CruiseOne and Cruises Inc.: We'll pay customer deposits

By Johanna Jainchill
CruiseOne, Cruises Inc. adIn what it says is an unprecedented move, CruiseOne and Cruises Inc. will front customers' cruise deposits for bookings made during the rest of February, and possibly beyond.

The "Advanced Deposit (Buy Now, Pay Later) Promotion" runs from Feb. 6 to 29, effectively enabling CruiseOne and Cruises Inc. franchises and agents to book clients with "no money down."

The customers will then pay back the deposit when they make their final cruise payment.

Dwain Wall, senior vice president and general manager of CruiseOne and Cruises Inc., said the program is expected to increase bookings by removing an "impediment to people making the decision to book."

If the results are good enough, the company might extend it.

"Our hopes are that it's hugely successful and that we can extend it," Wall said. "We don't want to do it until we truly see that it's driving additional business."

Since most clients book an average of six months out and final payment is due 90 days out, said Luis Zuniga, CruiseOne and Cruises Inc.'s vice president of marketing, the program is like giving customers "a three-month, interest-free loan."

The deposit is capped at $500 per cabin, which Wall said was generally the most a cruise deposit would be. The promotion does not apply to group sales, usually eight cabins or more, or river cruises.

Wall acknowledged that the program would cost CruiseOne and Cruises Inc. millions of dollars to support.

He said it was worth it to stimulate bookings.

"Nobody else is doing this," Wall said. "It takes significant capital to fund something like this. To us it's a great competitive advantage. We know that people shop a lot; when customers get to [our agents], they will be able to tell them something that nobody else has said: 'We'll advance your deposit on your behalf.'"

Amber Blecker, a Cruise-One franchise owner in Aurora, Colo., said that booking travel this time of year always represents a challenge for customers facing holiday debt.

Having to pay a deposit, along with considering the cost of airline tickets if necessary, can make it difficult to commit to a cruise this time of year, she said. That means consumers miss out on the plethora of good Wave season incentives from the cruise lines.

Amber BleckerWith the new promotion, Blecker said, "they know they can make the decision that is right for them without being worried about paying a deposit on top of their Christmas credit card bills."

Blecker said she thought the program might bring more agents over to CruiseOne and Cruises Inc. by offering a program that represents "out-of-the-box thinking, of new ways to help people to cruise right now.

"For the industry internally it's all about the agent support and how can a company help you build your business," she said. "A company like ours is about the individual business and about us building relationships with our clients, and this is a tool that we can go out to our existing client base and say, 'I know things are tough, but here's something that may help you book earlier and book smarter.'"

Promotions that offer reduced deposits are not uncommon from cruise lines. And during the peak of the economic downturn, many lines even waived deposits altogether.

Blecker said that in her experience, when cruise lines waive or reduce deposits, "it definitely spurs bookings."

Jack Mannix, a travel industry consultant and former president of Ensemble Travel Group, said that while he doubted anyone booked a cruise solely because the deposit was waived, it might get people who were "on the fence" to go ahead with a booking. In addition, it may help the cruise lines get more early bookings.

"By reducing or eliminating deposits, it may help the customer to go ahead and book sooner," Mannix said. Referring to the number of deposits that "wash," or don't stick all the way to final payment, he said, "Assuming the wash rate doesn't change, the cruise line puts more business on the books sooner."

Although he wouldn't speculate about the effectiveness of this particular campaign, Zuniga said that promotions in general work well. He said "our sales were up significantly" in response to company promotions held last year, such as offering onboard credit and a free shore excursion.

Zuniga said the company would heavily market the promotion to consumers through email blasts and through social marketing, on its Facebook page and its website, as well as through paid search.

Follow Johanna Jainchill on Twitter @jjainchilltw. 
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