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.

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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!.”

Royal Caribbean reveals ad campaign and strap line

Royal Caribbean International has unveiled a new brand positioning as part of its multi-million pound wave campaign.

The line today announced its new ad campaign, including a new TV ad which will first air on Boxing Day during Surprise Surprise.

Royal Caribbean has not had a strapline in recent years but following extensive market research and customer feedback, has introduced ‘Where Extraordinary Happens’.

The ad campaign will run on ITV, Channel 4, Channel 5 and various Sky channels. The new messaging will also feature on radio, print, digital, social and trade advertising.

 Royals Latest Advert
Tamara Strauss, director of marketing and PR for Royal Caribbean, said four slogans were created but existing and potential customers reacted best to the one chosen.

“For most of the year people are working hard so for the couple of weeks they get for holiday it’s important they get to experience things and have fun,” Strauss said, explaining the new brand positioning.

“You get to blow the doors off being sensible when you’re on holiday and we wanted to bring that to life because extraordinary things happen on our ships. It’s all about the experiences you can have onboard and off our ship while travelling with us.”

“We want people to see this creative and think differently about what it means to have a Royal Caribbean holiday,” she added.

To support the new positioning, agents are being sent new collateral such as new point of sale displays. The line’s portal Cruising Power has also been updated to reflect the new strapline and the call centre team in Guatemala has also been trained to have a “new tone of voice to reflect the new position”.

Royal has also revealed its wave offers which will encourage customers to ‘Go All In’. The line has a buy one get one half price promotion, meaning there’s a 50% saving on a second guest; third and fourth guests get 25% savings; all inclusive drinks packages for the first and second guest; and a reduced deposit of £50 on bookings made within at least 57 days of the sailing.

The promotion is applicable on bookings made before February 29 on selected six-nights or more cruises departing between February 1 and December 31, 2016.

Tallies of 2014 Wave range from ‘normal’ to ‘fantastic’

By Tom Stieghorst

Record month for Carnival

Carnival Cruise Lines said it booked 17% more reservations in January than in the same month in 2013, setting a new single-month record. 

Cruise retailers said last week that sales appeared to be off to a promising start in 2014, following two years of disappointment during the Wave season that ushers in each new year’s bookings.

The only cruise company that has reported earnings so far this year took a more cautious approach. Executives at Royal Caribbean Cruises Ltd. (RCCL) used words like “typical” and “normal” to describe the first month of cruise sales in a conference call with Wall Street analysts last week.

All three of the major cruise companies are publicly traded and can only release sales figures that have been submitted to the U.S. Securities and Exchange Commission.

But several travel agents were decidedly upbeat.

“It’s been fantastic for us,” reported Joseph Giampietro, president of Cruise Brothers, a large retailer based in East Providence, R.I.

Matthew Jacob, an analyst at ITG Investment Research, suggested that RCCL might be portraying its bookings conservatively.

“The data we have up until now is probably stronger than what their guidance indicates,” Jacob said. “They are leaving some cushion for softness in close-in bookings.”

But even just a “normal” year might sit well with the industry and agents after two seasons running in which a negative event collapsed the momentum that Wave season is designed to generate.

The most memorable thing about the 2014 Wave season so far is the bone-chilling cold weather that gripped the northern Cruise deckareas of the country after New Year’s and extended into much of the South last week.

The first week of 2014 cruise sales at RCCL was somewhat softer than last year, CFO Jason Liberty said.

“The severity of the weather kept people indoors and clearly resulted in lower bookings for several days,” he said.

Demand was weakest in the Northeast and Midwest but stronger in the warmer markets, he said.

By last week, another front had pushed through the Deep South, badly snarling traffic in Atlanta and other Southern areas.

Adam Goldstein, president of Royal Caribbean International, said the frigid conditions worked in the industry’s favor.

“Obviously, we are continuing to root for cold weather, and we are seeing what is more or less an endless stretch of it,” he told analysts on RCCL’s earnings call.

That could be a stroke of luck for an industry that has emphasized the Caribbean this year. Caribbean capacity, both industrywide and for RCCL, is up 13% over last year, raising questions about how much discounting will be needed to fill all of the ships.

Cruise Brothers’ Giampietro said that at a recent consumer show, many of the cruise sales it booked were for Caribbean sailings in March, April and May. He said that was unusual because in other years inventory that close in would not be available.

“A lot of those ships have redeployed from Europe,” he said. “That’s why you’re seeing that [availability].”

Cruise Brothers’ higher sales are being driven by “price points,” he said. “It’s the best value. It’s within people’s reach, and they realize it now more than ever.”

Most cruise lines are staging promotions during Wave season, featuring low deposits, onboard credits, complimentary beverage packages, reduced airfares and other incentives as well as favorable ticket prices.

Goldstein said that the level of promotions is vigorous but not exceptional.

“I think all of the industry is working very hard to get load on the ships at the desirable rate,” he said.

Giampietro said add-ons like the 123Go! offer from RCCL’s Celebrity Cruises brand make a difference on the margin.

“Does it get the phones ringing? I’m not so sure,” he said. “But it does help to close [the sale], I can tell you that.”

Other agents said cruise inquiries have been steady through January.

“What’s hot is Norway,” said JoAnne Davis, a Cruise Planners franchisee in Coral Springs, Fla.

Davis said demand is strong for river cruises and Europe in general. “And they’re not letting the airfares stop them.”

Air to Europe still costs $1,200 to $1,500 per person, but Davis said her clients have resigned themselves to paying it. She said cruise fares in Europe are also higher, citing a $4,500 price on a 12-night Baltic cruise she recently booked.

ITG’s Jacob said the lines have been pleasantly surprised by demand and pricing in Europe and Asia.

“The cruise industry has taken capacity out, and the supply is more reasonable compared to demand,” he said. “And that has led to better pricing and better booking patterns for Europe than many in the industry were expecting in 2014.”

He said pricing improvement will be a multiyear process that will depend in part on avoiding external shocks, such as the Costa Concordia accident in 2012 and the Carnival Triumph fire in 2013.

“Without those occurring, you probably would have seen some real cruise ticket growth, and maybe I think this year we’ll see some rebound in ticket pricing,” Jacob said.

Cruise executives are keeping their fingers crossed that the outbreak of gastrointestinal illness that prompted Royal Caribbean International to shorten a cruise on the Explorer of the Seas last week won’t become this year’s Wave season spoiler.

More than 20% of the passengers on the Explorer were hit by the outbreak, which was heavily covered by news media when the ship returned to port for “barrier” sanitizing before its next cruise.

In 2006, a similar number of passengers and crew were affected by norovirus on a Carnival Liberty sailing in November. The impact on 2007 bookings isn’t known, but a generally strong economy at the time seemed to be the foundation for a year of higher revenues at both RCCL and Carnival Corp.

Pricing this year remains a key question for both cruise lines and travel agents.

Katrina May, owner of YamaGogo Travel in Apopka, Fla., said she booked a five-night cruise on the Brilliance of the Seas from Tampa recently for $600. “For the close-in sailings, the price has almost been cheap,” she said.

May said cruise lines have been quietly extending promotions that were set to expire at the end of last year.

Though her agency is in Florida, May said the polar vortex that threw much of the country into a deep freeze was helping her sales. May said she’s completed three or four bookings in January for departures as close as two weeks.

“Cold weather has a lot to do with it,” she said.