Expedia CSC’s Eichhorst: “We’re Quite Happy With Wave”
Expedia CruiseShipsCenter president Matthew Eichhorst says Wave season is going well, but the landscape is a little different this year.
"We're quite happy with Wave," Eichhorst tells Cruise Week. "But before when we've had a good Wave, it seems like everybody's doing well. With this Wave, we have some lines doing very well, and then we've got some that didn't adjust the pricing quite as quick as the other suppliers, so they got caught a little bit.”
Two weeks in, he sees the "caught" lines making some pricing adjustments, and because of that, Eichhorst thinks everybody will be doing well before Wave season ends: "But the first couple of weeks, we were surprised with a couple of lines that didn't perform as well as some of the other ones."
Eichhorst says it's not unusual that one or two players are slow to adjust to changing conditions. "There's always someone that gets sort of caught asleep at the wheel. In one case, it was more the way they applied promotions, and the other case, they just let their yields get ahead of themselves."
His point is that when business is good, lines test the upper limits. "I mean that in the positive sense," he says. "We wanted deals to go up for the last 10 years. They're going up, but where is that elasticity? I think some lines are now finding that it's like, 'Oh, we're getting a little bit high,' and so it's kind of how do you keep matching that growing supply with the demand?"
On the retail side, Eichhorst says the challenge for all is customer acquisition costs. "It doesn't matter if you're huge or small, customer acquisition has become so expensive," observes Eichhorst. "So, when I think about our online brands, we're always looking for efficient ways to buy e-traffic."
Like others, Expedia CruiseShipCenters is changing priorities. "If you win on service, that's great," says Eichhorst. "But you can only win on service when you get that person that you can start talking to. So, the acquisition challenge, certainly for the mom and pop, is big. I can leverage our brand to keep driving people to the doorstep, and then it's up to the agent to do amazing work."
As for external forces, headwinds and tailwinds for 2018 Wave Season are frankly different than those in 2016 and 2017.
"I think the last couple years, we were quite specific about the big headwind being global uncertainty," says Eichhorst. "Right now it's just the noise."
Every day it seems there is a troubling story to report and that is grabbing people's attention. The competition just to get people to listen to the cruise message is simply more intense, and it's not from traditional competitors.
"Whether it's on our televisions or on our websites; all the different things that are going on; whether it's politically, whether it's unrest from the Koreas, or just the stuff that's going on around the terrible things like Harvey Weinstein; there's so much noise right now that we have to compete against for just attention in general."
Tailwinds Holding Steady
But there are tailwinds. External to the industry, the stock market is at an all-time high, and the economy keeps chugging along, with wages finally rising. Within the industry, we routinely hear discussions about industry innovations on board ships.
Eichhorst says the new hardware is being exceptionally well received. "The product is better than ever," he says. "We've had innovation for years, but now it's just getting crazy with some of the great ideas and things that they're doing on the ships."
He cited specifically the buzz about new facilities on Norwegian Bliss, and with the full introduction of that ship to trade in numerous ports on both coasts--New York, Miami, Los Angeles, Seattle, etc.--he expects buzz to increase even more as the year progresses.
"Royal Caribbean has amazing new ships, plus with new Celebrity Edge-class, with what Celebrity is doing in the Galapagos, what Norwegian's doing with the Bliss. Carnival's stepping up their game as well with their new ships.
"Plus, the luxury side, which hasn't invested in hardware for years, is adding new ships," he notes. "On top of that, we have a new line coming out with Virgin."