Cruise Focus on Cruising: Technology, trust at heart of partnership By Donna Tunney / April 25, 2012 Share 1 -- It wasn't so long ago when the typical relationship between a cruise line and a cruise agent was strictly a two-party deal. The cruise line would offer a product, the agent would sell it to a client, and there was no reason to expect any communication between the supplier and the buyer. That scenario still represents a perfect world to many agents, particularly those who, in the distant or recent past, were angered by a cruise line that aggressively reached out to customers. But with Internet technology and social media so prevalent in daily life, retailers have far less control over what their clients see, hear and learn than they did 15 or 20 years ago, and contact between suppliers and buyers is inevitable. The cruise line/cruise agent relationship has evolved in many ways since then, but industry veterans agree that the fundamental changes can be attributed to technology and trust. The traditional practice, for example, of an agency keeping its client base under a cruise line's radar no longer appears to be a big concern at Virtuoso, the agency organization that specializes in high-end vacations. The group is using technology, in the form of webinars, to usher in a new age of trust that embraces the participation of agents, clients and cruise lines. The consortium calls it "collaborative commerce," said Bill Smith, Virtuoso's vice president of cruise sales and exclusive product. "We started talking about collaborative commerce when I joined Virtuoso last June," said Smith, a former longtime vice president of sales and marketing at Crystal Cruises. "It's about bringing the supplier, the adviser and the client together. For example, Virtuoso had a very successful live webinar with Oceania executives and agents, and our agents invited their clients to participate as well. We've been doing these collaborative commerce events for about the last six months." The goal, he said, is a three-way dialogue. "We didn't even talk about price in the webinar," he said. "It was all about the product. And I believe that the event wouldn't have happened if the cruise line's relationship with the agent distribution system wasn't as strong as it is." In the case of the Oceania webinar, Smith said, "We generated a ton of business, and I see these collaborative events as an example of how the way we go to market and sell the product is changing." According to Smith, the new technologies that have emerged in recent years are "all about agents and suppliers engaging with each other and with consumers." But technology isn't always a precursor. Virtuoso and Oceania also held a get-together for agents, clients and cruise lines onboard an Oceania ship in Miami. "Our agents brought their clients right onto the ship, and we all sat around with the executives, including Frank Del Rio [chairman and CEO of parent company Prestige Cruise Holdings], and we talked about cruising," Smith recalled. Advances in communication have fostered greater engagement between cruise lines and cruise agents, too, said Andy Stuart, executive vice president of global sales and passenger services for Norwegian Cruise Line. Norwegian's ability to engage with agents on a one-to-one level is better today than it has ever been, Stuart said. "As a brand we've taken this very seriously, we want to capitalize on engaging with agents," he said. "When I moved to the U.S. in 1997 [from Norwegian's U.K. office], our ability to engage was via a business development manager or on the phone, and maybe one or two agents would be comfortable sending an email. But today it's completely different. Our ability to engage one-on-one has absolutely increased dramatically, and there's a great comfort level among executives and agents to engage in this way." These days, Stuart noted, the technologies of engagement include Facebook and other social media platforms, online webinars, sales calls, email and text messaging and so on: "You can just keep going on and on, so I believe the knowledge that runs throughout our organization is broader and deeper than it's ever been, because so many more agents are directly engaging with us." Such interactions, Stuart added, help the line become more aware about what its agent partners are thinking. "We know what's on their minds, and that helps us drive our relationships," he said. "Understanding what they are thinking and being able to bring that to life has created a closer, more relevant relationship with our travel partners." An altered landscapeThe trade didn't always cast a friendly eye on advances in technology. In the mid-1990s, when travel agencies were coming to grips with airline commission cuts, more worrisome news came down the pike: The major cruise lines were building websites that would accept consumer bookings. For retailers who specialized in cruises, this was the Internet's first blatant threat to their businesses. In 1999, CLIA reported that agents were booking more than 95% of all cruises. Today's estimates put the number at roughly 80%. Richard Fain, chairman of Royal Caribbean Cruises Ltd., told agents attending the 1999 conference of the National Association of Cruise Oriented Agencies that they shouldn't become distracted by direct bookings. Calling them "a fact of life," Fain during that meeting said that direct bookings were growing "by an infinitesimal rate and will continue to grow by an infinitesimal rate." A 15% decrease in agency-generated cruise bookings during the course of 13 years might not seem infinitesimal to the average cruise seller, but Fain was right about the trade having to accept the inevitable. And while many longtime agents remain at least mildly chagrined about direct-booking strategies, it appears that most cruise lines have been able to earn and retain the trust of their top producers. "Even up to about six years ago we used to hear a lot about direct marketing," said Vicky Garcia, executive vice president of the home-based franchise network Cruise Planners/American Express. "The cruise lines have not backtracked on going direct, and we realize now that they do have to have a direct-marketing presence, because the fact is that there are consumers out there who simply want to book with the line," Garcia said. "The difference now is that the cruise lines no longer are doing it aggressively, and we aren't worried any more about them going after our clients." Dwain Wall, general manager and senior vice president of CruiseOne and Cruises Inc., agreed. Today, he said, the focus of both the suppliers and the retailers is to "work in concert for a healthy industry." "I know how they feel about us," he said. "The agency channel is important to them, it has a place, but there's also a place for direct, too." After the economic crisis in 2008, Wall noted, "The cruise lines needed to do everything they could to fill their ships. But I know they would prefer to do that through us. They provide support, training, co-op money and compensation. They wouldn't do that if they didn't feel the channel was important." While agents appear to have reached a comfort level with the industry's intentions to direct-book some customers, there are other uses of technology by suppliers that can infuriate frontline retailers. Email promotions to agency clients already booked on cruises, for example, have become an albatross around the neck of many a travel seller. Jean Kuhn, who operates The Travel Lady from her home office in Murrells Inlet, S.C., and has been selling cruises for many years, said the business has changed drastically since email technology came into common use. "I used to embrace technology, but now I've become repelled by it because the cruise lines constantly bombard my clients with email promotions offering lower fares than what I've already booked them," said Kuhn, who is affiliated with the host agency Cruises & Tours Unlimited/Outside Agents, in Jacksonville, Fla. In most cases, the fares she booked still represent the best value for her clients because they include amenities such as onboard credits and airport transfers. But she still must "explain and explain and explain" those differences to clients who question her math every time a new offer hits their inboxes. And sometimes a cruise line will renege on a promised higher commission rate if a booked fare drops below a certain level, which happened recently, Kuhn said. "I have eight couples booked on a luxury line that sent an email to my clients saying the fare had dropped," she said. "The commission rate on the fares I booked was at 20%, 7% more than I usually get from this line. When the fares dropped, I of course had to change them for my clients, and then the line adjusted my commission back to 13%. Now I'm down thousands of dollars." The line's business development manager told Kuhn there was nothing she could do about the change in the pay rate. "The problem," Kuhn said, "is that with this kind of constant communication between a cruise line and my clients, I have to keep going back over and over again, touching that reservation, and end up with less money. It makes me angry, because we're still the ones filling most of the cabins." An 'aha moment'Despite the day-to-day challenges on the part of both retailers and suppliers, the perceived value of the agency distribution channel by cruise line executives took a big step forward after Jan. 13, the day that Costa Cruises' Costa Concordia capsized off the Italian coast, an incident that killed 32 people. Cruise lines pulled their advertising and retreated into the shadows, allowing their trade association, CLIA, to face the public. In the days and weeks that followed the disaster, frontline travel sellers faced their own public, in the form of scores of clients who either were booked on cruises and became anxious about their upcoming trips, or who were considering putting down a deposit but now had lots of questions about cruise safety. Travel sellers couldn't simply refer clients to the CLIA website and hope for the best. They recited safety facts and figures, and they tried to assuage their customers' worries, one client at a time. The strategy worked; the numbers of cancellations industrywide after the Concordia event were miniscule relative to existing reservations. Fast forward to early March, when the presidents of the major cruise lines enthusiastically endorsed the travel agency distribution channel during a panel discussion at Cruise Shipping Miami. "In the last couple of months, agents have demonstrated their value to the industry," said Gerry Cahill, president and CEO of Carnival Cruise Lines. "They've been great advocates, and it's great to have a third party speaking on your behalf." Cahill was responding to a question by the panel moderator, CLIA President and CEO Christine Duffy, who had asked the presidents what role travel agents would play in the cruise industry in coming years. Norwegian Cruise Line President and CEO Kevin Sheehan called agents the "lifeblood of the industry," and predicted they would remain so. Each of the executives on the panel took a turn praising the agency channel for its efforts following the Concordia accident. The discussion was an unusual topic for the conference, which is not an agent-focused event. To some in the audience, it seemed a sincere verbalization of a revitalized long-term commitment to the trade. "I definitely saw it as an 'aha moment,'" said Cruise Planners' Garcia, who was in the audience. "It truly hit them: How would they have gotten through that event without agents talking to customers about it and helping the cruise lines through it?" CruiseOne's Wall said that such a display by the executives is rare. "It's really unusual for senior-level people to have those kinds of conversations in a public format like that," he said. "I've heard it in meetings, but not at a major conference that's not heavily attended by agents. It was an open conversation on stage, and I think that what they all said was very well deserved." CLIA's Duffy noted that while the travel agency community has been the industry's dominant distribution channel to consumers, "they are also extraordinarily effective third-party advocates for the cruise industry." The cruise lines' relationships with agents are "critically important" for spreading awareness to an "ever-increasing global audience," she said. The agent-as-advocate comments by Cahill and others on the panel in Miami tie in to another fairly recent, and subtle, change in the supplier-seller relationship: The switch to "partner" vs. "agent" when cruise line officials refer to the retail trade. Norwegian Cruise Line last year rolled out a multifaceted trade campaign titled Partners First, and executives vowed that processes and policies would be "put under the Partners First lens," meaning they planned to consult more often with the people who book the majority of their cabins. Norwegian is the only line that uses the word "partner" in the name of its trade campaign, but one is hard-pressed today to find any cruise line executive who doesn't routinely substitute "partner" for "agent" when discussing the distribution channel. For cruise news and updates, follow Donna Tunney on Twitter @dttravelweekly. At-home agents get more respectAfter the events of 9/11 upended the travel trade community, scores of retailers whose traditional agencies failed, merged or were sold decided to go it alone, adding thousands to the ranks of home-based travel sellers. In recent years, cruise and other suppliers have paid more attention to professional home-based agents who persevered through the last decade. Today, they routinely provide support and marketing tools to this fast-growing segment. According to Cruise Planners Executive Vice President Vicky Garcia, "The lines all have business development managers, but for a long time they never would support our home-based agents except by phone." Only "certain levels of production" would result in one-on-one meetings, she recalled. But that's changed. "Today," she said, "the lines have assigned someone to work with home-based agents: local business development managers. Even our brand new franchise owners immediately have local representation from Royal Caribbean International. It speaks volumes to their commitment." Garcia said Norwegian Cruise Line and Carnival Cruise Lines also are supportive of home-based retailers and will make contact with them on "day one." Royal is the most aggressive, she said, providing in-person communication with each home-based agent. Garcia said that Vicki Freed, Royal's senior vice president of sales and trade support, "comes to every one of our new franchise training sessions. To me, that shows a serious level of commitment. And that didn't used to be the case." -- D.T.