RCI’s Bayley Sells Benefits Of Non-Refundable Deposits

CruiseWeek

One of the topics coming up at cruise industry events of late is non-refundable deposits.

A lot of lines tie non-refundables to special promotions, but a few are trying it with longer-range bookings.

One of those is Royal Caribbean International, which is requiring non-refundable deposits for certain staterooms, and has state that the new policy is good for agents because more bookings will stick.

But clearly some agents are not in favor of the new policy, especially on suite bookings. Any time you change commercial terms in this business, there's some resistance, especially since hotels offer 24-48 hours cancel for many clients.

"You can't please everybody," observed David Crooks, Senior VP of World Travel Holdings, when opening a discussion of the topic with Bayley during the recent Cruise One/Dream Vacations/Cruises Inc. conference aboard Harmony of the Seas. "There are a large number of people that like it; then there are some of us that are struggling with it."

Crooks says he understands RCI’s rationale for the change.

"It kind of hits your major goals--which are space loading, bringing down the cancellation rate, getting sticky bookings--and in many ways, that's good for the trade. [Also,] it helps with insurance take-rates, so there are a lot of positive things. But there are also some people that are challenged by it.”

Crooks then asked Bayley: “How is it doing for you?"

Bayley responded: "You articulated very well the major reasons why we think it makes a lot of sense. I really hope that certainly our travel partners are beginning to see the benefit."

He addressed the agents in attendance: "It's not easy. You get the booking; you push it across the finish line. Then in a week or some weeks later, all of a sudden that booking is going away, you've got to get back into the discussion, you've got to rebook or reprice, and that's a lot of work. We think that the non-refundable is a little nudge to get customers to commit."

That, he says, reduces what cruise execs call churn, or attrition rate.  "I know there are some who don't like [the new policy], but I hope you see the benefit. You secure the booking. It's much stickier, you got that booking secure, it gives peace of mind to the customer; they've got their vacation booked. They are sure about what it's going to be. So we think it's a benefit."

Royal, he continues, was projecting "a certain take" on this new policy, and to date they have far exceeded that take. "So we think it's the right way forward. Certainly the reaction we've had has been positive," said Bayley.




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