche and river lines have also sweetened the value proposition for clients. Among the many examples? Cruise West’s Stowaway Program allows guests to travel on short notice and receive 25 percent off the cruise-only brochure rate for spring itineraries to Japan, Mexico’s Sea of Cortés, the Columbia & Snake Rivers, British Columbia, Costa Rica and Panama.
AMAWATERWAYS just announced a free air offer from its guests headed to Europe during April. It’s available from the gateways of Atlanta, Boston, Chicago, Los Angeles, Miami, New York, Phoenix, Seattle and Washington, D.C.
“We’re very excited that the first part of January has really started off with a bang here at AMAWATERWAYS,” says Kristin Karst, vice president of sales and co-owner. “The public is ready to cruise.” The river line plans fam trips for agents this spring and other promotions soon.
From one trade perspective, “I’ve checked our numbers and comparing the first two weeks [of January], it looks like we may be back on track,” says Fee. She says that’s a good thing, as the comparison of the last quarter of 2007 with the last quarter of 2008 “was scary.”
Hattem too is encouraged: “We have seen some very positive upward movement over the last week and we are pleased that business is coming in at increased levels.” But he says it’s “still too early to tell” if the Wave Season uplift will continue. He points to both up and down days over the past few months.
One positive factor spurring some bookings is the elimination of fuel surcharges. While fuel pricing is once again inching upward, fuel costs still remain much lower than last summer. Most major lines have— at least for now— dropped the surcharges. For example, MSC Cruises, which also offers a Kids Sail Free program and advantageous pricing to entice clients onboard, dropped its fuel surcharge in mid-December.
As bookings rise, however, Hattem and other agents say more consumers are waiting until the last minute to book. The booking curve has shortened considerably. During last year’s Wave Season, many Alaska and European cruise ships were already well booked for the coming summer. That isn’t the case this year.
Aggressive marketing, though, is helping fill cabins. For the first time in years, Cruise Planners continued to market to customers through the entire holiday season. “I do believe that has helped us kick start the year, and with the cruise lines offering great deals with lots of perks, it should help us recoup and get back on track,” Fee stresses.
Agents, however, probably can count on lower commission per sale – given the shockingly low pricing being offered on many cruise promotions. Yes, “we all know this will be a challenging year, and prices are below market value, but our mindset is, a sale is a sale,” emphasizes Fee.
AAA Auto Club South plans nine upscale special-invitation events for consumers in the next few weeks. Multiple travel suppliers will participate. “The RSVP’s for those events are coming in at a very optimistic pace,” says Sweat, “so I am cautiously optimistic that we are going to have a small wave of business activity over the next few weeks.” Leveraging your partner relationships is “super smart,” notes Meadows.
Ensemble is conducting training for members on how to proactively stimulate sales. “We are going to pay out about half of our anticipated 2008 profit sharing to members within the next couple of weeks (to ensure that we help them should cash flow be an issue for them),” stresses Mannix. Normally, Ensemble would not pay it out until later in the year following auditing of 2008 results.
What are agents doing to keep the phone ringing? “They’re very busy cooking up business, they’re not lying down,” says Meadows, who says “It all comes down to both adding and communicating value.” Do that with your prospects, stresses Meadows and “he or she will buy now.” But, he says, agents also need to make a strong and compelling case; stress inclusive value; and compare a cruise with land-based options.
Mannix sees it this way: “The travel professionals who are aggressive and proactive will survive and many will even thrive. Those who wait for the business to come to them will find 2009 a very difficult year and some will not survive. It's that simple.”
He says comparing this year’s Wave Season to last year’s is difficult, as bookings were exceptionally strong last year. In contrast, “2009 is a year in which we're all doing the best we can to mitigate very soft demand by maximizing sales while managing expenses more closely," Mannix says. “No one thinks for a moment it will be a record year - but the good ones will survive and many will actually prosper.”
Moving forward, “we are optimistic and like what we are seeing now in regards to bookings and prior Wave Seasons,” says Hattem. “It it a trend? We will see.”