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The Cruise Industry Right Now

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An industry newsletter says the cruise business is reeling from the recent bad economic news. 

Cruise Week, written by veteran cruise reporter Mike Driscoll, is a subscription-only newsletter delivered by email and targeted mostly to travel agents. Driscoll is reporting that the recent bad economic news has hit the cruise industry almost as badly as the sudden economic crisis of 2008 that resulted in the TARP bank bailout.

The newsletter says “Several retailers report they are, in the past month, seeing the most severe dropoff in sales since the September 2008 timeframe. “Having said this, I think travel is still important to people, and there is business to be had,” says one retailer.”

If you have not noticed, the stock market has been tanking relentlessly, due to the failing economy of some countries in the European Union. Some cruise lines, like Royal Caribbean, get more than half of their income from non-dollar currencies.

Also contributing to the economic crisis is our national unemployment statistics which have not gotten better than 9% reported unemployment for over a year.

Cruise Week says cruise lines are currently offering discounts that rival some of the biggest agents have ever seen. One retailer noted there are so many discounts from different lines that they are cancelling each other out. One complaint is the complexity of the offers which may include onboard credit, lower deposits, discounts for second, third or fourth passengers, etc. They refer to it as the “fine print” syndrome.

The only good news is for the cruise consumer – that there are tons of cruise bargains out there right now. Of course, the cruise lines like to sell cruises as far in advance as possible and create incentives for people to book early. But right now we are in “Value Season,” the period between the start of school and the holiday season, when cruises sail with the lowest numbers of cruisers onboard. There should be some very good last minute cruise values out there right now.

In times like this the cruise lines generally hope and expect to fill the empty cabins still on sale for 2012. In bad economic times people book later, not because they are looking for last minute bargains, but because they need to feel confident about their personal “wealth index.” When the job market and the stock market are both suffering most feel they need to hold on to their rainy day fund rather than book a cruise.

A lot of agents in the newsletter blame Washington for not being able to solve the economic crises. Other agents cited the media as the villain, saying that while the economic news is bad the situation has not changed in the last few years and they don’t see the need for the constant drumbeat of “sensationalistic” bad news about the economy.

I personally agree with both accounts, but no matter who is to blame if you are lucky enough to be able to afford a cruise this is a very good time to book one.

Social Media and the Cruise Industry

Cruise Week addressed another area that many in the cruise industry have become involved with recently – social media. When I was at the Seatrade Cruise Industry Conference in 2010 many people were obsessed with Twitter and Facebook. Some of the cruise lines, especially NCL, were so committed to Twitter that they had some of their executives committing up to an hour a day to the site.

Now, some cruise sellers who say they made big financial commitments to social media found it was a big mistake. One tells of a $25,000 investment in a Facebook community for a special cruise which became a complete flop. The vast majority of people who had “friended” the cruise did not book the cruise, and in the end they had to “pull the plug” and cancel the whole thing.

I have personally said for years that social media is NOT the panacea many people believe. One word sums it up, MySpace. I have written editorials where I say that the problem with Twitter and Facebook is the actual identities of your “friends” or “followers.” In most cases they are your competition, or people who work with you but do not buy from you.

But lately I have noticed another very serious problem with social media. You know what happens when two people try to talk at the same time? You cannot understand either one of them. That is Twitter and Facebook. In the media it is called “noise.”  There is absolutely no weight you can give any message no matter how important it is that is going to make it stand out in the mass of shouting and the deluge of self-promotion happening in those sites.

I personally find both Twitter and Facebook to be useless in terms of time management. Even my personal Facebook account is flooded with posts from people who seem to have absolutely nothing else to do all day long. What that tells me is that no matter what I say in a social media site, my message is going to get lost very quickly, and once it is gone no one is going to see it.

I think many retailers saw social media as a way towards “free advertising,” but as another agent says in Cruise Week, “I think [it] is a way to keep your name out there, but it is no way going to make a dent in regular advertising channels.”

You can subscribe to Cruise Week at the web site.

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Comment from Kenneth Eden
Time September 15, 2011 at 8:31 am

I fully agree that now is the time to book a cruise – on the cheap, as it is, for tremendous savings, BUT…..

the BUT is, the quality may not be what the cruise line is noted for, for example, a lesser menus offerings, no lobster, – whatever, steps may have been taken to offer a less than whole product, as what a given cruise line may have offered in the past. Pay as you go is more oppressive for many more ship board pleasures.

Less entertainment, shows shorter, lacking or the cruise may be missing an orchestra – you get the scene?

Cruise lines beware, true cruise affecionados will notice these shortcomings, and will boycott you in the furure, if the cruise product offered is cheapened or lessened, and that will be the price you, the cruise line will pay. Repeater passengers are your base, and there are other cruise line options, “booking Up”, to a better product. Don’t mess with your BASE.

As for high tech social networking, word gets around almost instantly about everything in ones life, and a BAD cruise and of course, a GOOD cruise will get around in the tap of a finger – cruise lines pay attention, a LOT of bad reviews this way come of late.

It is not a coincidence that the really prime cruise lines are still good, and have kept a handle on quality and had to lower pricing to some extent. It seems the bottom feeders are the culprits, offering up the same old lousy product, with ever cheaper – and a cheapening product.

Don’t be scared, this comes around every 10 years or so. The sad part, the now cheap, becomes the expected norm for many cruise lines, and people will pay and put up with it. Pity, isn’t it?

Comment from Paul Motter
Time September 15, 2011 at 9:35 am

Interesting comment Kenneth. I do understand what you are saying.

In fact, it is interesting that when a cruiser comes back from a cruise and posts on the message boards about bad food quality, bad shows or otherwise, they often get shouted down by the cruise cheerleaders.

But if the same thing happened to those experienced cruisers – they would be just as upset.

And I agree with you that during times like this lesser quality becomes the new norm. Unfortunately, the squeeky wheel gets the grease – meaning people are more likely to complain when things go bad than they are likely to give kudos when things get better.

The proof will be in the pudding – when the economy turns around will the cruise lines make cruising better again?

Just a note, however, and if we had Dan Hanrahan here right now I’ll bet you he would say this…

There are some really beautiful ships sailing right now that were designed and built pre-2008 bust. These ships are actually intrinsically better than what this economy deserves, because they were built for use during better times.

While a McDonalds or Wal-Mart can change its entire product to adjust to a new economy almost overnight – cruise lines take years to change. So while things may not be what they used to be, they are probably still a really good deal – considering what you paid.

Comment from Kenneth Eden
Time September 15, 2011 at 10:12 am

Paul, well said, and the pre-2008 ships and even pre-2000 ships, are the true bones of the industry, and ones I rely upon.

Some may argue, the older the better, however, I can not imagine sailing on a “80’s ship, even if I LOVED it then, without a private balcony. Times and tastes, turn to demand, and sadly, the old gals of the sea, do not measure up.

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