Agents Say Cruise Repricings, Reroutings Stealing Time From Sales
Reduced pricing and itinerary changes on cruises are giving grief to travel agents, who say rebookings are taking away from their available time to sell cruises.
Cruise Week discussed the situation with numerous sources from both the supply and retail sides. All spoke off the record in order to express market conditions more honestly.
One top retail source summed up the situation: “Repricing Med itineraries is standing in the way of getting new business on the books. Any time we have to work on repricing an existing booking, it takes away from our time to do the work of talking about new vacations.”
Such dialogue is particularly important at this time as many people could be enticed into taking European cruises due to the value message, but they need a push.
Another retail leader shared numbers to explain the situation: “It looked really good going into the year. We were running modest double-digit increases into Europe across all major cruise vendors. But since then, 2nd quarter revenue is down 5%. The 3rd quarter is worse, and that’s the most important quarter of the year for North American business to Europe.”
He says Q3 still had a lot of bookings to pick up. “Not only did that slow but a good deal of what was already booked was repriced.”
He then shared what he termed as “some relatively shocking” statistics about the cancellations. “Going back to 2013 European bookings, we had a cancellation rate of 4.5% for the 1st quarter of the year. This year it’s at 17% for the 1st quarter. This refers to something on the books with money. The highest are the upper-end vendors because the agent has to cancel the initial booking and rebook it.”
And, to make matters worse, from the supply side, several sources predict more repricing and reroutings are on the way. These suppliers cite the latest update to a U.S. State Department Travel Warning on Turkey as a big factor. March 29th the U.S. State Department’s warning originally posted 17MAR was replaced with stronger wording: “The U.S. Department of State warns U.S. citizens of increased threats from terrorist groups throughout Turkey and to avoid travel to southeastern Turkey. Stay away from large crowds, including at popular tourist destinations. Exercise heightened vigilance and caution when visiting public access areas, especially those heavily frequented by tourists.”
In addition, there’s the overall business climate. To date, the brands making the most reroutings have been those lines with the highest proportion of North American passenger sources. “The American travel market is more skittish than the Brits,” says one cruise exec. “We see that in our daily comparative counts between the 2 countries, how each is doing relative to last year and relative to expectations.”
Combine that view with the most recent travel warning to Turkey, and this exec’s view is that one can reasonably expect some more changes involving Istanbul in the back half of ’16. “It is hell for everyone to make those kinds of changes,” he adds, “and it costs a lot of money because you have to do all sorts of things to keep people happy.”
One cruise exec said that while all European cruise operators are having “sales headwinds,” he is hopeful that could soon change, barring another tragedy. “While we have yet to see sales return to a normal state, I’m very bullish. We are seeing web visits come back up. Having said that, people are nibbling but not ready to commit in normal numbers.”