Tuesday, November 11, 2008

Use Caution and Common Sense When Booking Your Cruise

Folks, let's face it.  There are a number of travel agency business models that just aren't working in our new economy. 

I found out that last evening that one of the largest online agencies has effectively closed up shop with millions of dollars of debt and a number of cash paying clients (even luxury clients) apparently hung out to dry with no cruise and no money.  What is truly disturbing is that its website is still functioning while its phones ring off the hook unanswered.

Before I go on:  I don't care what any other travel agency tells you, USE A CREDIT CARD NO MATTER WHAT.  If you have an expensive cruise and need to pay in installments, do it.  If you are concerned about "showing" cash, find another solution.  In this environment there are big and small travel agencies really under the gun.  If you use a credit card (not a debit card) you have real protection regardless if there is a problem with the travel agency or the cruise line.  I would also caution that the credit card charge should be directly with the cruise line rather than the travel agency.  Ask.  Don't Assume!

Clearly, travel agencies that depend on high volume/low profit cruises to fund their day-to-day cash flow needs  are really suffering...and struggling.  When an agency is making $50 net on an NCL or Carnival cruise there has to be lot of bookings to keep the lights on.  What has happened, unfortunately, is that many of these lower cost reservations just stopped being made due to loss of job security, home equity and overall fear of what is yet to come.

Part of the reason for the problem is that the retention rate for their clients is less than 20%...because price, not service, is pretty much the singular draw to these agencies.  I call this the "Love 'em and Leave 'em" approach.  So with a low repeat rate and no real way to draw in new clients, these "Love 'em and Leave 'em" agencies are now trying to figure out how to stay in business, but they are for the most part "One Trick Ponies".

Yes there are those individuals that purchase their luxury cruises on Seabourn, Silversea, Regent Seven Seas and Crystal...even Oceania and Azamara...from these discounters.  They are, with only a couple of exceptions, really not getting a lower price and suffer with lesser service and now, to be sure, insecurities.

I know of no legitimate way to quickly take a "sell low cost, heavily discounted, cruises" model and turn it into a working model of a travel agency that creates loyalty and stability through good pricing (while not giving the cruises away) with great customer service. 
So when looking to book your next cruise, or even maintain your present bookings, please be sure to be cautious.  You might just even consider canceling your bookings deposited with cash or having them transferred to an agency you have faith will be there down the road.  Now is the time to be sure you are getting the most for your dollar, not just what seems like the best price. 

Remember, if it seems to good to be true, it probably is.