Retailers Say Several Factors Impacting Med Cruise Sales


Retailers 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.

One top producing retailer pointed to a Princess promotion as an example of fluidity in the Med. The day after the Istanbul explosion, the agent saw that Princess 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 per stateroom.    

The boost essentially doubled the onboard credit for select Med bookings. The agent said the bonus portion currently is scheduled to end at the end of this month, whereas the overall promotion continues until the end of February.        

Princess’ Med bonus program and timing for launch was planned prior to the Istanbul terrorist 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 whole lot of talk in the marketplace now about Europe prices.”

The perception is unfortunate and erroneous but understandable given the global backdrop. It now seems that terrorists are targeting areas of tourist interest. 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 not been seen as significantly impacting Europe cruise tourism.
Turkey is very dependent on tourism. Reports indicate it is suffering already because Russians are staying away due to a dispute between governments.

Immediately after last week’s attack, German leaders released public statements essentially 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, Crystal shifted its 2016 Turkey calls to Greece. MSC has followed and other lines are reviewing the situation.

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 a deterrent, but in general the ocean lines have not done so.

When you start adding all the variables up, some people are saying, “Maybe not this year.” But they are also worried about 2017 Europe, so they are not ready to commit the year ahead, 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 this year 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. Business reports indicate significant layoffs are feared in Calgary’s oil and gas business, on top of what has already occurred.
Bottom line: there’s a lot of angst amongst Canadian consumers - on top of all the world problems, that leads to discretionary purchases being put off.
The good news is that, overall, retailers and suppliers alike report business remains strong during this 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.

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