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Is Cruise Value a Negative Factor?

Written by: Paul Motter

Is the fact that cruising is a top vacation value now a negative factor?

Throughout the history of CruiseMates we have encouraged people to use travel agents to book their cruises, and we still say this is the best way to go. But a recent series of cruise world events has made it harder for the cruise lines to compete with other vacation options – especially those that pay higher commissions to travel agents.
And the cruise lines are not the only ones suffering with this situation, the cruise customer is also losing out considerably.

A recent report from CruiseWeek, a cruise industry newsletter, points out that travel agent commissions for typical “ocean cruises” these days can’t compete with all-inclusive land vacations or river cruises which include the cost of drinks and shore experiences in the basic price. Those all-inclusive vacations result in higher commissions and more profit for travel agents.

In fact, in addition to the fact that cruises are just plain cheap these days, the people who are really looking for value get still get the best deal on a cruise where additional (non-inclusive) spending is far more discretionary. This works to the advantage of the customer, but to the disadvantage of the travel agent who now has more incentive to steer you away from cruises and towards higher commission vacations.

What Has Changed?

In the past travel agents were more than happy to book a cheap first-time cruise, because the satisfaction rate on cruises was so high that the customer would always come back to buy a more expensive cruise. But the number of first-time cruisers that fit this description has all but disappeared. Mostly due to the spate of truly biased and unfair media coverage – not to mention the disdain of certain government figures who (in my opinion) went way too far in painting the cruise industry as some sort of clandestine business.

What Do The Travel Agents Say?

Selling cruises has always been complicated because it takes a long time to communicate everything a cruise novice needs to know. It is a lot easier for a travel agent to explain a river cruise to a customer – where there is a singular shore tour included every day and beverages are included with meals – than it is to explain an ocean cruise where there are drink packages, tour packages, alternative dining venues, optional shore excursions, serenity areas (at a price) and more – none of which add to the agent’s commission.

Making the sale of cruises even more complicated is the fact that there are so many different cruise ships in the market that vary to a large degree. Just looking at the newest ships by the various cruise lines it is almost impossible to ignore the differences between Allure of the Seas, Carnival Breeze, Royal Princess, MSC Divina, Norwegian Breakaway and Disney Dream.

It could take hours to sell a single cruise on one of these ships to someone who is not sure of what he wants. Add in these recent cruise trends: more three to five-day cruises and larger ships that sell at a lower price point per cruiser, and the average price for a cruise is now as low as $399. At a commission of 15%, with many parts of that price being “non commissionable,” the average travel agent commission for cruise could be a mere $40 – “gross,” from which he has to deduct the cost of doing business.

This is why websites like CruiseMates are so important – we are here to educate people on the topic of cruising before they contact the travel agent. We know how complicated the cruise learning process can be, and our goal is to work in tandem with the cruise lines to take all of their information and to present it in a comparative manner so people can make informed decisions. We save time for travel agents and we deliver far more informed consumers to the cruise lines. We instill a confidence in the cruise buyer that they cannot get anywhere else.

What Does this Mean to the Consumer?

Cruising still presents the best vacation value in the world. Yes, the industry has seen a few “setbacks” in what was once an unbelievably good safety record for decades, but cruising is still far safer than highway or air travel, and more convenient, too. Travel agents know this – but many of them are now trying to steer cruise buyers away from ocean cruises.

Do not let that happen! Cruises are better values now than they have ever been. In fact, the average price of a cruise has hardly risen at all in the last 20 years. Plus, you have far more discretionary spending power during the cruise than you have with all-inclusive vacations.

What Should the Cruise Industry Do?

The cruise lines have acknowledged that travel agents have been disenfranchised by lower commissions, and they are working on fixing that problem, but another issue that has not been addressed is the disenfranchised media after bad choices in public relations, especially in the face of potentially embarrassing incidents. Winning back travel agents is a process that is underway – but the cruise lines also need to re-establish good relations with the media, including web sites like CruiseMates.

When it comes to media relations many cruise lines are hiding from the light. The only journalists invited on press trips now have high numbers of twitter followers but no web site traffic and no real sway with serious adult readers and cruise buyers, such as the kind of people that would come to CruiseMates. I see press trips where every journalist onboard is only there to tweet, but not to write a hard news story about the cruise experience.

When a cruise line only invites “tweeters” that they will know will gush about the experience, especially over Twitter, they are only “preaching to the choir.” There is not enough targeting the reporters who have the respect of discriminating consumers who want hard and accurate information and may become a first-time cruiser. How do I know this is true? The proof is in the significant decline in first-time cruisers.

Why the Impartial Media is So Important

The cruise media works as an impartial but trustworthy third party who can honestly discuss the real benefits and drawbacks of each cruise line to with consumers. Potential first-time cruisers really need to know the differences between the major cruise lines so they can find the ships that offer the cruise experience that they want. Ultimately, you (cruise lines) want the customers who want what you have to offer. It is sites like CruiseMates that create the desire for your product in the minds of first-time cruisers before they walk into a travel agent or visit your web site.

It is far harder to convert a first-time buyer than it is sell a cruise to a fan, but when you consider the extent that the cruise product has expanded in the last five years, the industry simply cannot survive without new blood. Today’s cruise consumers have instant access to information, but most people seriously considering a first cruise will not look to average people who post in Facebook or Twitter. They will look for professional, impartial reviews written by experts.

We are still vital to this industry, and we intend to stay that way – despite the the winds of change that seem to be blowing much harder than we ever expected.

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Comments

Comment from Kenneth Eden
Time November 17, 2013 at 5:25 am

Cruise value – it is all in the price? Maybe not. Anything new? No.

Cheap cruise rates are always the same, and have been the same for many years.

One MAJOR cruise line has always offered a truly cheap rate, and has since the early 1980′s, of around $245.00 per person, basic cabin rate, maybe it is a guaranteed rate, I have no idea, since this is most always for a 3 or 4 day cruise – AND depending upon the cruise, this cheap rate often included free round trip air and transfers. These cheap rates are back, maybe lower without air, who knows. How about a 7 day European cruise starting at $499.00 per person, on a decent cruise line?

One way to appreciate a cheap cruise deal is to be a repeater to any cruise line and reap the benefits of the repeaters price. These deals come in the form of e-mails, and snail mail, and any registered tech device the past passenger supplies to the cruise line.

Perhaps the most important one, as Paul points out, USE A TRAVEL AGENT, one that specializes in cruises, a real, genuine bona fide one, not just some anonymous agent on line that may give a $50.00 on board credit, or tell you the advertised cruise at the rate you want is no longer available, get it – use a real agent in a cruise specialty agency, with a real office, with pretty brochures. These agents will work with the cruise line on your behalf for bester and better price, credits, discounts air allowances and so forth.

Do these appeal to me? No, not interested in 3/4 day cruises, and would not fly to Europe for a shorty cruise, even with low add on or free air. Jet lag in a hotel pre- cruise not my thing either.

Lets now look at the real problem in todays cruise market.

GLUT – over saturated product, too many brand new ships, too many berths to fill, not to mention older ships that also need to be filled, filled, regardless of price, regardless of cruise line reputation for good or bad cruise product.

Recently I received word from a very nice cruise line that there are some cruise’s, mind you, sailing dates within 90 days, of the e-mail, $199.00 basic per person, no air.
These were shorty cruises, 5 nights. Still, good deal, AND for repeaters.

Comment from Kenneth Eden
Time November 22, 2013 at 5:34 am

One small and yet major point on “value” be it negative or not when compared to a cruise.

The ALL INCLUSIVE RESORT

They have been around for some time, back in the 1980′s in the Caribbean the St. Lucia resort, LA TOC, owned by Cunard Line, was the tops in luxury, so exclusive an all inclusive, not even the QE2 could match the finest amenities offered there, and SANDY LANE in Barbados, so exclusive, and there were others, mainly under the radar unless one knew of them. One we enjoyed in Barbados was HAYWARDS, long gone, sold, renamed.

Then were others to be sure, then came along SANDAL’S, which we love, and even more have joined this once exclusive rank of resort.

The cruise lines and these resorts must compete with each other. Once Club-Med was tops, we never cared for it, and like cruise lines, some have gone bye by or been remade.

These resorts are also hungry for business, and just like the cruise lines, the rates have been cut, just look at TV ads, if available in your market, and compare, compare wisely, to see exactly what you are getting.

Just like the cruise lines, these resorts offer booking by travel agents. Disney Vacations, they also offer booking by travel agent for their wonderful theme park vacations.

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