Simply put, last week was a horror for many travel agents -- having to deal with the aftermath of new U.S. regulations that essentially shut down major cruise travel to Cuba. More than 800,000 passengers had been booked on upcoming Cuba voyages that now won't operate.
CLIA, Carnival Corporation, Norwegian Cruise Line Holdings and Royal Caribbean Cruises Ltd. all put out statements about cancellations of Cuba voyages. Some ships already sailing for Havana or other Cuban ports turned around mid-voyage, sailing to a different port of call. Lines changed future itineraries. And agents helped consumers who were pondering options for replacement cruises.
As the week concluded, Travel Agent asked trade sources for comment. How did the week go? How did agents fare? What's their perspective? What was the impact? We received feedback from several sources.
A Challenging Week for Agencies
"The late change of itinerary eliminating Cuba has been deeply disappointing and shocking to have sudden stoppage of all travel to Cuba," says Tom Baker, president, CruiseCenter, a Signature Travel Network agency in Houston, TX, whose company had 144 Cuba bookings impacted. "The cruise lines are as stunned as we are and deeply disappointed to say the least. The cruise lines frankly are doing their best to plan new itineraries and most are allowing cancellations or exceptional compensation offers."
That aside, though, Baker sees a "deep" impact to the lines, erosion of ticket prices in the Caribbean and added capacity in an overcapacity market."
Another insight from Baker? "The older ships which have visited Cuba by CCL, RCL and NCL will have a harder time competing in this market up against each brand's newer tonnage in the same marketplace," he believes. Also, agents now have to stop selling new business, to take re-bookings, re-sell and take cancellations on business not under penalty. "This will have a negative impact in agency revenue as well," says Baker.
While very few of his company's bookings are close in, only a handful are under any type of cancellation penalty. Thus, most of these people will likely cancel, he said, as the clients desired Cuba-centric itineraries. He had 55 passengers alone booked on a July 2020 Virgin Voyages sailing to Cuba.
Baker believes the cruise lines will have a difficult time for the foreseeable future, given the hundreds of thousands of customers impacted. "This is a deep problem for the cruise and travel industry across the board as it is difficult to quickly recover from such a massive change," he emphasized. "I also read that this might push older ships that serviced the Cuba market into the secondhand sale market, and that will create a fire sale mentality to fill lots of currently empty beds, eroding revenues for all of us across the board."
From the perspective of Amber Blecker, senior manager of sales, Dreamlines USA, Fort Lauderdale, FL, here's another take on the past week's Cuba happenings: "Last week's change in policy regarding travel to Cuba, while having been 'announced' a month ago by the U.S. State Department, still came as a surprise in its scope and immediate implementation. Far from it being the punitive measure against the Cuban government due to its support of Venezuela, its impact will be even costlier to American-based companies and consumers."
In fact, Blecker believes "the impact on cruise travel will linger for years, as consumers will be wary to book again even if the restrictions are lifted, and cruise lines will hesitate to again make the investment." She says that at Dreamlines, the Cuba situation dominated the group's work this past week -- with entire days devoted to communicating the various options to clients and making necessary adjustments.
"It has been generous of the cruise lines to protect our commissions, but still there is economic impact at the agent and agency level," said Blecker. "While our travelers have generally been understanding that this change was a political one, and not in either our control or the cruise lines' [control], there has been overwhelming disappointment."
She said the range of compensations offered by the various impacted lines has had mixed reaction as well. While individuals have been more-or-less pleased with one of the options offered by the line on which they were booked, Blecker said that family groups, with the tab often being paid for by one family member, are less satisfied with options that may have included only onboard credit or cancellation rather than a refund to the original credit card.
For some agents who sell more land than cruises, the impact of the Cuba decision wasn't quite as disruptive. For example, Margie Jordan, owner, Jordan Executive Travel Service, Jacksonville, FL, said, "Oddly enough, we weren't impacted as much. My main line of business isn't cruises. It’s land. Thankfully we still have options to send clients [on land]."
She's among the agency owners, though, who reported that clients had lots of questions and some clients expressed "regrets about not taking advantage of the opportunity to cruise [to Cuba] sooner."
As an agency owner with clients who have always been interested in Cuba, "we know that travel there is political," said Jordan. "It seemed that as regulations changed, the opportunity to see Cuba broadened. But this opportunity is -- and always has been -- political. I have clients who think they have to just wait until this President’s term is over and cruises to Cuba will open up again."
She says, "maybe" that could be the case, "but nothing is guaranteed when we’re playing in this arena."
Trade Consortia, Host & Franchise Reaction
“The restrictions imposed this week certainly caused a lot of confusion and chaos for travelers as well as advisors," responds Libbie Rice, co-president of Ensemble Travel Group, who commended cruise partners for their prompt, informative and fair response in communicating and clarifying the changes to agents.
In addition, Rice stresses: "The announcement also underscores the importance of working with a professional travel advisor who can help guide travelers on how it will impact their trip and if they need assistance in rebooking a cruise or finding another way to visit Cuba legally.”
From another perspective, "we are disappointed that the government put travel restrictions to Cuba in place with less than 24-hours’ notice, creating a difficult situation for our customers and our travel partners," said David Crooks, senior vice president of product and operations for World Travel Holdings, parent company of CruiseOne, Dream Vacations and Cruises Inc.
Crooks said his organization's priority right now is "keeping customers informed and helping them adjust their plans so they can still enjoy their vacations."
Alex Sharpe, president and CEO, Signature Travel Network, told Travel Agent that "at this point, we are busily assessing the impact by cruise line. There are about a dozen lines impacted, but at varying degrees. Obviously we have some with Cuba-centric itineraries and others that have a single port of call." Some were for voyages last weekend, others for voyages in 2020.
"Lines have been generous in compensation as they look to retain customers already sold -- especially those on 2019 dates -- which makes a lot of sense," says Sharpe. "Beginning to market a new cruise at this point along with everyone else will not have a positive impact on pricing or acquisition costs."
He reports that Signature advisors are "working hard to inform their guests about the options, which is where we shine, but at the same time servicing (or re-selling) a cruise already deposited or even paid in full will take away from their current sales focus as we were really focused on finishing off what has been a great year." Unfortunately, there is no insurance coverage for changes like this, according to Sharpe, although he does think "the lines are stepping up for consumers."
Travel Agent also heard from Theresa Scalzitti, vice president of sales and marketing for Cruise Planners, an American Express Travel Representative. She reports that the last few days have been very busy for Cruise Planners' travel advisors responding to the news of the travel ban and says her group appreciates how quickly the cruise lines have reacted, too.
"This is a tough situation for the cruise lines, our travel advisors and their clients, and we are thankful for how quickly they have found alternate ports to visit and communicated compensation plans in the form of refunds, onboard credits and future cruise credits and especially to those that have even protected agent’s commissions on cancelled sailings," said Scalzitti.
"We do hope that this restriction will be lifted someday soon so we can continue to send U.S. travelers to visit Cuba," she said. "But we know the travel industry is resilient and are thankful there are so many other beautiful, culturally and historically rich islands and ports to visit and extremely fun and innovative cruise ships to get them there.”