Cruise line promotions increase in number — and complexity

Image result for Take Six Free norwegian cruise offers
Norwegian Cruise latest offering

One of the virtues of “123Go!,” which was rolled out by Celebrity Cruises for Wave season six years ago, was its simplicity.

The promotion was as breezy as it sounded. Passengers could pick one of three free promotions when they booked a cruise. If they were going to Europe, they could pick two. That was it.

Whether it was the simplicity of the concept, or the value locked into the choices, or the idea of choice itself, the promotion struck a nerve. Agents cited it as the most successful offer of the Wave season in 2013, and Celebrity extended it until it became part of the line’s standard offering.

Six years later, the promotions of the sort started by “123Go!” are ubiquitous. Nearly every sizeable line has its version.

It started when Celebrity decided to evolve “123Go!” into its 2015 successor campaign “Go Big, Go Better, Go Best.” With this one there were four amenities, not three. And the number of amenities that could be chosen depended on the fare. And third and fourth passengers in the cabin could get a limited amount of internet minutes for free.

Image result for 123Go! celebrity cruise advert

Today, there are a bewildering number of promotional packages for agents to keep track of, all with different terms, expiration dates, geographic applications, exceptions and combinability options.

“The promotions are very complex,” observed veteran agency executive Dwain Wall. “Agents find the consumers are very confused.”

Wall said some cruise lines have taken to spelling out the value of the various terms in their promotion as a result.

Norwegian Cruise Line, for example, has its “Take Six Free” offer, which dangles not three but six different amenities. More choice, more value, right? To be sure. But also more complexity.

In many of its ads, Norwegian puts price tags on the various options as a consumer service. An open bar is valued at $1,400. Free shore excursions: $200. A speciality dining package: $160 in savings; free Internet, $130.

The biggest and latest amenity to be added to the package is airfare, which Norwegian says is worth $600 to $1,900 in savings, depending. Depending on what? Well, you have to dig into the fine print to find out.

In many ways, an advisor’s job is better with these promotions. Free add-ons make closing easier, more amenities broaden the appeal, and preserving or even boosting the fare helps increase commissions. Not to mention that the complexity helps reinforce the concept of an advisor as an indispensable consultant: Who better to comb through the various deals and amenities, walk the client through the options and find them the best combination?

But it should not be lost that in the process the promotions are no longer as simple as “123Go!.”

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Celebrity Cruises to go mainly with bundle pricing

Celebrity Cruises is set to roll out a permanent change to its pricing structure, starting July 6.

The new system builds on Celebrity’s 123Go! promotion, which offers a menu of perquisites, such as free gratuities, beverage packages or an onboard spending credit.

The pricing structure, to be called Go!Big, Go!Better, Go!Best, adopts the rhythm and language of the 123Go! promotion, but Celebrity is emphasizing that it is not a temporary campaign.

The structure will be applied to nearly all inventory from Oct. 1, 2015, through April 2017, the most distant announced deployments.

Celebrity began describing the new structure to agents in a series of webinars that started on June 27.

Guests can choose among four perquisites: a Classic beverage package, free gratuities, unlimited internet or a $150-per-person spending credit.  All oceanview, balcony and suite accommodations will be priced at minimum with the choice of one perquisite built in.

In effect, cruise-only pricing at Celebrity will be eliminated, except for inside cabins.

A Go!Big price includes a choice of one option, while Go!Better includes a choice of two. Go!Best provides all four, and substitutes a Premium beverage package for the Classic package.

Celebrity said that the Go!Best option makes it the first premium segment cruise line to provide all-inclusive pricing. Although a shore excursion is not included, as it is with some all-inclusive luxury cruise products, the onboard credit can be applied to excursions, Celebrity said.

As with 123Go!, a buyer of a bundled fare that has a third or fourth guest in their cabin will receive nonalcoholic drink packages and 90 minutes of free Internet for those guests, Celebrity said.

The new pricing will not apply to Celebrity’s Xpedition ship or to transatlantic and transpacific crossings.

By bundling the noncommissionable items into the standard fare, Celebrity is effectively raising the commissions that travel agents can earn selling most Celebrity cabin categories.

It said the structure is also good for consumers because buying the perquisites separately would cost more than the bundle.

Celebrity said that with the introduction of the Go!Big, Go!Better, Go!Best pricing structure, the 123Go! promotion launched in 2013 will be retired.

Donra Ritzenthaler, Celebrity’s senior vice president for sales, trade sales and service, said the new pricing was more than two years in the making. Among the internal debates was whether it should be rolled out as a promotion or brand strategy.

In the end, the line’s CEO, Lisa Lutoff-Perlo, said “the team was aligned” on a pricing strategy. “We wanted to raise the bar.”

Ritzenthaler and Lutoff-Perlo tested the waters with the concept by giving a sneak peak of the strategy to large accounts early last month.

Upon hearing the plan, World Travel Holdings co-president Brad Tolkin said he liked the “crisp and clean” simplicity of it.

“Are specialty restaurants over and above [the price of the cruise]?” he asked.

“Yes,” Lutoff-Perlo responded. “But the onboard credits would get that covered.”

“We needed to completely change what’s going on,” Ritzethaler told Tolkin. “Our guiding principles were to give consumers ultimate choice, raise APDs (average per diems) and make it easy.”

When the strategy was outlined to him, Vacations To Go president Emerson Hankamer said he felt it was “a very strong, proactive thing for the trade.”

Although his company focuses on attracting consumers with the prospect of low prices, he understands the attraction of value-adds, even when they represent an alternative to lowering prices.

“If you load up with amenities but the price is high, you’ll get a higher-quality customer who spends more,” he said.

Celebrity Cruises to eliminate NCFs on some June bookings

By Tom Stieghorst

Celebrity EquinoxCelebrity Cruises will pay commission on what is typically invoiced as noncommissionable cruise fare (NCF) on some cruises sold in June by travel agents in North America.

The extra commission applies to 2015 sailings, if agents book veranda cabins and above. NCFs can account to 10-15% of the total cruise price.

Celebrity’s offer to agents coincides with a renewal of its 123Go! promotion to consumers. The offer to agents is being styled as “123 Thank You.”

Payments on the NCF portion of the sale are on bookings of all duration and every geographic area, said Dondra Ritzenthaler, Celebrity’s senior vice president of sales.

Dondra Ritzenthaler“We have never done anything like this before,” Ritzenthaler said.

Ritzenthaler said that 2015 bookings were not notably behind or in need of a boost.

“It’s a 30 day way to say thank you to all of our travel partners who have really supported us through all of our promotions,” she said.