The full “Cruise Line Executive Panel” included: (left to right) Andy Stuart, Maurice Zarmati, Vicki Freed, Edie Bornstein and John Diulus.
Direct bookings by cruise lines continue to rile agents. So fittingly, the first question by moderator David Crooks, senior vice president of product and operations, World Travel Holdings, to a cruise executive panel at the CruiseOne and Cruises Inc. conference onboard NorwegianEpic focused on direct bookings.
Crooks acknowledged to the audience that direct business [cruise lines selling directly to customers] is a fact of life. So he asked: “But how do we make sure our customers stay with us and book with us?
Fielding the questions were Edie Bornstein of Azamara Club Cruises, John Diulus of Carnival Cruise Lines, Vicki Freed of RoyalCaribbean International, Andy Stuart of Norwegian Cruise Line and Maurice Zarmati of Costa Cruises.
From Royal Caribbean’s perspective, Freed noted that four of five customers who have traveled with her line book with a different travel agent or perhaps even book directly the next time they sail.
Freed says that’s troubling, because skilled agents who are invaluable to the customer can provide the best level of service to bring clients back for more. “We would like all the business we take in to stay with travel partners,” Freed said.
The typical cruiser books another cruise within two years of his or her last one. But as the time lengthens between cruises, “they’re more likely going to cheat [on the original travel agent] and book with somebody else,” Freed stressed.
And, it’s not necessarily because of bad service. Instead, Freed says customers tell the line they just “didn’t feel a connection, didn’t feel engaged” with the original agent. So rather than leaving it to chance that the client will remember that first cruise experience, Freed urged agents to take responsibility for the relationship and keep it going.
Do the little things, she said. Send out personalized note cards to clients. Pick up the phone. Think of email as a tool but not a relationship.
Freed also said the foundation of every successful travel agency is repeat and referral business. While the average guest returns from their cruise bragging about the product or the experiences, Freed believes agents need to get more clients bragging about the agent’s services to others. “There is a disconnect if they lose the connection of making a referral,” she noted.
The “Cruise Line Executive Panel” discussion included comments by, left to right, Andy Stuart of NCL; Maurice Zarmati, Costa Cruises; and Vicki Freed, Royal Caribbean International.
Bornstein said that at the end of the day, keeping clients happy and returning for additional bookings boils down to one element – “one-on-one quality service,”
From Carnival’s perspective, Diulus believes “all of you in the local markets quite frankly do what we can’t do as a company.” He said cruise lines have trouble getting to that local level, but agents can.
Zarmati pointed out that Costa does not have a direct group department. “The way we get this done best is for you to think of yourself as a doctor or a specialist,” he stressed. “You provide valuable counsel.”
He said clients want to buy a vacation from an agent they trust, and because they are sure that agent can do it better than anyone else.
Stuart told agents to put themselves in the client’s shoes – and provided a real-life sales example, based on his recent experience in buying a roof for his home. He interviewed a number of contractors and planned to buy from the roofing contractor who asked questions, listened and didn’t try to bowl him over with a sales pitch.
One specific contractor didn’t listen to anything Stuart said or asked, pushed too hard for an absolute decision on the spot, and simply showed he didn’t care about Stuart’s perspective. “I threw him out,” Stuart quipped.
What makes agents successful? Stuart said the real key to success for an agent is being able to put the client on the right ship. Concurring was Zarmati, who told agents to qualify the client: “You want to do very little talking and you want them to do all the talking [so you learn],” Zarmati said.
Zarmati also got a laugh from the audience when he told them “I started selling cruises with the Nina, the Pinta and the Santa Maria.” Based on his long-time industry experience, he recommended that agents ask the client where they’ve been, how long they go on vacation, and urged them to not ask about budget. He said the agent can ascertain budget by the answers the client provides to other questions. Then the agent should match the cruise to the client.
And Freed stressed that just because an agent has qualified a client in the past, it’s also important to re-qualify that same client for their next trip. “The vacation they take today may be very different than the vacation they take tomorrow,” she said, using an example of a family vacation versus a 25th anniversary celebration.
|Other “Cruise Line Executive Panel” participants included Edie Bornstein, Azamara Club Cruises, and John Diulus, Carnival Cruise Lines.|
The executives stressed the importance for agents to tap into sales tools developed by lines, online training and the services of local business development managers. Freed says she finds that agents are getting the education, using the online tools, and selling effectively.
But “the challenge is growing your circle of friends,” Freed said. “How can you grow your customer base? Most travel agents don’t have a big enough base of customers.”
In terms of qualifying luxury clients, Stuart said there are many fine luxury cruise lines, but “it’s an absolute disaster if you put the wrong luxury customers on the wrong product.” He talked about luxury families with kids, noting that such lines as NCL or Royal Caribbean have high-end luxury suites and big ship entertainment and razzle-dazzle onboard activities and kids’ clubs that families may require. Otherwise, the kids say there’s nothing to do. But, in turn, older adults might prefer a more serene luxury experience on a traditional luxury line.
Bornstein too noted that agents have “one chance to make a great first impression; if you didn’t sell them the right product, you’re not going to get them back.”
Zarmati told the agents: “You know much more than you think. You are the green berets of the industry. Therefore, it is okay to ask for the business and get resistance. When we don’t ask, that’s when we give [the clients] license to go out and shop around.”
Zarmati urged the agents to make their recommendations with confidence and before the customers leave, ask for the business: “You’ll see more bookings guaranteed.”
Carnival will carry approximately four million guests in 2010, and 95 percent of those clients are American. Diulus promoted the benefit of sailings from local home ports as a sales tool. “We sail out of 20 different cruise ports in the U.S.,” he said, noting that “if you want to market to local clients, [they] don’t have to by an airline ticket to get to the destination.”
Similarly, Stuart says “homeland cruising is one of the big drivers for growth and taking the cost down [for potential clients]. He cited the emergence and success of year-round sailings from New York as one recent trend.
He also said that when cruise lines invest in their products the end result can be a new audience for agent marketing and promotion. For example, fans of Blue Man Group might sail simply to follow the entertainment they love – helping the industry being in new clients who typically hadn't thought about cruising in the past.
Executives also urged the CruiseOne and Cruises Inc. agents to compare the value of cruising with land-based vacation products. For a family, “it’s unbelievably expensive to do breakfast, lunch and dinner [in cities like Las Vegas or Orlando],” Stuart said.
Using your data base more effectively is a productive way to bring in more sales, said Diulus, who believes agents must know the best times to engage clients, what time of year they like to travel in, and what experiences they typically enjoy.
Bornstein stressed that “I want volume [for the best return],” and urged agents to follow that approach to help build their commission. She noted that if an agency gets 500 people to sail on one of the line’s 682-passenger ships, the agency could charter that entire ship to the tune of a quarter of a million dollars commission. Think volume, think big, and try to get a group, she emphasized.
“Always wear your name tag everywhere you go, just like a realtor,” said Freed. And every day, she urged agents to give out five to 10 business cards, do more promoting about what you do, and called a certain number of clients. “Make it a discipline, make it a habit,” she said. “Remind people you’re available.”
Zarmati urged agents to understand the lines and what they actually offer in the marketplace. He said “we own Italy, and they [the other lines] visit Italy. We visit the Caribbean and they own the Caribbean.” He told agents they don’t know his brand well enough and to engage them to find out more.
“We don’t want to engage you, we want to marry you, we want to have a family with you,” Zarmati said, eliciting laughter from the agents. “The emphasis is on the brand to ensure you trust us enough to do business with us.”
Crooks asked the executives about their outlook for 2011. Stuart noted that his line’s capacity from Epic’s delivery this past summer has jumped sizably and next year NCL will have a full year of that new capacity.
He also said the industry expects a huge burst of consumer interest and marketplace buzz from the launch of a competitor’s ship, Allure of the Seas, in November. “That’s good for the Royal Caribbean brand but it’s also good for the industry,” Stuart emphasized.
“We’re very bullish about 2011,” said Zarmati. “It’s just a matter of getting the right ‘per diem’ so the owners are happy and you make more commission.” Freed too said the outlook for her line seems positive, as Royal Caribbean is seeing a lot of group business, a lot of multigenerational travelers and people who are increasingly saying, “I deserve a vacation.”
Bornstein says that Azamara’s product does well in comparisons with European boutique hotels, both in perks and pricing. Thus, “we’re very bullish on 2011.”
“We think 2011 is going to be a great year,” says Diulus, noting that a lot of people are looking for value, a plus for agents who sell Carnival. So, he said, it’s an opportunity for agents to suggest clients do longer itineraries or perhaps go to a different destination.
In a question-and-answer session with the executives, Bob Haupt of CruiseOne in Newark, DE, told the executives that some are missing out on the opportunity to educate clients before they sail about the value of a future booking while onboard.
Haupt wants the lines to explain it better upfront. Stuart agreed, noting that there is no better time than selling something when they’re in the middle of having a fantastic time onboard.
Several West Coast agents bemoaned the recent decision by Royal Caribbean to pull service from that region. One said: “you’re killing me on the West Coast. We need some help.” Another asked why lines couldn't develop new West Coast itineraries, perhaps some that went northward, not just to the Mexican Riviera.
Freed reiterated that, unfortunately, between the situation in Mexico, the economy, and the fact that the line did not have enough direct business to supplement good travel agent support, “at the end of the day we couldn’t get the yields for the type of hardware.”
Air pricing was a concern of many agents. David Senita, CruiseOne from Miami, said his firm has been selling a ton of cruises for next year and he wanted to know what the lines were doing to try to keep air tickets affordable. “I agree it’s a concern,” said Stuart. “We’re looking at it very closely.”
Stuart said this year NCL contracted for charters to certain destinations but was then left holding the bag when the airlines added more seats and those weren’t needed. “It’s a fine balance,” Stuart said. “It’s not an easy fix.”
Freed stressed that Royal Caribbean’s Choice Air allows the agent and client to be in control of the timing, airline selected, seat assignments and so on. At times, she said, the line subsidizes some portion of the ticket pricing.
Zarmati urged agents to solve the air issue by booking clients to Europe in winter, when the air and cruise prices may both be lower yet the weather is still pleasant. Winter in the Mediterranean is not winter as it is in New York, he stressed.
Al Richman of CruiseOne in Hollywood, FL, asked Freed about Royal Caribbean’s much-discussed recent policy change – which says that once clients make a final payment, if the pricing is lowered, the client does not get the lower fare. “We all want people to book early,” the exasperated Richman said. “How do we protect people booking early?”
Freed said the line took the stance at the request of its agent advisory board, and in turn lowered pricing for further out sailings so pricing wouldn’t dip down at the end of the selling period. The goal, she said, is to avoid “dialing for dollars” as the cruise nears and to build stability in the marketplace by filling ships.
She said it’s working in many cases, but acknowledged it’s not yet a perfect system. She urged Richman and others with issues to contact her if a problem ensues and perhaps the line can help with a small onboard credit or something else. “We want to work with you so everybody is happy,” she said.
George Kahn from CruiseOne in Monroe, NY, objected to Carnival’s direct pitches to his clients, as did Dana Ceglenski, Cruises Inc., Savannah, MO, who said she was pitched directly by a Carnival employee to buy a cruise and she was the agent of record.
Diulus said the line has controls in place and denied that Carnival pitches any agents or their existing clients. But after failing to immediately quiet the audience, he added that with the millions of pieces of communications going out, there may be some that slip through the cracks. He told the agents who brought up the issue he’d speak to them after the program.
Elizabeth Schultz from CruiseOne of Gainesville, VA, wanted to know what the executives felt was the one unique thing to do on an Alaska cruisetour. “Get inland,” said Freed. “Do Alaska in a much deeper level.”
Perhaps the question-and-answer of the day occurred when an agent from CruiseOne in Boca Raton agent asked the executives a seemingly simple question: “Can you tell us [exactly] what is included in noncommissionable fares?”
Opting for a straightforward and decidedly honest approach, Stuart simply said “no,” bringing a chuckle from the audience. Then he added: “It’s a portion of the fare that’s not commissionable” and is just one portion of a plan of compensation with agency partners.
Total compensation might include back end overrides, co-op dollars and a host of other things and it’s the totality of the relationship that must make sense, he said. But Cheryl Scavron of CruiseOne, Coral Springs, FL, told the executives that the real problem develops when those noncommissionables and taxes are more than the commissionable fare.
Stay tuned for a further update on the CruiseOne and Cruises Inc. “2010 Engage” conference later this week.