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.

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Royal Caribbean names partners of the year for 2014

Royal Caribbean International named five agencies as regional partners of the year for 2014.

They include Vision Travel Solutions for Canada, Cruise and Vacation Authority for the Southeast, Travel Network for the Northeast, Cruise Holidays of Kansas City for the Central region, and Cruise Specialists for the West.

Buy the Sea was named partner of the year for corporate meeting and incentive travel.

Also honored for 2014 were Nexion as home-based partner, Avoya Travel as online partner and American Express Travel as consortia partner.

Cruise Planners/American Express received the President’s Award for overall achievement, with World Travel Holdings tabbed for the Chairman’s Award for overall achievement.

Travel Power List

2014 Power List

Introduction

2014 POWER LISTTwo online titans dominated this year’s Power List, separated by just a few hundred million dollars, which is not a lot at the heady levels of sales at the top. Expedia, with sales of $39.4 billion in 2013, squeezed past Priceline, at $39.2 billion. A fairly distant third was American Express, at $30.3 billion.

The list continues to reflect strong recovery in the industry; most listees did better than the previous year, and the overall number on the list rose from 53 to 58.

Following are some highlights of this year’s Power List of businesses that were the agency of record for $100 million or more in travel-related sales in 2013.

• Five companies registered more than $20 billion in sales, the same number as in 2013, although three had more than $30 billion, up from one last year.

• Sixteen companies recorded sales of more than $1 billion, the same as the last two years.

• Priceline continued to come on strong, partly on the strength of its Booking.com division, vaulting from $28.5 billion in 2012 to $39.2 billion last year.

• Smaller firms continued to grow impressively, with and without acquisitions. Ovation Travel moved from $828 million to $910 million, and Direct Travel soared from $575 million to $767 million as it continued an aggressive acquisition strategy.

• Companies continued to report increases in sales from hosted or outside travelsellers.

• There were several new listees this year: International Cruise & Excursions, or ICE (No. 22); the Appointment Group (50); Gant Travel Management (51); Conlin Travel (55); CruCon (56); and Campbell (58).

• Firms were asked to describe their business model. Most said they sell directly to consumers, although some do white label. And many described a mix of centralized agency and hosted structures.

• Companies that operate outside the usual travel-selling model continue to thrive. ICE does business through partnerships, such as opening travel stores in Sears locations.

• Leisure agencies continued to grow by offering creative packaging and good deals. Listees that are leisure-dominant include Expedia, Priceline, FC USA, AAA, Travelong, World Travel Holdings, ICE, CheapCaribbean.com, H.I.S.-USA, Avoya, Travel Experts, Cruise Planners, CruCon and Quality Reward Travel.

• Not surprisingly, technology dominated the replies when it came to recent developments and projections. A number of companies said they were developing proprietary technology solutions.

• For the first time this year, companies were chosen for “breakout” profiles to demonstrate the diversity of Power List companies. ICE, new to the list, has an unusual business model, serving as a travel provider to corporations and associations; Christopherson Business Travel demonstrates how many agencies, while not at the top of the list, continue to grow and innovate; Conlin Travel, another newcomer to the list, continues to operate out of traditional storefronts.

The 2014 Power List proves again the resilience and adaptability of an industry that many seem to believe is disappearing. On the contrary, it is a channel that is gaining strength even as it evolves.

Methodology

The compilation of Power List 2014 began late last year, and early this year, the questionnaire was sent to roughly 70 companies that:

  • Had appeared on the list in previous years.
  • Had been in the news because of acquisitions or had grown for other reasons.
  • Had contacted Travel Weekly believing they qualified.

To qualify for the list, agencies had to reach $100 million in sales in 2013. For purposes of this survey, sales are defined as gross sales of travel products, whether to consumers or corporate travelers, for which the company is the merchant of record from a supplier’s perspective. At least 15% of the sales volume must have been generated in the U.S.

“Travel products” does not include licensing income or royalties from developing booking platforms, user interfaces, apps, etc. Included are only the booked components of a trip: cruises, tours, forms of conveyance (air, car, train, etc.), attractions, accommodations, entertainment, etc.

Gross sales volume, the primary number for ranking, had to be certified by a company’s owner, CEO or CFO.

Responses showed that most companies were happy to cooperate with that stipulation. In a small number of cases, certification was made by an executive at the vice president level but with financial oversight.

In one case (BCD Travel), sales totals were based on publicly disclosed information because the company did not respond to the survey.

We believe the following companies are among those that may have qualified for the list but opted not to participate: Adtrav, Travizon, Travelocity and STA Travel.

While all cooperating listees did certify sales (or make them public), it must be kept in mind that even those numbers are difficult to verify because the great majority of travelsellers are privately held and under no obligation to disclose financial data.

Also, there is no commonly accepted standard for calculating sales volume, and there is no clearinghouse in the U.S. that tracks non-airline sales, as ARC does for airline sales.

Where possible, Travel Weekly sought to confirm accuracy in the figures by referring to other data and to articles published in the past year. We also reviewed responses for consistency and used whatever resources we had at our disposal to ensure accuracy.

The survey on which these rankings was based included questions involving sales figures; ARC sales; travel-related subsidiaries; percentage of sales from business, leisure, etc.; corporate structure; and other topics. There were several open-ended questions about recent and planned developments to which companies could reply.

Responses to the questionnaire determined the length of the profiles that accompany each listed agency. Companies were offered the option of having an executive interviewed by a Travel Weekly editor; several took advantage of that opportunity.