Retailers Say Several Factors Impacting Med Cruise Sales
report a variety of factors complicating Mediterranean cruise sales. Although 2016 Europe bookings in general have been trending positively
with sales ahead of last year in terms of volume and price, the recent
escalation of global concerns may take a bite out of future sales.
top producing retailer pointed to a Princess promotion as an example of
fluidity inthe Med. The day
after the Istanbul explosion, the agent saw thatPrincess came out with a boost to its
‘Twice as Nice’ Wave Season promo in which consumers get up to $1000 off and a
shipboard credit of up to$600
The boost essentially doubled the
onboard credit for select Medbookings.
The agent said the bonus portion currently is scheduled to end at the end ofthis month, whereas the overall
promotion continues until the end of February.
Princess’ Med bonus program and
timing for launch was planned prior to the Istanbulterrorist attack, but by coming out
immediately following the Istanbul attack it created a negative perception.
“The timing made it look like pricing panic is setting in,” said one retailer.
“There’s a wholelot of talk in
the marketplace now about Europe prices.”
The perception is unfortunate and erroneous but understandable given the globalbackdrop. It now seems that terrorists
are targeting areas of touristinterest.
When they do damage to these areas, it has the knock-on effect of impacting the
target country’s economy.
The Paris attack has clearly impacted land tourism to that city, although it
has notbeen seen as
significantly impacting Europe cruise tourism.
Turkey is very dependent on tourism. Reports indicate it issuffering already because Russians are
staying away due to a dispute between governments.
Immediately after last week’s attack,
German leaders released public statementsessentially
saying, “Go to Turkey, but stay away from public squares and tourist
attractions.” That’s not an appealing message for mainstream tourism.
Then, in response to ongoing security
concerns, Crystalshifted its
2016 Turkey calls to Greece. MSC has followed and other lines are reviewing the
Another factor impacting Med cruising
is that high airfares to Europe have not gone away, despite the plummeting
price of fuel. On the river side, Viking is among those making moves to combat
air costs as adeterrent, but in
general the ocean lines have not done so.
When you start adding all the
variables up, some people are saying, “Maybe not thisyear.” But they are also worried about
2017 Europe, so they are not ready to commit the yearahead, even though the lines have made
it very appealing to book early.
For Americans, the strong USD is a reason to go with a lot of
people saying, “Well, I’ll go to Europe thisyear
even with all the problems. Terrorists won’t deter me.” But the strong dollar
is also a double-edged sword.
For one thing, the cruise lines have a lot of international exposure. A
prime example of the impact is in Canada, where the freefalling loonie has hit
13 yr. lows. The
currency is down nearly 20% against the USD year-over-year.
As well, the Canadian unemployment rate has hit 7% for the first time in 5
years. Businessreports indicate
significant layoffs are feared in Calgary’s oil and gas business, on top of
whathas already occurred.
Bottom line: there’s a lot of angst amongst Canadian consumers - on top of allthe world problems, that leads to
discretionary purchases being put off.
Thegood news is that, overall,
retailers and suppliers alike report business remains strong duringthis important booking period.
However, when it comes to the important Mediterranean cruise market,there are an extraordinary number of
issues coming into play, and much uncertainty looking ahead.