Mobile could pose biggest threat to travel stores of the future

Mobile could pose biggest threat to travel stores of the future

 

By Travolution
By Travolution

The move by technology giant Apple to establish a high street presence should provide the inspiration for the bricks and mortar travel stores of the future, but mobile could emerge as their biggest threat.

The fourth annual WTM Vision half-day conference in London debated the future of the high street with David Burling, managing director of Tui UK and Andy Washington, managing director of Expedia taking part in a panel debate.

Burling used the example of Apple, which has a network of stores throughout the UK in prime locations showcasing its products, as an example of how the future of the high street might look.

“The travel agency has evolved and it will keep evolving. If you have bookings that can be transacted across different channels the stores of the future may be different from the stores of today.

“What is clear is that the quality of the service and advice that good travel agents can give is still very important.

“Channels are becoming more blurred. The technology will become more available for consumers to start the booking in one channel and finish it elsewhere.

“The strength of the retailer is really around the product knowledge and customer service but there is also a role for the stores of the future offering more inspiration at the very early stages of the booking.

“Who would have believed that Apple of all people would have decided to open a load of retail stores?”

Mike Greenacre, former managing director of Co-operative travel  and a delegate at today’s event agreed.

“I very much agree with Dave about inspiration. The high street has greatly evolved and I think it will continue. The big change that will come is how retail stores embrace this technology.

“Where there is an Apple store it’s the busiest shop in town by a long long way.”

However, Andy Washington, managing director of Expedia UK, said: “The biggest threat to the high street us mobile.

“What’s stopping me going into a high street store getting them to do all the work and then googling it on my mobile to find it cheaper?”

Burling said Tui UK’s strategy is based around its differentiated product offering that stems from its close partnerships with hoteliers that has seen it develop a number of resort concepts.

“We want to be involved in designing a particular hotel experience with our partners. By doing that we get a better consumer experience, better repeat business and better reviews.”

Burling said concepts like its Splashworld water park resorts were showing “huge growth”.

“It’s identifying the customer requirements and working with hotel partners. We can do that because of our scale.”

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Agents assess pros and cons of Royal Caribbean restructure

Agents assess pros and cons of Royal Caribbean restructure

Agents assess pros and cons of Royal Caribbean restructureAgents are concerned that plans to move the Royal Caribbean International and Azamara Club Cruises trade and client call centre to Guatemala could impact service levels.

The move is part of a proposed restructure of RCL Cruises to create individual businesses for Celebrity Cruises, Royal Caribbean and Azamara.

But agents welcomed the dedicated focus on each of the three brands and the proposed creation of a 50-strong Celebrity Cruises guest and trade services team to be set up in the UK.

Moving the Royal Caribbean and Azamara call centre to Guatemala could result in the loss of 100 jobs. A consultation period has begun.

The new structure is planned to take effect from January 1, 2014. Jo Rzymowska, associate vice-president and general manager, will become managing director for Celebrity Cruises. Separate managing directors will be appointed 
for Royal Caribbean and Azamara.

John Sullivan, head of commercial at Advantage, said: “I am concerned about the call centre being moved. When this has happened with other companies the service has suffered.

“But on the flip-side, splitting the three brands is good. Having separate teams should result in our members having enhanced service and support.”

Peter Ruck, of GoCruise with Peter Ruck, said: “This would appear to benefit those agents booking mainly Celebrity Cruises.

“I don’t know of any consumers who want to deal with foreign call centres.”

Speaking to Travel Weekly, Michael Bayley, Celebrity Cruise’s president and chief executive, said: “As the individual brands develop and grow, they have different strategies. At Celebrity Cruises our focus markets are the UK and Ireland, North America and Australia.

“Royal Caribbean has significant focus in the UK and Ireland, but it has significant global sourcing and therefore a greater need for a multilingual global contact centre operation.”

Carnival Triumph incident takes toll on Wave bookings, pricing

Carnival Triumph incident takes toll on Wave bookings, pricing

By Tom Stieghorst
For the second year running, the cruise industry’s key sales period has coincided with a high-profile mishap at sea.

Agents say early momentum during the Wave season slowed notably after February, when a crippled Carnival Triumph temporarily became the public’s idea of a cruise.

Although big travel agent groups say bookings are up 5% to 16% over 2012, pricing remains slightly behind on cruises booked over the next 12 months, according to one analyst.

Kevin Weisner“It’s two stories in one quarter,” said Kevin Weisner, vice president at CruiseDeals.com in Charlotte, N.C. “January felt pretty good. Then in March it was a different story altogether. 

“We really felt there was a significant impact to our business and call volume in the month of March, which was pretty directly attributable to the incident with Carnival Triumph and the subsequent coverage.”

Weisner said bookings to date are “a little behind” last year, characterizing it as “more than a rounding error but less than ‘worry about it’ size.”

As might be expected, Carnival Cruise Lines is cited as the line with the biggest bookings drop. 

In a mid-March conference call, Carnival executives said bookings fell by double digits in the days immediately after the Carnival Triumph engine fire but bounced back after promotions were offered.

Ian Rennardson, an analyst at Jefferies International, estimated in a recent report that prices at Carnival’s flagship brand are down 8% for cruises departing in the next three months. 

Rennardson said Norwegian Cruise Line seems to be faring the best of the major brands, likely because of strong pricing for its Breakaway and Getaway ships nearing completion. 

Some big agencies say they’re doing pretty well. Joe McClure, president of Montrose Travel near Los Angeles, said cruise bookings are up 16% and sales up 23% year to date.

“We’ve seen soft pricing from the largest mass-market cruise line, but we’ve seen pretty steady pricing from their competitors in the same space,” McClure said. 

At CruiseOne/Cruises Inc., general manager Dwain Wall said bookings are up mid-single digits. He said business was strong in 2011 and 2012, “and that is continuing in 2013.”

Dwain Wall_But could it be even better? 

Bill Walsh, president of Cruise Travel Outlet, in Salem, N.H., said that after a record January the phones grew quiet. “We are still up double digits on the year but wonder how much we could have been up,” he said. 

Last year’s Wave season provides some easy comparisons. In 2012, the wreck of the Costa Concordia chilled consumers and drove prices into a down cycle that took most of the year to undo. 

Hopes were high at the start of 2013 that consumers had turned the page and would book cruises that they might have taken a pass on just after the Concordia’s accident.

While not nearly as consequential as the Concordia, the week-long saga of the disabled Carnival Triumph that started Feb. 10 grabbed an inordinate amount of media attention.

The questions now are how long will Carnival be affected, and how broadly will Triumph’s impact be felt? 

Wall said that he expects Carnival to bounce back big, as attention shifts to other news stories. Unlike some, Wall feels that Carnival stayed on top of the crisis. 

“I think Carnival did a fantastic job managing that horrible mess they got themselves in,“ he said.

For starters, Carnival met right away with CruiseOne to lay out the facts, develop talking points for agents and an FAQ sheet for passengers who were already booked on Carnival. 

“Carnival armed our agents with every possible tool we could think of to make sure they were not sitting there empty-handed,” Wall said. 

At the same time, CruiseOne/Cruises Inc. moved up some Carnival marketing that was originally planned for later in the year. Carnival has done some customized newsletters for CruiseOne/Cruises Inc. agents.

“They couldn’t have been more supportive,” Wall said. 

Beyond the Triumph fallout, another issue clouding Wave season is the strength of European demand. Wall said he’s having a “phenomenal year” in Europe due in part to better agent training.

Grace Dieleman, of Cruise Holidays of Chatham-Kent in Ontario, also said her European business is strong.

Joe McClureBut Europe is soft at Montrose Travel, McClure said. And another Canadian Cruise Holidays agent, Samuel Spencer of Calgary, said that despite some clever promotions from the cruise lines, his numbers remain depressed for big-ship European cruises.

“High summer airfare is once again a deterrent to price-sensitive cruisers,” he said.

In addition, many customers seem to be hanging back and not taking advantage of new value-added promotions such as Celebrity Cruises’ 123Go. When they do book to Europe, Spencer said, it is often too late to get decent airfares, which hurts the travel agent because such a large part of the overall price of the vacation is not eligible for commission.

Many cruise brands owned by public companies are restricted by Securities and Exchange Commission rules on what they can say about pricing and booking during Wave season. 

In his April 3 report, Jefferies analyst Rennardson said it appears to have gone better at Royal Caribbean and Norwegian than at Carnival Corp.

For close-in bookings, Rennardson said almost all Carnival Corp. brands are in negative territory, with the Euro-centric P&O, Cunard Line and Costa suffering the most.

Prices for Carnival Corp. cruises sailing within three months are down 8.9%, compared with increases of 7.7% for RCCL and 7.1% for Norwegian Cruise Line Holdings, leading Rennardson to conclude that the latter two are benefiting from Carnival’s troubles.

For cruises sailing four to 12 months from now, the picture is more muddled, with prices at Carnival (down 0.7%) and RCCL (down 3.3%) lower than last year but Norwegian (up 4.7%) in the black.

Rennardson said RCCL is being dragged down by a 23% price decline at its Spanish brand, Pullmantur.

Overall, pricing trends have deteriorated over the past few months, following a period of improvement in waning months of last year. 

“Given the easy comparisons of 2012,” Rennardson wrote, “the 2013 ‘Wave booking period’ is more important than ever, with share prices vulnerable to any perceived pricing weakness as cruise pricing in the first few months of the new year is often a good barometer for the rest of the year.”

One bit of good news that doesn’t seem to have made much difference is the stock market’s rise into record territory. New wealth might yet translate into higher cruise bookings and prices, although outside of luxury products, Wall said he doesn’t find much correlation.

Likely of more benefit, said Weisner of CruiseDeals, would be a lasting upturn in home prices. 

On that point, Weisner said he’s encouraged. For the first time in a long time, home values have been advancing month after month in a consistent fashion, giving worried homeowners some peace of mind.

“I really do believe, from a personal point of view, that [rising home prices] is going to be a better catalyst for leisure travel sales than the [stock] market,” Weisner said.