With so many developments, influences and issues affecting the retail side of the business, Cruise Week provides a quick rundown of the latest trends agents need to be on top of:
1. Technology Empowers Consumers
At a recent cruise show, potential customers performed price comparisons with other agencies on their iPads, even during the middle of the sales process. It’s not an entirely welcome trend for agents, although many say it does allow them opportunities to reach out to new customers via the Internet.
2. Caribbean Commissions Remain Weak
While there no doubt will be some improvement in upcoming months, Caribbean pricing is nowhere near where agents would like it to be. Time after time when visiting agents we hear them joke, "We're paying the customer to take the cruises."
The joke may be getting a little stale, but it's not all that far away from the truth. In one case the agent we talked with had just sold a $199 cruise with a $100 onboard credit, with $25 commission.
3. Retail Consolidation Continues
Consolidation in the OTA market is very visible: Not only did Expedia buy Travelocity, but it has since bought Orbitz. This leaves Priceline as its biggest competitor.
What’s happening on the OTA side symbolizes what’s happening with other retail models. As one of many examples, there’s the ever-expanding Direct Travel, with recent purchases including the powerful California-based Peak Valley Travel. More consolidation is on the way and it will likely impact the competitive balance for retail cruise sellers.
4. Brands Tighten Relations With Agencies
A less visible trend is the tightening of relationships between key agent groups and individual cruise brands. The leisure side of the travel business is well-known for being a relationship business, whether it be vendor/retailer or retailer/customer. That some relationships work exceptionally well is not new.
What seems to be changing is the consistency of the top relationships. For instance, Norwegian Cruise Lines just named World Travel Holdings its 2014 Elite Agency of the Year for the 4th time in a row. And Royal Caribbean announced this week that Avoya Travel is its online partner of the year also marking the 4th time Royal has recognized Avoya with a Partner of the Year award.
These awards used to be won by different companies year to year, almost as if the cruise lines were trying to avoid playing favourites. Now the relationships between certain agencies and brands are so tight that this doesn't seem to be necessary.