As the 2006 Wave Season gets underway, cruise lines are offering specials to consumers and travel agents in order to spur sales in the first months of the year, which is traditionally the busiest time of the year for bookings. In turn, major cruise sellers such as Travelocity, Expedia and the hundreds agents in the Carlson Wagonlit Travel Associates (CWTA) network are proffering attractive lines to people looking to book cruises. Based on how things are going so far, the industry can expect a brisk season, executives and agents told Cruise Industry News (GIN).
Bookings, Pricing Strong
“We’re happy with our performance in Wave Season to-date,” said Mark Kammerer, vice president, cruise, for Expedia, though he noted that the first week of January was slower this year than it was compared to last.
We think it was because of the short week due to the New Year’s holiday,” he said. “It takes a while for the marketing to have its effect, both from the cruise line side and from us. But that’s all happening now. Our call center is quite busy, and so is our Website.” In terms of pricing, Kammerer said Expedia’s cruise partners are expecting yields in the 4 percent to 6 percent range. “And our results are in line with what they’re seeing,” he noted.
According to Roger Block, executive vice president of CWTA, the cruise industry is by and large holding steady with strong pricing, while demand is robust with vigorous bookings. “Obviously the demand is there for all the established North American brands, and that’s the key driver for pricing,” Block said.
As for what sells the fastest. Block said balcony cabins are harder to find as the year wears on. “Our agents tell us verandahs and balconies are booking further and further out to the top destinations, especially because they are a limited commodity,” Block said. “Once you get a customer to book a balcony, they just won’t go back to an outside cabin.”
Block said agents in the CWTA network, which are offering passengers savings and incentives if they reserve a cruise in the month of January, are seeing bookings increases of about 5 percent to 10 percent so far this year compared to the same period last year, though he wouldn’t give a specific number. “Then the dollar figures are obviously more than that,” he said.
Jason Sheets, director of cruise for Travelocity, which has just kicked off its seventh annual Cruise Super Sale – which offers dollars-off savings, free upgrades and shore excursions – is on the same page as CWTA’s Block as it relates to growth in bookings.
“We’ve seen double-digit growth for the first 10 days of the year as compared to last year,” he said, adding that the end of 2005 was also robust. “Pricing is relatively the same as last year. There might be some pockets (of lower prices), but we definitely aren’t seeing the $399 and $299 deals that we saw from last year.
Where and When
So where are all these cruisers going? Europe, the Mediterranean and Alaska cruises continue to be hot tickets in the summer, while winter cruises to the Caribbean – where the high season is in full swing – continue to be the mainstay, agents told CIN.
According to Travelocity’s Sheets, some Europe and Alaska dates in the summer are close to being sold out, while CWTA’s Block noted that Europe and Alaska sell out fast because there’s limited capacity.
“What we’re seeing is higher demand and lower supply in those areas,” Block said.
“Our cruise partners are trying to figure out how to get their ships into places where they can make more money out of every sailing day,” said Expedia’s Kammerer. “We’re seeing more dedication to Europe and Alaska and you see people trying to seasonally extend their position away from the Caribbean.”
Kammerer also predicted an increase in Canada/New England sailings.
Gary Stevens, director of the leisure division for corporate travel agency Ultramar Travel Management, said he’s finding it more difficult to get good Alaska space later in the year, which is a testament to that destination’s popularity – and short season. “It used to be very easy only a few years ago,” Stevens said. Another destination that is ramping up in popularity, Stevens said, is South America, especially on the luxury side.
Barry Jaffe, a travel agent at Cruise Connection in Coral Springs, Florida, agrees that South America’s popularity will continue to grow. “It’s a wonderful destination for people who are interested in taking longer luxury cruises,” Jaffe said.
Mexico will likely lose footing in 2006 in the wake of last year’s Hurricane Wilma, which devastated parts of the country’s Yucatan Peninsula, said Jaffe.
“People are staying away from Mexico,” Jaffe said. “The ports aren’t even really ready for tourists yet. I’d agree that there is an upswing in demand for Europe
and Med cruises.”
And then there’s Hawaii, which is dominated by NCL America, which got off to a rocky start at its launch but has recently enjoyed positive passenger reaction, said Stevens at Ultramar.
“Hawaii is very popular despite people in some cases having to travel pretty far to get there,” Stevens said.
Having said that, homeports across the United States are enjoying a strong foothold, said CWTA’s Block.
“The convenience for the consumer to drive an hour or less to depart on a cruise is bearing that out, even for winter cruises,” Block said. “From the consumer’s perspective and experience, i f you don’t have to go to the airport, there’s a lot less to worry about, regarding baggage and so on.”
Homeports also attract first-time cruisers to “starter” destinations like the Caribbean, Block said. “The vast majority will still take their first cruise in the Caribbean,” he noted. “The price point is much lower, but we also find that after three, four or five times in the Caribbean, people don’t want to go there – though the region will always have a huge allure if only for people trying to escape the cold in the winter.”
Longer Cruises Gaining in Popularity
Another trend agents are seeing is a move toward longer cruises.
“The law of averages for capacity state that you’re going to see a natmal progression toward longer cruises,” said Travelocity’s Sheets. “Nobody’s walked away from the three-day market yet, but there are simply more ships to do more things with.”
On the luxury side, there is a steady increase in the world cruise market. Sheets said, noting that passengers are already starting to book world-cruise
segments for 2007.
Expedia’s Kammerer agrees with Sheets. “The five- to nine-day rotation and 14-day cruises are attracting bigger interest,” he said. “That’s a change that is reflecting increased capacity and offering varying lengths to meet overall households’ planning capabilities.”
For Block, 20-days-and-longer itineraries are generating a lot of interest on lines such as Holland America Line, he said. “Also seven- to 10-day
cruises are gaining,” he added.
But for corporate planner Stevens at Ultramar, shorter cruises will always have an allure i f only because those timeframes work better for companies or executives booking meetings at sea or corporate retreats, he said.
And certain destinations will always command longer itineraries for the bulk of their offerings if only because of their location, such as the Baltic, said Sheets – though that means you’re not likely to see 100 percent growth there anytime soon.
“If you’re using the Baltic as an example, most people doing that trip will be on a longer cruise just because of how long it takes to get there from, say, Dover or Copenhagen,” he said.
For CWTA’s Block, the cultural opportunities alone in the Baltic mean that shorter cruises wouldn’t work as well. “It’s too overpowering to try to do it in
short jaunts,” he said.
Even so, CWTA is offering a Wave Season lure to potential travelers who might want to take a seven-day Baltic Cruise; passengers can spend a week in the region from $4,396 per person on Radisson Seven Seas Cruise with free economy air (or $1,000 in savings off the ticket price). They will also get a $100 shipboard credit on certain Navigator sailings.
Agents’ Incentives
As for what incentives the cruise lines themselves are offering to agents, Norwegian Cruise Line has rolled out its eighth annual Sale of All Sails promotion through Feb. 28, awarding prizes to agents in a booking contest – with a dedicated Website where agents can find out details of the program and get sales facts from the line’s sales executives.
The line is offering prizes every day in January and February, including breakfast, lunch and coffee for the entire office, NCL-branded merchandise, steak dinners and Hawaii and Mediterranean cruises for two. Winners, who to be eligible must book a deposit on a specified product on a given day, will be selected randomly.
To help agents sell, NCL is offering consumers up to four category upgrades, a guaranteed two-category upgrade on all Pride of Hawaii sailings, a $50 shipboard credit and onboard savings when a cruise is booked in full with a MasterCard.
Holland America is offering, through Feb. 28 in its View and Verandah promotion, a chance for agents to win a $20,000 Signature of Excellence Home Makeover – which will include features from Holland America’s upgrades program. Additional weekly drawings will feature SOE products such as flat-screen televisions and laptops – while agents can win fam trips to Alaska and housekeeping service at home for half a year. Consumers booking through the promotion will receive an outside stateroom for the price of an inside, or a verandah for the price of an outside – with upgrades from one to seven categories.
“We’ve really gotten into the multi-vendor type promotion, where no matter what the customer wants, we have top to bottom savings,” said CWTA’s Block.
Expedia’s promotional period, called Expedia Cruise Days, offers tailored specials for each cruise line it sells, Kammerer said. For Crystal Cruises, for example, Expedia is offering customers fare savings and a $600 shipboard credit, while at Carnival Cruise Lines it’s a free MP3 player.
