Dondra Ritzenthaler of Celebrity Cruises, Edie Bornstein of Azamara Cruises and Vicki Freed of Royal Caribbean International
Cruise lines are masters of change. While agents clearly like some cruise line policy changes made in 2010, they dislike others. Not surprisingly, "change" was the theme of this year's Cruise Planners annual conference at the Westin Fort Lauderdale Beachfront in south Florida.
Speaking at the annual conference on Friday, Michelle Fee, the organization’s CEO and co-founder, fielded a plethora of questions to a top-level cruise line sales executive panel. Four hundred Cruise Planners franchise owners listened intently as the executives discussed such topics as rebating, itinerary deployment, direct selling and brand positioning.
Participating were Camille Olivere of Norwegian Cruise Line, Lee Robinson of Princess Cruises, Lynn Torrent of Carnival Cruise Lines, Dondra Ritzenthaler of Celebrity Cruises, Edie Bornstein of Azamara Club Cruises and Vicki Freed of Royal Caribbean International.
Grabbing More Newbies
How can agencies market to first timers and those reluctant to cruise? Fee purposely asked that question of Olivere, who has worked within the cruise industry for only two years. “Thinking outside of the box is really important,” Olivere stressed. “A lot of it is about intimidation and not understanding the experience.”
Nearly 36 million people travel to Las Vegas every year, yet only 14 million cruise on all the lines, she said. So, agents might focus on elements of a typical land vacation cherished by particular clients if those are similarly available at sea.
For Las Vegas vacation lovers, Olivere said: “I really think that with the new ships such as the Norwegian Epic and the Las Vegas style entertainment that we have and the branded entertainment [such as Blue Man Group and Cirque Dreams]…it really helps people get their head around what the experience is going to be like.”
Pushing Agents to Automation
Change is inevitable but the fast pace of the change is difficult, at times, for agents to accept, Fee stressed. “There certainly has been a lot of change at Carnival in the last year or two,” Fee noted, asking Torrent for an explanation as to “why.”
Torrent said that as Carnival has looked back at really great companies, it’s identified three beliefs those firms all have. First, they believe in their products. They continue to innovate and invest in their products. Second, they believe in marketing, even in the worst of times. They don’t cut back on marketing. And third, they believe in operating as efficiently as they possibly can.
“Ongoing change is really a key factor in all those beliefs,” said Torrent. “And we share those beliefs at Carnival. Our mission is to provide fun, memorable vacations at a great value. That’s who we are. That’s who we’ve always been. For us to deliver on that brand promise to all of you… we really need to operate very, very efficiently.”
Torrent said the brand realized that to tap into new opportunities it would need to change internally and also change in terms of its agency interactions. So it focused on enhanced travel agent technology. But when Carnival’s team compared the line’s existing agent automated tools to those of other brands, “we were humbled and embarrassed,” Torrent said – noting that Carnival didn’t stack up well with competitors.
So the line invested hundreds of thousands of dollars to make its travel agent automated tools better. But Torrent said the ‘if you build it and they will come’ [approach] definitely does not always work.” Despite training, agents weren’t voluntarily using the tools, so the line revised and upgraded its training – again focusing on the new tools.
But trade usage was still too low, so Carnival modified the policies and forced agents online to make certain transactions via automation. Not surprisingly, Torrent said that use of the new automated tools has skyrocketed.
She acknowledged some agents were happy with the shift, others not. She also said Carnival didn’t do a great job at communicating. “We confused our own team internally and we confused you guys,” she noted.
Torrent said Fee had been quite honest and vocal on behalf of the Cruise Planners agency owners upset about the change. While Torrent said “it stings a bit” to hear criticism, she also said: “We are committed to doing a better job in communicating.”
In addition, “automation in no way replaces relationships,” the Carnival executive stressed. “We want to spend our time with you guys talking about marketing best practices and sharing social media – what’s new, what’s hot.”
But Torrent told the agents that they can expect more change as Carnival looks for ways to be more efficient, particularly for simple transactions, ones that the parties don’t need to converse about.
Re-Branding and New Positioning
Azamara Club Cruises has evolved over the past few years, noted Fee. She asked Bornstein to talk about those changes and the upper premium line’s focus on destination immersion. When Larry Pimentel and his team came aboard, it was already a great product, but just needed some tweaking, Bornstein said.
So Pimentel’s team sailed on the product, talked with guests, read past guest comments, listened to agent feedback, did extensive research and then began to make changes to create the line’s new niche upmarket branding. “Any of the changes we made were not arbitrary,” Bornstein said.
One of the first things she said they did at Azamara was to begin to put together a more inclusive product, not to be confused with all-inclusive, she said. While the line is still in an evolutionary period, Bornstein said it focuses on a club-like aura onboard and a destination immersion experience. She also stressed that English trained butlers are a big service plus for suite guests.
A World of Cabin Categories
How do agents navigate all the pricing and cabin categories to choose the right cruise vacation for clients, particularly when looking at some of the new mega-ships? When talking about the new Allure of the Seas, Freed says the ships definitely deserve the extra money they command – given the onboard features.
“Yes we are more money [with those ships] and yes, you earn more commission… but, at the end of the day, it’s vacation value.” And Freed said it’s not a “me too,” product, as clients won’t find many of the ship’s perks elsewhere at sea.
Freed acknowledged that the new Oasis-class ships have a plethora of cabin categories – 37 in all. That includes three very different types of balcony cabins and six types of suites. She said the guest has no clue of the difference between a Central Park balcony cabin and an oceanview balcony. “Again, this is why we need travel agents,” Freed said. “You have job security.”
She noted that consumers do get confused after going on the website and looking at the brochures. “At the end of the day, they need a value interpreter,” she said. To help agents achieve that role, her line offers such learning tools as the University of Wow, Webinars and assistance from business development managers. Everyone learns differently, she said.
Rebating Isn’t Our Business
Another “change” issue is rebating. Many lines have strong anti-rebating policies. But, Princess Cruises does not. “In regards to the ‘no rebating’ policy, Princess has never had a rebating policy in the 25 years that I’ve been with them,” said Robinson.
“And the rationale is that our CEO has always felt that you are all business owners on your own and we have no right to tell you what to do with the profits which you make,” he said. “It’s your business. You’re going to make the monies that you want to make.”
That said, he noted that Princess wants all agents to sell cruises at the same base price, no matter whether it’s a big, medium or small agency. “You’re all going to pay the same price, but what you turn around and sell to your clients and customers is up to you.”
Does he see that changing in 2011? “No,” he said.
The Great Bathroom Debate
Fee asked Olivere how to handle a discussion with clients and what to say to them about the Epic bathroom experience and whether that new design might be tweaked on the newly announced ship orders the line has made?
The audience giggled as that ship’s unique bathroom design has received both kudos and complaints. Epic’s deluxe balcony cabin configuration includes separate toilet and shower compartments, both with frosted glass but with less privacy than a solid door; a sink outside those compartments and within the cabin’s main living space; and a curtain to pull and hide views of the shower and toilet areas but not the sink area.
“We get as many people who really, really like the set up, as we do people who are a little bit skeptical,” Olivere said, while emphasizing that for Europeans it’s absolutely a non-event. On the Epic’s inaugural she had her three teenage children with her and said all of them could get ready at the same time without any issues with everyone wanting to be in the bathroom.
In addition, at a conference onboard Epic a few weeks ago, she had people came up to her and said “I don’t get it. Why is there such a big concern over the bathroom?” That said, Olivere acknowledged that it’s certainly different.
Still, “there are certain hotels in Las Vegas and like the W Hotel down the street here that have similar bathrooms.” She urged agents to talk to their clients in advance so there is no surprise when the guests come onboard. She did not address the question of the bathroom design for the line’s two new ship orders.
Selling Cruises to Strangers
Fee asked Ritzenthaler how she would sell Celebrity if she were placed in room of strangers and the topic of cruising came up. “First, I’d say ‘you’ve never been on vacation until you’ve been on Celebrity’ because you have very precious vacation time, and you really need to trust that vacation time with our brand,” said Ritzenthaler.
Ritzenthaler then said she’d talk quickly, so the guests could get “back to the party” but would emphasize her line’s beautiful ships, the cruise experience, service, culinary excellence and that a “ship can take you to places hotels can’t because they’re stuck. Now get after it!”
Fee asked Olivere about the genius of NCL’s decision to develop a complex of 128 solo cabins with a common living room on Epic. How should agents use the solo cabin concept to market?
Olivere said those cabins have been a “huge success.” The line positions them as perfect for solo travelers. The word “single” isn’t used as much, she said, as the latter has a perception as being only for young travelers or partiers.
She said research shows that people who are married or in a relationship with someone still may opt to travel alone. Either they can’t coordinate work schedules or they’re just more adventurous than their partners.
In fact, NCL’s research uncovered a pool of 35 million people who would like to travel on their own, but only 2 percent of that group had ever cruised. The main reason? These people view the single supplement – the second fare or a portion of the second fare charged to a single person for occupying a double occupancy cabin – as a penalty, she says.
Definitely, the solo cabin concept is something NCL will have on its next two vessels. “Marketing to the solo traveler is much like marketing to families or couples traveling,” said Olivere. They want to do the same things, want dining choices, want to travel to a lot of exciting places and they want a safe environment.
“These clients are probably in your data base already,” Olivere said. “They sometimes travel with others and sometimes they travel on own.”
More Direct Marketing
“So, we all know that change is good and we all know that change is inevitable, but, and that’s a big but there, change scares us to death,” Fee said. She asked Torrent about her line’s perspective on direct bookings, noting that “there seems to be a great deal of concern that Carnival is mainly interested in taking business directly from consumers.”
From the industry standpoint, Torrent said the “majority of consumers book their cruises through travel agents.” She said it’s important the lines remain differentiated and that agents are invaluable in helping lines stay differentiated in the minds of clients – assuring that cruising does not become a commoditized product.
She also stressed, however, that the industry also needs more demand in the way of new customers.
From Carnival’s individual brand perspective, Torrent emphasized that the line pays more commission to U.S. travel agents than any other line in the world. While she acknowledges that she does hear from her sale team that some agents believe Carnival’s marketing is too aggressive, she said the line also has strict rules about not its employees not violating the relationship between agents and their clients.
She outlined certain steps the line has taken to assure its own rules are followed. When she started working for Carnival, Torrent received 100 email complaints a week from travel agents about aggressive marketing but today, she said she get only two or so a month.
“The point of sharing that with you is that we take it really seriously,” Torrent said. “We have a 24-hour turnaround period, so if we get a complaint, we wrestle it to the ground and we resolve it.”
Adding to the issue is that consumers aren’t always truthful – such as telling the line they don’t have or haven’t used an agent in the past. And Torrent says there have been some automation glitches, which have been fixed.
Lastly, “we have had employees who did not take it [the relationship between agents and clients] seriously,” emphasized Torrent. For the latter, she said Carnival monitored calls of some employees suspected of abuse of the policy. Ultimately, it terminated several.
She was among executives who visited the call center, informed all other employees about those terminations and why they occurred. “Things really changed [after that], and we hated to do that… but we really needed to send a strong message internally,” she stressed.
Finding the Good in Change
What constitutes good change? “Certainly the consumer’s taste and the consumer’s demands have evolved and changed…and I think they will continue to change. In addition to physical hardware and onboard product changes, automation has totally changed the industry, Bornstein said.
“Certainly technology has been a big catalyst for the change, and I think the nice thing is that the Internet has brought about is that you can research all you want, and learn anything and everything at your leisure and your discretion as a consumer and as a valued trade partner,” said Bornstein. “But then, at the end of the day, it doesn’t necessarily have to be booked that way [through automation].”
Bornstein said the industry has seen many cruise lines merge or go out of business. “There will constantly be change and some things are going to work out or not,” she said. But despite the sea of changes, she stressed her company’s continuing support for its travel trade partners.
Final Payment or Else
Robinson was on the hot seat about Princess’ decision to change its final payment date policy. Now, the line is enforcing the final payment date; if it arrives, but the payment isn’t made, the booking is cancelled by the line. So why, asked Fee, is Princess taking such a hard line?
It’s really about deadlines and keeping them, he said, giving the example of a tenant telling a landlord that while the rent is due on the first of the month, it will be paid later in the month, or similarly telling American Express that it will be a few more weeks for payment.
“There is no reason if you have a final payment date that the client shouldn’t be paying by that date,” he said. Some agents raised their hands when Robinson asked the crowd how many were making “late final payments.”
He urged agents to simply give the client a final payment date that is a week earlier than the line’s final payment date: “Then you’ll never have a problem.” Robinson said Princess isn’t trying to punish anyone but as a business it needs to collect when payment is due.
Relish the Destination and Itinerary
In terms of change happening ashore, Bornstein said of guests: “They don’t only want to go to great destinations but they want to go in prime time.” So, if clients are going to Monte Carlo, they want to see the Grand Prix, and she said Azamara will sell them the tickets.
Similarly, Olivere said clients now want to go to port destinations and truly immerse themselves in different cultures. Several executives including Freed and Ritzenthaler said Europe would be a very hot destination for cruisers in 2011. Freed said that while air lift is a challenge, she expects the airlines to release more planes and more seats in the coming year.
Robinson stressed that an Alaska cruisetour is a good way for agents to entice previous Alaska travelers back for a totally different experience. Olivere touted the draw of Hawaii, noting “we have turned the situation around and it will become an even compelling destination for the future.”
Torrent said to keep looking to U.S. home ports as hot tickets, as “Charleston is doing beautifully, Baltimore is doing terrifically as well. And we are always looking [for new home ports].” Freed was asked about the line leaving Los Angeles, and said that despite superior hardware with Mariner of the Seas, they just couldn’t get the yield performance needed. “We hope to be back in the area at some point,” she said.
The Cruiser’s Perspective
“What do you feel the cruiser wants today?” Fee asked the group. Robinson said that from Princess’ perspective, it’s consistency. Princess had seven ships in drydock last year to make the product more consistent across the fleet. Robinson said it’s great to have a hot new feature, but that guests want those perks and features to be available on each and every ship.
Freed talked about the new Allure of the Seas, the innovative hardware and onboard choices her line presents to clients looking for “wow.” Similarly, Ritzenthaler talked about Celebrity’s “Designed for You” positioning, noting that guests can have whatever type of vacation they want onboard – with choice as a big plus on its three Solstice-class ships as well as its other “Solsticized” ships.
Carnival’s guests want fun and good times, said Torrent, but noting that “fun means different things to different people.” Some clients might want to curl up with a good book, others a more active vacation. “All want to relax and have a good time,” but she urged agents to figure out what constitutes fun for that specific guest and put them on the right ship.
Bornstein said that cruisers want value for money, quality customer service, to be served well and, above all, lots of options. Tonight they may want to dine in a specialty dining venue, tomorrow in their cabin, she noted.
Stay tuned over the next few days for Travel Agent’s separate story about the executive views of Michelle Fee and Vicky Garcia of Cruise Planners.