Wednesday, May 5, 2010

So You Think There is a Better Deal Out There? Think Twice If You Think "Currency".

I have been having some pretty interesting discussions with various people from the UK regarding the differences in cruise pricing between the US and the UK. I though it might be time to discuss this a bit more in the open.  (Ironically, as I am writing this, a major cruise industry magazine has just released this day a short article on the subject.)

As many of you know I have the ability to sell cruises to people all over the world on many different cruise lines. This can, on occasion, result in questions and conflicts concerning pricing as many cruise lines still operate as if there is no internet or email, with things like prohibitions against agencies in one country booking people in another country so as to protect their various pricing schemes.  This was a hot topic at the Seatrade Cruise Shipping Conference where I raised the issue during a Q&A session with the Luxury Cruise market lines and the contrasts in approach were marked.

Personally, I think that for the vast majority of folks the problems and intricacies of using a non-United States travel agent do not warrant even venturing into the discussion.  Why? Because there are many other factors involved that most simply do not want to, or do not have the stomach for, getting involved with.  And there are risks.  Hence, unless you think you are going to save some serious money, it just can't possibly be worth the effort...though some, at least once, think it is.  (As you will quickly see, it usually is "once".) 

I also note, and preface the following with, this:  The US cruise market is by far the largest in the world and the top travel agents here (such as Goldring Travel, if I might say so) truly understand the business and the cruise product.  And, to be sure, there is something about...SERVICE...that comes to the fore, rather than providing the cheapest price.  (Notice I said "cheapest" not "best value").

I mention service because I am honestly losing count of the number of UK and European cruisers who contact me either before, during or after their cruises asking for guidance or assistance after being frustrated by their UK travel agents.  (Yes, there are some good UK agents, but the "culture" of travel agents in the UK is, for some reason, different.) Some were my clients, who found that when the dollar plummeted in 2008 (no longer the case!), there was a real dollar cost savings by booking an expensive cruise in the UK (under circumstances that allowed it - ex. a UK client).  One client eventually admitted that it didn't matter how much they thought they saved in dollars, because their added costs in upset and abandonment and lack of service, made it so it just wasn't worth it. Another emailed me from their cruise - booked with a UK agent - asking me to assist them because their agent wouldn't.  And the list goes on.  (Of course I assisted every person...but don't think of this as an open invite! :-)

Regardless of some of the pricing restrictions and service issues, there are some other things you had better understand.

For example, UK travel agents charge a pretty much mandatory 10% cancellation fee. So in the event you change your cruise or cancel, unlike when you book with Goldring Travel or many other agencies, you get hit with a substantial penalty...and nothing to show for it. Considering the number of times my clients change cruises or cancel plans, I probably would make a very significant sum...at my clients' expense...just on this little gimmick.

Another thing: Most UK agencies do not guarantee lower prices. One prominent UK agency proudly posts that it will meet or beat any lower price on a cruise you have purchased if you give them the quote from the other travel agency...in writing...oh, yes, and it must be within 48 hours of your booking. Don't get the difference to them within 48 hours: Pay the 10% cancellation fee and move your booking. See how that keeps prices up? On the other hand, as you know, Goldring Travel will do everything possible to obtain that lower price for you, 48 hours or 48 days after you book. Booking for 2011 or 2012? Why bet on prices going up, when you can rest assured that if they go up you are protected and if they go down you are as well.

Want another:  Yesterday, two British based cruise lines, Cunard and P&O have announced the return of the Fuel Supplement (about $3.65 per person per day, converted from Pounds). The reason for this is because the Pound is quite weak at the moment compared to the US Dollar.  Do you think Carnival Corp decided to only apply it to UK based cruise lines was by accident?  Of course not.  The power of the US consumer has forestalled this action at least for now.  Let's see how that trial balloon floats....and it affects UK cruise prices.

Then there is the issue of essentially arbitraging your cruise (betting currency against price). Will the Pound or Euro go up or down compared to the US Dollar?  Why is this important?  Because most cruises are either directly or indirectly priced in US Dollars and then converted to other currencies.  So if you buy a cruise in dollars it is the price, but if you buy it in pounds, it may be based upon a rate in November 2009 or January 2011; dependent on two things:  The date the non-US currency rate was established and the current exchange rate.

Hopefully by now you will see that while looking for a bargain, if it sounds to good to be true, it probably is.  While I always do my best to assure the best pricing, and to adjust pricing if the cruise fare lowers, what I really try to do is educate my clients.

Lesson Number One:  You will probably feel the pain of inferior service and/or the stress of having to pay penalties is if you change your mind, than the satisfaction of possibly saving a few dollars/pounds/euros.