Exec Panel: What the 2020 Elections Mean for Cruise Travel

At the 2019 National Conference for Dream Vacations, CruiseOne and Cruises Inc., top cruise sales executives participated in a panel discussion moderated by David Crooks of World Travel Holdings. L to R are: Crooks, Michelle Sutter of Holland America Line, Camille Olivere of Norwegian Cruise Line, Vicki Freed of Royal Caribbean International, Janet Wygert of Carnival Cruise Line, Elena Rodriguez of Princess Cruises and Lori Sheller of MSC Cruises USA.

If history is any measure, election years can create jitters, no matter who's winning in the polls or what party has the upper hand. Often consumers become more skittish about booking that dream cruise vacation.

On top of that, so much election advertising typically drives up the price of advertising, so many travel companies are not as visible as in a normal year. So, what do advisors do to protect their business in 2020 and keep the cruise bookings flowing?

That question was among topics addressed by a high level cruise sales executive panel on Sunday at the 2019 National Conference of Dream Vacations, CruiseOne and Cruises Inc. Themed around "Dare," the conference unfolds all week on Royal Caribbean International's Symphony of the Seas

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More than 1,000 travel advisors gathered in the ship's Royal Theater to listen to this discussion, moderated by David Crooks, senior vice president of product and operations for parent company, World Travel Holdings.

Base Loading for an Election Year

The good news is that the economy today is strong, with many corporations reporting strong earnings, noted Camille Olivere, senior vice president of sales, Norwegian Cruise Line. Still, "we know that election years are always bumpy and I think this one is going to be bumpier than ever," Olivere told the audience.

Her advice is to "get as much business on the books as early as possible going into next year." She believes consumers could "freeze up, at times," and simply not book.

Starting now to put 2020 business on the books is advantageous, Olivere suggested, reminding advisors that people booking farther out get reduced deposits, helping create new bookings.

Plus, Olivere said that "affinity groups are a lot stickier," so look for those, she told the audience. Just starting early can help advisors have a much better year than they normally might have in an election year. 

Vicki Freed, senior vice president of sales, trade support and service, Royal Caribbean International, says "we are focused on 2020 and when you think about your own business, catch 'the Wave'" (meaning be very proactive and assertive during Wave Season) "because after that it could get very noisy." 

People see what's happening ... and become edgy about things, at times. Freed said: "They do freeze and don’t buy in such a robust way." That said, she also pointed to the low penetration rate -- 5 percent or so -- of cruising versus other types of vacations, so she explained that there is plenty of opportunity, too.

From Royal Caribbean's perspective, she urged advisors to look at itineraries with Perfect Day at CocoCay, as that will drive higher yields, now that the line has put newly updated hardware on its short cruise products there. "We hope you'll take advantage of that," Freed said. 

Michelle Sutter, director of sales, strategic accounts, Holland America Line, noted that "one prediction is that 2020 will be full of distractions, so that opens the door for opportunities for all of you to build [vacation itineraries to allow clients] to escape those distractions. I would capitalize on that."

"There's no question that 2020 is going to be noisy, disruptive and kind of crazy," noted Elena Rodriguez, director of sales, national accounts, charters and incentives, Princess Cruises.  But she says that if people focus on the sky is falling, they won't do other things.

"I am here to tell you the sky is not falling," she said. "If you keep your head about you and focus on the things you do, the formula of what you do, what makes your customers come to you, then this [coming] year is going to be a great year for you."

Rodriguez urged agents to continue to provide a value for the client's vacation -- putting them on the right ship, the right choice, the right destination. "If so, you're going to have a successful year," she said. "You put in what you’re going to get out." 

From World Travel Holdings' perspective, Crooks said that in the past few weeks, his company's team has been working to take advantage of the high consumer confidence level right now, as consumers are in a buying mood.

He told the agents that the best rates are happening now, and urged the advisors to do "base loading" now in getting the business on the books. 

As election advertising ramps up in 2020, advertising also is going to get a lot more expensive, Crooks said. People will see far fewer cruise line commercials. So, "try to capitalize on the great cruise line commercials" out there now, Crooks stressed. "It's a great time to take advantage." 

Differentiating the Lines

When asked by Crooks what one product differentiation or agent tool sets each of the panelists' lines apart from the competition, Freed, who manages the largest sales force in the cruise industry, noted that all lines have amazing products.

For Royal Caribbean, she cited "that unique quality that marries energy and experience." She said that means a quality experience first and then energy spread between entertainment and activities.

Janet Wygert, vice president, strategic partnerships at Carnival Cruise Line said naming a differentiator is easy for her brand -- "without a doubt that is fun." The "fun" branding is at the heart of everything the line does, all its marketing programs and the cornerstone of its onboard experience.

"Fun means different things to different people," she added. Wygert also pointed to the line's Chief Fun Officer in Shaquille O'Neal, emphasizing that "Shaquille embodies what we believe fun is all about," she said.

Princess' Rodriguez said that her line's differentiator is "Medallion Class Vacations," as "one of the most precious things your customer gives us is their time." She said the new technology-based Medallion program reduces friction points to vacationing and traveling and will be on all Princess ships by spring 2021.

Lori Sheller, senior vice president, strategic accounts for the U.S., MSC Cruises, talked about the rebranding campaign her line is now working on -- focusing on embracing its European roots.

She also stressed that the line pays commission on everything agents book in advance, such as spa treatments, drink packages and shore excursions.

Olivere said Norwegian Cruise Line has a unique model of three business development managers (who were present in the audience) who exclusively handle inquiries and provide support for Dream Vacations, CruiseOne and Cruises Inc. advisors.

"They're 100 percent dedicated [to the trio of brands] and it works really well," said Olivere. "It’s really been a great model."

Olivere talked about Norwegian's just-relaunched affinity group program, which has a price guarantee through the end of March. She also said the line is struggling a bit with new Asia itineraries on Norwegian Spirit, sourced from North America and not Asia. There's an added incentive on those itineraries. 

Crooks noted that Alaska capacity will rise 7 percent in 2020. One differentiator for Holland America in Alaska, according to Sutter, is that it's the only line that takes guests to the Yukon Territory when they book an Alaska land and sea journey.

"It's the highest guests satisfaction rating of all -- with the exception of the World Voyage," she said. 

Many panelists took the opportunity to discuss their new ships, such as Carnival's Mardi Gras, Sky Princess and others. 

Sheller talked about MSC having four ships in the Caribbean this winter season (without Cuba as a port call option) and said the potential is there for a good year but "I do think it's going to be challenging."

That said, she also talked about the consumer draw of Ocean Cay MSC Marine Reserve in the Bahamas, the line's new private island experience. The line has removed 7,500 tons of industrial waste in and around the island, a former industrial salt mining island that's now amid a 64-square-mile eco-preserve.

The line has a coral nursery and is planting a coral reef, and cruise guests who visit can see that nursery and also help plant a coral. "The fish are coming back, it's a total restoration," said Sheller. "Everything on the island is solar-powered."

Fare Discussion

Crooks and others talked briefly about nonrefundable cruise fares -- helpful in the upcoming election year as then clients are locked into those and essentially will be traveling. Those bookings stick, as do affinity group bookings, too. 

He also talked about the industry's current value-add rather than discounting policy, and said his company appreciates that. Still, promotions based on price do still exist, and Crooks would like to see less of that and even more value-adds to replace that moving forward. He asked the executives how to help consumers navigate through the options. 

Freed acknowledged that consumer confusion exists and said that the client really does need a travel advisor to help them navigate through all the options and to "make the right value decision."

Freed also talked about the bidding system Royal Caribbean has for upgrades, and "while less than 1 percent of the people bidding actually do get something better," that has allowed the line not to discount the top suites in the open marketplace.

Olivere said that Norwegian has an upgrade program as well, but the actual price action is typically on inside, lower level categories. "We market to fill...and solve problems through marketing," she noted, so it's just filling holes here and there.

Wygert said that at Carnival, "Early Saver," is king. It's the lowest price outside of final payment with 20 percent off select fares and includes a nonrefundable deposit, sometimes up to 50 percent off that deposit. 

Typically, she said, inside the final payment period, the types of promotions the line does offer tend to be senior or resident programs, or upgrade programs but those are a flat rate not a bidding process. 

Other Tidbits

Crooks talked about capacity increases -- 7 percent this year and the same amount in 2020. 

Serving 5.4 million guests this year, Carnival has significant capacity increases coming, said Wygert, and noted that the Carnival Panorama will be the first new ship on the West Coast in a decade; the line has sailings from San Diego, and San Francisco is a new home port. 

With the 10 percent capacity increase on the West Coast, the line is expecting a great 2020. In addition, Sheller also said: "We've recommitted to Mobile (AL) and we're sending a fourth ship to Texas," she said, also stressing that Carnival is investing in ports."

Crooks reported that the northeastern U.S. was getting a huge 22 percent capacity increase this year, and the Caribbean had a 34 percent increase this year. 

Sheller focused on the Caribbean, and said that MSC Cruises has moved its MSC Armonia to a new home port in Tampa for 2020, and that the line is paying 20 percent commission.

"You will find our ships going to other ports in the U.S. [too]," said Sheller, noting also that "we are seeing a tremendous amount of Americans going overseas."

In addition to Sky Princess, just introduced in Europe, Princess is adding Enchanted Princess to the fleet next summer. "We're focused on lot of different initiatives," Rodriguez said, including "how will we motivate and educate non-cruisers to cruise." She said the line was counting on advisors to help in that regard.

Rodriguez also said one of the best ways to get more people to book is to ask current clients to refer their families and friends. "If you're not asking, it's a tool or tip to put in your tool box."

She also said the line has a new pricing strategy that will make it easier for advisors to understand the promotions and value-adds.

In reference to her motivational/tips talk earlier in the day, "you can increase the size of your candybox as big as you want," said Freed, who noted that capacity growth was just scratching the surface of potential for the industry and, "at the end of the day, cruising is the better vacation.""

Crooks also brought up the potential for more revenue from casino programs on ships and encouraged the lines to give agents the opportunity to earn full credit. Some lines do have programs that provide benefits for advisors. 

And Olivere, briefly addressing the leadership change at Norwegian, said the commitment is there for travel partners and that her new boss [new CEO Harry Sommer], who she described as "an action Jackson CEO" was emailing her onboard about making progress on enhancements to that casino program for travel partners.

Stay tuned for more coverage from the Dream Vacations, CruiseOne and Cruises Inc. conference this week. 

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