Cruise Pricing Revolution Is Positively Impacting Retail

Cruise Week

Heading into the final lap of 2015, retailers report the average cabin price is up, but not up so 
much that cruise lines are over-pricing the product and radically lowering pricing close-in.

“They seem to be pricing more intelligently,” said one retailer of cruise lines." He, like others, said the more important message is that long-term there’s a pricing revolution going on that is positively impacting the retail cruise business.
When Cruise Week has asked agents of late, “How’s your cruise business?” more often than not they responded by pointing to the positive effect of changes in commission structures by key lines in the contemporary/premium market.
Agent after agent indicated that big ship cruising is growing in their portfolio because of Celebrity, Royal and Norwegian essentially raising commissions through value-adds.
One agent’s comments is representative: “I think suppliers have heard us. Norwegian, Royal Caribbean, Celebrity responded by saying, 'We have to raise our price points.’”
He applauds the end results, saying both supplier and agent benefit. “I had kind of stepped away from focusing on mass market, focusing more on luxury instead. These changes are making us go back and reinvest our time more in marketing those [mainstream] products. It still doesn’t compare to selling a Seabourn, but it’s a welcome trend.”
The agent says the point needs to be heard: “I don’t know if enough agents are waving that 
flag and saying 'Thank you - we’re glad that this is going on.’”

Another agent says value-adds are key to getting pax on the books early. “People are understanding now that if they book early they get a good value. The message is out there and business has been steady. So no complaints. The right people are booking.
"The cruise lines have become far more promotion-minded early," she says. "They want 
the body on the ship. All the new promotions that have come out are simple, the price points 
are working."

Alex Sharpe President & CEO of massive cruise-seller Signature Travel Network, loves the changes taking place in the middle market that began with Celebrity’s 1,2,3 Go and have expanded ever since. “What I love about this [trend] is that contemporary and premium cruise lines are doing what luxury lines have been doing before which is 'If we can value-add vs. deal on price, our partners are going to earn more.’”
That, he says, has become more of the culture than the exception. End result: “People are seeing that there are some wonderful earning opportunities in the middle, so to speak, that weren’t there before.”

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