Cruise Execs Sound Off at CruiseOne and Cruises Inc. Conference

 

CruiseOne and Cruises Inc. conference participants
Andy Stuart, Norwegian Cruise Line; Joni Rein, Carnival Cruise Lines; Dondra Ritzenthaler, Celebrity Cruises; Vicki Freed, Royal Caribbean International; Charlie Dunwoody, Holland America Line; and David Crooks, World Travel Holdings.

 

Fact or fiction? Has the earning opportunity for cruise-selling agents recently decreased? Or, is it increasing? Are cruise lines choosing between shareholder value and travel partner profitability? Those were key issues for a discussion moderated by David Crooks, senior vice president, product and operations, World Travel Holdings, during the recent CruiseOne and Cruises Inc. conference in Orlando. 

“Travel partners are a part of shareholder value,” not competing with it, emphasized Dondra Ritzenthaler, senior vice president of sales, Celebrity Cruises. “It’s fiction, absolutely fiction” that earning opportunities are decreasing, she said, pointing to an 84 percent increase in Celebrity’s capacity with the arrival of five 2,850-passenger Solstice-class ships in the past five years. 

“Each and every time you sell them, you earn commission,” she said, adding that increased capacity brings more robust sales tools—such as co-op advertising funds and back-end compensation—for the sales department to utilize with committed travel partners. “We are a believer in pay for performance,” she noted, so as long as agencies are strategic and increase sales, “we’ll continue to put those financial opportunities on the table.”

“It’s fiction that the opportunity is decreasing,” said Andy Stuart, executive vice president, global sales and passenger services, Norwegian Cruise Line. Norwegian has 30 percent more capacity coming, and, according to Stuart, “the beauty of that capacity is that most of it is in the upper end.” With more suites, balconies and other accommodations to sell at a higher price, agents have higher earning potential. 

Vicki Freed, senior vice president of sales, trade support and service, Royal Caribbean International, said she talks with travel agents on a daily basis and remains excited about the distribution network’s vitality. Many people now becoming agents have come from a business background and that’s very positive. Freed said: “You are now ‘business people in travel,’ versus ‘travel people in business.’ ”

She said that while there’s nothing wrong with people who have grown up in the travel industry, “when people that have had a business background come into this industry, they see it through a very different lens.” Freed also praised home-based sellers who are not afraid to go out and converse with people in their community, noting they have the potential to be “wildly successful.” While agencies have different and highly successful business models, “I believe the group market is where it’s at,” said Freed, urging agents to look at multigenerational families and other groups.

Vicki Freed
Executives used humor and gave good tips: “The group market is where it’s at,” said Vicki Freed.

 

Charlie Dunwoody, senior director, national account sales for Holland America Line, who once worked for a major retail travel network, said he strongly encourages agents to sell groups. In that past work life, he said the most profitable travel agencies had 35 to 40 percent of their business in groups. 

Plan ahead, set up a group cruise and before it sails, contact the future cruise consultant onboard the ship, said Dunwoody. Tell them what you’re planning for next year’s group cruise and enlist that person’s help in selling that future cruise, at a time when clients are still excited about their voyage. “Take advantage of all these things we have to help you sell groups, because when you sell them once, you sell them twice,” Dunwoody said.

Stuart and Rein
Stuart and Rein agree that Europe is more complicated to sell.

Patronize preferred suppliers, be strategic and, most of all, “make it personal,” Ritzenthaler suggested. “You do it better than anyone else.” She hates transaction-based sales with agents making minimal commission and selling on price. “If you really want to own the customer, then you have to own the relationship, make the sale, call before the cruise, call after the cruise and so on,” she stressed. 

Dunwoody called it “very exciting” that 47 percent of CruiseOne franchisees and Cruises Inc.’s affiliated agents are new to the two organizations within the past three years, showing positive growth. “Other parts of the distribution system may not be growing like you are, so that gives you more earning potential,” he said. 

Joni Rein, vice president of worldwide sales, Carnival Cruise Lines, talked about the cruise industry’s evolution and capacity growth. New cruisers are critical, she said: “We must grow the pie. If we don’t have enough cruise rookies, then we’re just sharing the same people.” Crooks said it’s no secret that Carnival is very focused on the bottom line, apparently referring to Carnival’s controversial change in its 2013 commission structure. 

Rein thanked agents for their support, said she believes it’s fiction to say revenue opportunities have decreased, but acknowledged industry pricing challenges have impacted agents. Still, “Carnival is the ‘value’ brand, and you have to accept that,” Rein said, noting that Carnival’s 2013 European voyages on Carnival Legend and Carnival Sunshine (the rebuilt, renovated Carnival Destiny with $155 million in upgrades) offer potential for higher yields. 

Yet, “air transportation to Europe is a killer,” Rein acknowledged. “We’ve all got capacity there, so we have to find a way to maximize the tools…if you can’t find the air, you won’t be able to book the cruise.” She urged agents to become experts on airlift, pricing and everything that goes with the air piece of the puzzle. “Joni is right as Europe is more complicated [to sell],” said Stuart, noting that Norwegian has four ships in Europe next year and airlift is complicated. Norwegian is putting air credits for 2013 travel out earlier than usual so customers can buy early.

Holland America keeps guests onboard longer by not repeating ports on back-to-back itineraries, Dunwoody said, suggesting agents advise clients to reap the rewards of back-to-back sailing discounts and “amortize the cost of the air ticket over a longer vacation.” 

Stuart and Ritzenthaler both stressed that agents must become skilled European advisors. If a potential cruiser says, “Oh, I wouldn’t go to Naples,” a skilled agent might respond that most people cruise to Naples to visit such destinations as ancient Pompeii or breathtaking Positano. “Understanding those facts about Europe is really important,” Stuart said.

Ritzenthaler believes “you can make a whole lot of money in Europe,” and agents should use Choice Air, offered by all Royal Caribbean Cruises Ltd.’s brands. European cruise bookings “stick” 84 percent more than usual if clients purchase Choice Air. “Make a booking and get them on Choice Air…they don’t cancel the bookings as now they’re financially committed with their nonrefundable air,” Ritzenthaler stressed. “You’ve got ’em.” And, if flights are delayed or cancelled and clients miss embarkation, the cruise line will protect the customer by getting them to the next port. 

While Royal Caribbean has trimmed its 2013 European capacity, it will still operate nine ships in the region next summer. Be confident and don’t position the cruise and air as separate components, Freed told the agents: “Say ‘yes, this is a good time to go to Europe when you add in the cruise, which is way too low and the air which is much too high, but together it’s a tremendous value.’ ”

From Stuart’s perspective, “we’ve come through a tough environment and together we’ve weathered it. As we look now, I think we’re starting to see some pricing that is healthy—healthy for you, healthy for us and healthy for the long-term future of the industry.” 

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