Thursday, August 7, 2008

Cruise Vacation Sales Are Strong...For Some

I am being asked more and more if my sales are up or down compared to last year.  This is asked by cruise lines, other travel agents, clients and potential clients.  Frankly, everyone who asks shocked by the answer:  My sales have more than doubled and on the luxury and premium lines my 2009 sales have already surpassed my 2008 sales...more than a quarter of the year left.

While I would like to think that this dramatic increase is based solely upon my providing excellent service and pricing AND extremely loyal clients - for which I am more than grateful, appreciative and, likewise, loyal - I really don't think that is the only reason. 

When I look at what types of cruises are selling, with which lines and with what sort of advanced planning, I see two very distinct trends. 

Those that are purchasing the true luxury cruises (and I define those not only by they type of accommodation, but also the exoticness of the ports and cruise length) are not only continuing to cruise, they are increasing the length and/or frequency of their cruises.  But within that group, I am seeing a bit less of the cruise line loyalty (which previously seemed to be omnipresent) and more of a focus on "value".  What I mean by value is not a cost-per-day figure, but rather "What is the experiential value of the cruise?"; be it visiting new ports, experiencing a new ship or insisting on a certain level of service.

Seabourn is very strong in 2009 as it relates to its new Seabourn Odyssey and its industry topping consistency of service.  There are only two things which seem to limit the Seabourn cruises that I can sell:  Available space and Itineraries.  Both of these factors are being addressed as the three new ships are rolled out and the smaller triplets are able to be sent to more exotic ports.  (Note:  For all of those folks who keep speculating that Seabourn will dump the smaller ships you should remember that:  1.  One thing which has made Seabourn special is that those small ships can and do visit ports that larger ships cannot visit; 2.  There may be demand for an exotic itinerary sufficient to support a 208 passenger ship, but insufficient to support a 450 passenger ship; 3.  There is the attraction for many to the intimacy of a 208 passenger ship and a similar aversion to a 450 passenger ship; and, without limitation, 5.  For most of the year demand outweighs supply and the trend is to an increasing, not decreasing, demand...so eliminating 624 berths doesn't make sense if the trends continue.)

Silversea has also seen a much stronger 2008 over what can only be considered a dismal 2007.  While I continue to marvel at claims of passenger increases of 30+%, I also note that the only way Silversea could have such growth is by sailing half-empty ships in 2007 and that the majority of the passengers are, according to Silversea, first time passengers (54% to be specific).  In a world where the mantra is "It takes $1.00 to keep a customer, but $10.00 to get one, so keep the customer happy in order to sustain growth" I have to wonder why the repeater rate on Silversea is so low.  (Over analyzing this point, possibly the 2005-2207 period caused disgruntled passengers to go elsewhere, so it will take time for the repeater levels to exceed 50% as the product hopefully improves.)  That said, I love their Africa, new French Polynesia and Exploration itineraries and expect very strong sales for those products.

Regent is a line that frustrates me.  I won't repeat my rants, but assuming improvements in hotel, cuisine and overall services continue and are accelerated, I remain baffled by the pricing.  As I recently showed, the new Silversea "ultra-luxury" venture in French Polynesia starts at 28% less expensive than the premium Regent product.  The same holds true for even less exotic cruises to Northern Europe, the Caribbean, etc.  This summer Regent was offering travel agent rates to Northern Europe in the peak month of August.  That is a sign of weak demand...and a real need look hard at the cruise fares.  If those prices come back in line with the product provided, I am confident the demand for Regent will increase.  Without bodies on board, the holy grail of "onboard revenue" can be very illusive.  There really isn't that hard a balance between paying a premium not be "nickeled and dimes" and being perceived as ripping people off so as to avoid same. 

I also want to mention Crystal Cruises here.  While I have not cruised with Crystal, I have never met anyone who has uttered anything but satisfaction to unequivocal praise for the cruise experience it provides.  My guess is that what is now considered a large ship with smaller (but not small) cabins, in a more formal setting, truly focused on older guests, needs to change a bit.  I know Crystal is feeling the pressure, but I have not a clue as to how it plans on meeting the challenge of an overall younger luxury cruising market and a growing demand (even by the older passengers) for a less formal experience.  Ironically, Regent's talk (but no action of yet) of larger ships and the premium/mass market lines growing behemoths, may actually assist Crystal in softening its "large ship" positioning.

Now, as to the premium lines, sales are most definitely weaker, but I am finding that the issue is not the lack of sales, but rather the sales are closer into the actual sail date.  What I do not see is any downgrading.  People who regularly purchase suites are still purchasing suites.  Balconies, balconies, etc.  What I am seeing at least the start of happening, are some aggressive last minute deals (actually 90 days out); which have been pretty much absent the past few years.

More on this soon!