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News Analysis: What’s the Cruise Industry’s top 2011 Challenge?December 16, 2010 By: Susan Young Travel Agent
As agents and agency owners count down the remaining days of 2010, many wonder what lies ahead for the cruise industry in the new year. That was a popular topic of conversation at last week’s Luxury Travel Expo in Las Vegas.
So Travel Agent asked a few experts about their perspectives. What do they see as the cruise industry’s biggest challenge moving forward? Here’s what they said. Do you agree?
Taming the Economy: According to Steve Tracas, president and CEO of Vacation.com, the biggest ongoing challenge will be the [lackluster] economy as well as the ability of the average person to actually afford the vacation of their dreams.
“This challenge is coupled with the education process of the consumer, regarding what the modern cruise now entails and the fabulous value it represents,” Tracas said, noting that professional travel agents truly can make the difference in terms of whether consumers book or not.
Pushing Contemporary Commissions Higher: “Premium and Luxury cruise lines are enjoying tremendous support from travel professionals because their products continue to not only exceed customer expectations however also provide high commissions,” said Brad Anderson, co-president, Avoya Travel/America’s Vacation Center.
The challenge, he notes, comes in the contemporary category. Average commissions per sale have not kept pace with most agencies’ overhead, he says, so contemporary lines face a challenge in keeping travel professionals engaged in selling their products. “Focusing on a friction-free and highly efficient distribution network will be a key component for the future of the cruise industry," Anderson said.
Continuing to Innovate: “As we move forward into 2011 and beyond, the cruise lines must continue to innovate,” said Dwain Wall, senior vice president and general manager, CruiseOne and Cruises Inc. “They cannot rest, satisfied to ride the wave of excitement that has been created by this generation of ships.”
Wall also said it was important for lines to leverage innovation in ways that go far beyond the ships.
“New hardware is critical, but so is the ongoing development of new, interesting ports of call,” he said, noting that itineraries entice people who want to explore new destinations. Wall said cruising is one of the best ways to see the world, and to do so comfortably and affordably. “As long as the cruise industry continues providing new ways for travelers to do this and new places for them to see, the market will continue to grow,” he said.
Striking a Balance: Michelle Fee, president and CEO, Cruise Planners, says the cruise industry’s biggest challenge is figuring out how to leverage the agents who sell and balance the direct bookings. “No one thinks that cruise lines shouldn’t go direct [at all], but let’s face it, it’s the travel agent community that has driven new customers for years,” she said.
But “when one of your clients gets a call from a cruise line vacation planner, it’s discouraging," Fee said. "And, to [have the client] offered a better deal than you are selling, just isn’t fair.”
Product Confusion: With so many cruise products in the marketplace, "many consumers don't really understand the difference between the different cruise lines, let alone the different ships within a cruise line, as well as what's included and what's not," said Michelle Mangio, owner, Magical Escapes Vacations. Consumer dissatisfaction, including poor product reviews, can occur, according to Mangio.
"Often that is something that could have been prevented if a consumer had picked a line and a ship that matched what they wanted," she stressed. "This is something that travel agents provide and as cruise lines move to [more] direct bookings and cutting out the travel agent, it is something that they are going to have to deal with." Confusion will rise as consumers make a booking with one line instead of with a trained professional who qualifies the customer to sail on the right product, Mangio said.
Too Many Ships: Ralph Iantosca, owner of GoGirl.travel, said, "the biggest challenge I see is there are just so many ships and they keep building and coming. I think the mindset of the consumer does not feel they have to book early because there will always be a ship with a deal and space available since the ships are so large."
That factor helped convince Iantosca to upgrade his entire clientele to booking the smaller ships within the luxury cruise market.
"Since the size of the ships are smaller and the cruise lines have 50% and 60% off with free air, it just made sense to have our clients try these upscale products,” said Iantosca. That helped his agency effectively battle the “waiting” issue. He now tells his clients: “These will sell out much faster with such a discount and incredible value today, you need to book now.”
What do you consider the cruise industry’s biggest challenge for 2011? Tell us what you think based on what’s happening in your travel agency!