Can I Finance the Cost of a Cruise?

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Carnival Cruise Line just introduced its new Carnival EasyPay program to more evenly spread out the cost of a cruise over time.

Though it’s not quite a traditional financing model, there are some other options to consider.

For those who define financing as a means of buying a product now and paying for it in periodic installments—with or without interest—after the fact, then Carnival EasyPay would not be included. Cruise lines expect to be paid in full prior to the cruise, and Carnival is no exception.

That makes Carnival EasyPay more of a layaway situation (like financing prior to receiving the product) in which you make a deposit at least 90 days before final payment is due. That is then followed by equal payments across three months automatically charged to the credit card on file.

The entire process is completed prior to sailing.

Of course, you could also budget yourself early on, effectively putting aside the necessary cash on your own while making a modicum of positive interest. Carnival just makes it simpler.

Choices for typical consumer financing are unfortunately less common. Some travel agencies offer cruise-now-pay-later plans in the 12-month range, and PayPal Credit permits zero-percent financing for up to six months. Perhaps more desirable might be zero-percent interest credit cards with an intro APR for upwards of 18 months.

A lot of these can get you quickly trapped beyond, however. So, choose wisely and use sparingly.

Otherwise, it seems the only in-house option is Disney Cruise Line.

Thanks to the Disney Premiere Visa Card, guests can receive zero-percent, six-month financing on all Disney cruises as well as select other Disney vacations. The reservation must be charged to the credit card before the trip, at which time the six months begin counting down, but that could still occur closer to the actual departure date, leaving a bulk of the cost to be paid afterward.

Carnival Cruise Line and Princess Cruises used to offer financing plans of their own but no longer do. However, many cruise lines—Carnival and Princess included—still offer branded credit cards. They mostly exist to accrue points that can be redeemed towards voyages and don’t serve any sailing cost financing purposes, unfortunately.

Other brands with such credit cards are Norwegian Cruise Line and Royal Caribbean International among others.

As Travel Pulse’s Holly Johnson pointed out, there are also a number of credit cards unaffiliated with any particular line that rack up points for cruise redemption.

So why Disney is the only cruise line to offer any form of financing of its own now, especially if Carnival and Princess once did?

Either the programs were not popular or they proved too challenging for the cruise lines to keep up with. As consumers generally appreciate the opportunity to offset due dates for paying back big expenses, it’s hard to imagine it was the former.

Perhaps dealing with banks was a costlier ordeal for the cruise lines in the long run than originally anticipated. Back in 1997, financing from Princess was being offered for as far out as 48 months in conjunction with MBNA AMERICA BANK, according to Cruise Industry News.

Then Princess Senior Vice President of Sales and Corporate Relations Richard James was quoted as saying, “We know that the key barrier to cruising today is that people think they cannot afford it.”

He also added, “We must go beyond traditional ways of marketing and begin positioning cruises as being affordable, and this program addresses affordability head on.”

Affordability is sometimes still viewed as a stumbling block—albeit an often false one given the incredible value of cruising—and it stands to reason that financing programs would be a good tool for cruise lines to again offer.

In 1997, boomers were the primary demographic of cruisers. With millennials now heavily in the mix, it might be the perfect time to bring financing back to appeal to younger generations more inclined to charge a reservation.


New data show booming sales for travel professionals

By Kate Rice

Growth chartDespite lingering perceptions that travel agents are a dying breed, newly released industry figures reveal that business is booming for agencies of all types and sizes. The greatest challenge to their growth, in fact, is not a surfeit of online competition but a deficit of manpower.

The data were part of a report ASTA released last week based on a survey that found more than half its members reporting increases in revenue — i.e., commissions and fees — as well as growth in numbers of both transactions and customers for the second year in a row.

At the same time, major agency marketing groups, from regional consortia to global enterprises, are reporting double-digit increases in sales of suppliers’ products, many of them high-margin products.

The new data fly in the face of a persistent myth that the Internet is putting agents out of business.

“To paraphrase Mr. Twain, the reports of our death have been greatly exaggerated,” said Mike Estill, COO of the Western Association of Travel Agencies (Westa). He said his members’ total sales for 2013 were up 10% over 2012, itself a banner year. In some segments, such as luxury cruises, he said, they were seeing better than 25% growth rates, and 2014 is already well ahead of 2013.

John Werner, president and COO of the Midwest consortium MAST Travel Network, said that in 2013, total sales for all suppliers were up 17%, and 2014 sales are currently up 10% to 30%, depending on the supplier.

“Agencies are reporting that customers are coming back to them after having tried planning some of their trips themselves,” Werner said. For many agents, the problem is not a lack of customers but a lack of travel professionals.

“Many of our members have said to me they could handle more business if they could hire another experienced travel agent,” Werner said.

Likewise, Steve Loucks, chief communications officer for the Travel Leaders Group, said the biggest challenge for retail travel was not online competition but a lack of manpower.

He said Travel Leaders Group, which includes the Travel Leaders franchise, the consortium and the host agency Nexion, has been “vigorously working to attract new talent.”

Travel Leaders Group has grown from $6 billion in sales in 2007 to more than $20 billion in 2013. Some of the growth resulted from acquisitions, but much was organic, as illustrated by its Tzell Travel Group brand, whose sales volume doubled from just over $1 billion in 2010 to more than $2 billion in 2013. That growth, Loucks said, did not include Tzell’s merger with Protravel International in 2012.

Retail travel is growing across the board, regardless of whether an agency’s business model is corporate or leisure, brick-and-mortar or home-based.

For the survey, ASTA assembled a panel of agencies that was a representative sample of its members. Corporate agencies reported the strongest performance in 2013, with 65% reporting increased revenue and 57% reporting an increase in clients.

Among leisure agencies, 56% reported increased revenue, while 59% reported a growth in number of clients.

For the purposes of the study, ASTA defined independent agents as owner/agents, independent contractors or hosted agents. Among this group, 44% reported increased revenue, and 46% reported an increase in the number of clients.

Sixty-four percent of all travel agencies reported a profit in 2013. That included 72% of corporate agencies, 62% of retail leisure agencies and 57% of independent agents.

For 2014, leisure agencies were forecasting an average 11% profit, independent agents a 13% profit and corporate agencies a 10% profit, according to the ASTA study.

Agency consortia and franchises numbers, cited independently, appear to support ASTA’s data in showing continuing sales growth into this year. These are not sales that represent a recovery from the recession of 2008 and 2009 but sales coming on top of that recovery.

Westa’s Estill said that 2012 marked the consortium’s best year post-9/11. And while gross sales increased 10% in 2013 over 2012, revenue also was up by several percentage points more, due to performance bonuses, he said.

Consortia reported increases both in high-margin products and mass-market products.

Luxury is Signature Travel Group’s fastest-growing segment, with high-margin cruise and tour products up nearly 10% in 2013 over 2012. More than 70% of Signature members reported higher cruise, tour and land products over 2012, according to Executive Vice President Ignacio Maza. He said that an increasing number of Signature members are selling high-margin cruises, complex FITs, custom-tailored groups and family travel.

Maza added that a “large segment” of Signature members charge an hourly fee or planning fee for their work, an increasingly common practice industrywide, which also contributes to higher revenue.

Ensemble Travel Group reported that its preferred supplier sales (the only sales it tracks) were up about 10% in 2013 over 2012, and it is forecasting similar growth in 2014 over 2013.

Host agencies for independent and home-based agents also said last week that they were seeing double-digit sales increases.

• Avoya Travel, an American Express Travel Representative Agency, said that 2013 was the best year in the company’s history, with overall sales up 30% over 2012.

• Cruise Planners, another American Express Travel Representative that also is a host agency, said it saw a sales increase of 24% in 2013 over 2012, to $217 million. It said its first quarter this year was 32% ahead of the same quarter in 2013.

• World Travel Holdings, which has sales volume of more than $850 million, said it was seeing double-digit booking growth across its more than 40 brands, which include CruiseOne, Cruises Inc., Cruises Only and private label cruise programs for entities ranging from American Airlines to Orbitz and Priceline.