The Cruise Equation
By Mark Murphy
September 07, 2011 11:45 PM
Travel agents are trying to figure out how they can continue making money selling cruises just as we’re approaching National Cruise Vacation Month. As some cruise lines focus their strategy on acquiring customers at a very low price point and then try to make it up with onboard spend, travel agents are at risk of being left out of the equation.
If you want to sell the shorter Caribbean sailings, the ones where a vast majority of cruise traffic is directed, you had better be ready to sell on the Internet and lower your costs. These bookings won’t be high margin, but they’ll have to be high volume if you want to make a go of it.
You’ll need to be super-efficient and able to close sales quickly because too much time spent will lead to loss of margin in an already-thin margin space.
You’ll be competing with the large call centers, the cruise lines themselves and online travel agencies. You’ll need to be super-efficient and able to close sales quickly because too much time spent will lead to loss of margin in an already-thin margin space. You might want to forget about customer loyalty -- with this market low prices attract customers who can be swayed by a $10 savings somewhere else, so loyalty be damned.
That’s just the way it is today with the strategies that many cruise lines have developed to push their product on the Internet. It doesn’t mean you can’t compete, it simply means you have to look at new ways of selling so you can thrive.
One option to consider is selling longer sailings on newer ships with higher price points, as well as more exotic itineraries that lend themselves to your areas of expertise. Cruise lines desperately need your support in these areas, and you can prove your value at a much more lucrative level to both the lines and your customers.
You might be wondering why some cruise lines have chosen to go the route that they have.
You might be wondering why some cruise lines have chosen to go the route that they have. Difficult economic times drive people in directions that may not be healthy long term, but may be considered necessary in the short term. I think that pretty much sums it up.
We see the same things going in other industries today. For example, take a look at a Google search for “Caribbean cruises.” Cruise lines pay $3 and more per visit to come up at the top of paid search listings so someone will click and visit their site. That consumer may book a cruise or he or she may not. On the other hand it costs less than the price of a single stamp per reader for a cruise line to put a full-page, four-color ad in magazines like Agent@Home and Vacation Agent and reach a travel agent who is aggressively selling cruises.
Should cruise lines focus on bottom feeders looking for the cheapest online price? Or should they focus on the travel agent who’s gearing up to sell a lot more cruises at higher yields during National Cruise Vacation Month? I leave the answer to you – and to them.
Mark Murphy is president and CEO of Travalliance, parent of TravelPulse.com, Agent@Home magazine, Vacation Agent magazine, TravelTribe.com, Travel Agent Academy and Virtual Travel Events. This column is adapted from one appearing in the September issue of Vacation Agent magazine.



