Carnival devotes more resources to travel agents

Carnival Paradise

Carnival Cruise Line will carve out four new sales territories in fast-growing areas of the country, each to be headed by a business development manager.

At the same time, Carnival made other changes to its sales structure, including the formation of a program to focus management attention on independent agents.

The four new territories are Boston and Rhode Island; Jacksonville, Fla.; western Texas; and the four corners region that includes parts of New Mexico, Arizona, Utah and Colorado.

Carnival also highlighted the formation of a new groups desk that was inaugurated earlier in October. The desk is designed to provide additional technical support for travel agent questions related to group bookings, Carnival said. It can be reached at (800) 327-5782.

“We created these new sales regions and the independent agent program to provide added business development support for travel partners,” said Carnival vice president of sales and trade marketing Adolfo Perez. “The growth in these geographies and the independent agent channel, combined with our recent preferred supplier agreements with Travelsavers/Nest, Signature, and Ensemble, make this the right time for us to expand our field team resources.”

Princess passengers on why they booked direct

The number of travelers booking directly with cruise lines keeps growing, despite efforts by cruise lines to direct business to travel agents.

On a recent cruise aboard the Ruby Princess, I surveyed 25 passengers at random about how they bought their cruise. It was an unscientific sample of a fraction of the ship’s 3,000 passengers.

Ten of the 25 passengers I talked with had booked directly with Princess Cruises. Of the 15 that booked with a travel agent, nine had used agents they had some personal relationship with, while six booked through online agencies or non-traditional travel retailers, such as Costco.

So about 40% of my sample group booked direct. That’s a little higher than the most recent CLIA survey data, which suggests about 30% are booking direct, up from a 20-80 split 10 years ago.

In this report, I’ll address the passengers who booked direct and the reasons they gave for doing so. In next week’s follow-up, I’ll discuss the passengers who used a travel agent.

Donald and Erika Smith, of Melbourne, Fla., cited convenience as the reason they booked directly with Princess. “If you want to make a change, it’s easier than going through an agent,” said Donald Smith, who is retired from the aircraft parts industry and was on his 26th cruise.

James Wetherill, from Queensland, Australia, said that agents in Australia are “not knowledgeable” about the details of cruises in North America.

Another passenger said she knows someone who works for Princess and got a friends and family discount.

Mark from Las Vegas, who declined to give his last name, sang the praises of the Princess website. “You can see exactly what’s available very clearly. You can make an informed decision,” he said.

Some passengers said they used travel agents for previous or future trips but decided to book this particular trip with Princess directly. Others expressed an indifference that is remarkable to anyone who sells cruises for a living or knows someone who does.

It was basically six of one, a half-dozen of the other to Karen Brown, of Southern California, who bought the seven-day Mexican Riviera cruise from Princess.com. Brown shrugged and said, “Sometimes we use a travel agent,” citing a past cruise when an agent offered a free gratuities promotion.

RCCL execs pleased with pricing-discipline policy

Royal Caribbean’s campaign to curb last-minute deep discounts is off to a good start.

So say top execs at Royal Caribbean Cruises Ltd., who had several things to say about what they’re calling Royal’s “price integrity policy,” in talking to Wall Street analysts last week.

Starting in March, Royal said it would stop filling its ships by offering very low prices within a month of sailing. Depending on the itinerary, Royal said it would stop discounting either 10, 20 or 30 days before the ship leaves the dock.

In an earnings call with analysts, Royal Chairman Richard Fain said the company was extending the policy in some cases to apply to bookings within 40 days of departure.

That is what is called incremental progress. If Royal sticks with it, there may be positive results for both Royal and travel agents.

Fain said that Royal is trying hard to be more consistent in its pricing, in part to keep travel agents in its corner.

“There’s probably one thing that frustrates the travel agents that we work with as much as anything else, [and it] is those late last-minute discounts,” he said. “And we can’t afford to frustrate them.”

A bit later in the call, CFO Jason Liberty raised a second reason why curbing the deep-discount cycle will benefit Royal.

“It’s really very important to the branding,” said Liberty. It lacks credibility, Liberty said, to contend that you are a brand that is high quality and has high respect in the industry — “and you can have us for half-price.”

“So the ability to maintain your image as a higher-quality product, which really has to permeate everything you do, is probably a big driver, as big a driver of our thinking as anything else,” Liberty said.

Fain said Royal recognizes that the policy is costing money in the short term. But Royal’s second-quarter earnings were up 34% from a year ago, so any losses are being offset elsewhere.

“It’s still early days, but the impact we have seen from a load factor perspective is relatively small, and it’s in line with our expectations,” Fain said.