Carnival Cruise Lines is de-emphasizing its direct-to-consumer sales channel this year following the departure of two key executives, Carnival Corp. CEO Micky Arison said on Thursday during the company's earnings call.
"Two of Carnival's senior sales and marketing executives, who were clearly the most aggressive in growing Carnival Cruise Lines' [personal vacation planning] and direct business, left the company," Arison said. "One went to Royal Caribbean, and one went to NCL."
Arison was referring Bob Becker, now a senior vice president at Norwegian Cruise Line, and Vicki Freed, now in the top sales position at Royal Caribbean International. Both executives left Carnival early this year.
Arison lauded Carnival Cruise Lines CEO Gerry Cahill and his team for deciding to sell more cruises through the travel agent channel. The result has been decreased general and administrative expenses and improved yields, said Arison. Cahill took over for longtime CEO Bob Dickinson, who retired last November.
"Gerry and his team ... have really revaluated the [direct sales] program, and the fact is that they have significantly reduced the business from that program," Arison said. "The result is and will be, at least for the time being, less direct business."
Arison would not say what percentage of sales are made direct. Carnival said after the call that direct sales have "decreased fairly significantly" since 2007.
"The travel agent distribution system has been an effective and efficient distribution system for this company for 35 years, and it got us to where we are," Arison said. "We clearly believe that we need to continue to support them. They have shown this year that they can give us the yield improvements we need to overcome these higher fuel costs."
Royal Caribbean President and CEO Adam Goldstein responded to Arison's comments on behalf of Freed.
"It's unfortunate and unusual for one company to single out another company's employee to make a point," he wrote in an e-mail. "We recruited Vicki Freed to further strengthen our excellent relationship with the travel agency community. We are extremely fortunate to be the beneficiaries of her three decades of building incredible relationships with travel agents."