According to the third quarter market trend report from CruiseOne and Cruises Inc., Mexico is bouncing back, consumers are booking mid-sized ships, and there is industry growth on the horizon for 2010. More than 1,000 cruise retail agents were surveyed.
Mexico Bouncing Back from Struggles in Early 2009
When asked to list their three top-selling cruise destinations in Q3 2009:
· 76.4% indicated the Caribbean as their most popular selling destination
· Mexico moved up on the list from Q2, coming in second at 19%
· Third place was split between Alaska, Europe and the Mediterranean
Along the same lines, the survey asked “What is your most requested destination so far for 2010?”
· 57.9% indicated the Caribbean as their most requested cruise destination for 2010
· 11.8% responded with Alaska
· 10.1% responded with Europe
· The rest were divided between The Med, Mexico, South America and Asia
Is Business Picking Up for Agents?
Next, the Q3 survey asked agents to compare cruise bookings versus the same time last year:
· 46.1% indicated that bookings increased slightly or significantly
· 28.1% indicated that bookings decreased slightly or significantly
· The rest of the agents polled indicated that bookings remained flat
Asked to compare cruise prices versus the same time last year, the response was again mixed:
· 58.4% responded that cruise prices decreased slightly or significantly
· 25.3% saw a slight or significant increase in cruise prices
· The remaining 16.3% responded that cruise prices remained flat
Dream, Epic, Oasis Buzz: Does New Ship Hype Equate to Bookings?
Throughout the 3rd Quarter, there has been much buzz surrounding the launch of new ships and mega-ships by the leading cruise lines. Agents were asked if this has driven increased bookings:
· 15.1% indicated a slight or significant increase in bookings on the new ships due out later this year or in 2010 versus the previous two quarters
· 17.3% indicated a slight or significant decrease in bookings on the new ships
· The remaining 67.6% indicated that booking levels have remained flat on the new ships throughout 2009
To understand consumer interest regarding the new ships, the survey asked “Do the majority of your regular cruise customers prefer a family-friendly, mid-sized ship experience; an intimate, smaller-ship experience; or the newest, biggest, most innovative ship experience?”
· 61.2% indicated that their customers prefer a family-friendly cruise experience on a mid-sized ship
· 20.2% responded that their customers seek the newest, biggest, most innovative ship possible
· 18.5% indicated that their regular customers opt for an intimate experience on a smaller ship
Cruise Line Discounting & Non-Commissionable Fees: How Do They Affect Agent Profitability?
A frequently discussed topic throughout 2009 has been cruise line pricing, the launch of new promotions (2-for-1 cruise fares, for example) and the impact of these, combined with non-commissionable fees, on the business of travel agents.
When asked how cruise line price promotions have impacted profitability this year:
· 39.9% indicated this has not impacted their profitability
· 35.4% indicated this has reduced their profitability
· 12.9% indicated that while commissions have been impacted, they have remained profitable
· The remaining agents polled did not respond to this question.
When asked specifically about NCFs and their impact on agents’ overall profitability:
· An overwhelming 83.7% responded that NCFs continue to be an issue and have, over the past three quarters, slightly or significantly reduced their profitability
· 5.6% responded that NCFs have not impacted their profitability
· The remaining agents polled did not respond to this question.
In looking at additional revenue streams for agents, one potential area many have pointed out is shore excursions. The Q3 survey asked, “In your opinion, should shore excursions be commissionable?”
· 86% felt that yes, they should receive a commission for the shore excursions they sell
· 12.9% were undecided
· 1.1% did not feel that they should be paid a commission on shore excursions
Is An Industry Rebound on the Horizon?
Finally, the Q3 survey asked agents whether or not the cruise industry will rebound from the economic challenges of 2009 and if so, when (based on cruise pricing and booking trends)?:
· 34.3% were unclear as to if and when the industry would rebound
· 14.6% estimated an industry rebound by Q3 2010
· 13.5% estimated an industry rebound by Q2 2010
· 12.4% estimated an industry rebound by Q4 2010
· 7.9% estimated an industry rebound by Q1 2010
· 4.5% indicated that in their opinion, the industry (prices, bookings, etc.) has already rebounded
· The rest of those polled did not answer this question.
