In the wake of airline commission cuts, does charting a new
course with heavy emphasis on cruise vacations offer your agency a
viable opportunity to significantly increase profit? Cruise Lines
International Association and many retailers think so.
It seems that everywhere we turn these days, someone is telling
us to bound up the gangway and concentrate our efforts on cruise
sales. Many factors indicate this can be good advice.
For most vacationers, a cruise is an enjoyable experience and,
when clients are matched with the cruise product best suited to
their needs and preferences, customer satisfaction is high.
Because cruises are relatively high-ticket products, the
commission yield can be considerably more than that from airline
tickets and some other travel products.
Besides, cruising is very visible these days. Cruise lines
aggressively market to consumers, ships pop up as venues for movies
(including "Titanic," of course) and many advertisements for other,
nontravel-related products seem to have a cruise theme.
A relatively small percentage of the total U.S. population has
ever taken a cruise, so, CLIA asserts, there should be a vast,
The cruise industry is rushing to increase inventory by putting
attractive new ships into the market, and it is offering a wide
variety of intriguing itineraries.
Finally, cruise lines are working to provide onboard features,
programs and amenities that ensure there is a cruise experience
that will please almost any vacationer.
So, are cruises the wave of the future for your agency? It may
be wise to test the water -- with a few questions, below -- before
plunging headlong off the pier.
Retailers of all stripes increasingly are focusing on cruises
and aggressively promoting themselves as cruise experts. Many
others are well established as cruise specialists, both locally and
nationally. Similarly, many of them also have Web sites and other
electronic means of communication. That same Internet technology
will allow cruise lines to compete directly with retailers for the
attention and the dollars of potential cruise passengers.
If you're thinking of shifting your focus to cruises, you will
want to explore several issues in order to determine your agency's
potential for replacing lost airline commissions with profit from
cruises. Therefore, ask yourself these questions:If many current clients have never cruised, would they be
intrigued by the idea? These are loyal clients who trust your
judgment and advice. If they decide to take a cruise and enjoy it,
they will buy other cruises and they will tell their friends, who
also may buy cruises from you.Looking beyond your own clients, in your market, could you sell
enough cruises at prices and commission levels that would produce
an acceptable return on your investment in training and promotional
activities?Are there forces at work in your marketplace that will either
assist or challenge you if you try to create incremental demand for
cruises and for your agency's services?Take a close look at the demographics of your market. What is
the population breakdown in terms of age groups, income levels,
household size and composition, religious and ethnic groups,
etc.?Are there segments, such as families, retired individuals,
well-compensated middle managers and executives, etc., who might
offer better potential than others? Are there enough people in
those segments to offer you the prospect of substantial cruise
sales?What about the psychographics in your market? By that we mean,
what values, attitudes and beliefs are commonly held?How do your target consumers spend their leisure time? What
causes do they support and to what organizations do they belong?
How might their lifestyles be defined in terms of stresses and the
use of time, the value placed on material possessions and focus on
the needs of adults and/or children? How is status defined and what
role does it play?
If you understand the demographics and psychographics in your
market, you can determine if you should focus on cruises. If the
answer is yes, these factors also will help you choose your target
audience, determine what products are most likely to sell and
construct a realistic, cost-effective marketing plan.
You need some understanding of what your prospects are likely to
seek in a vacation experience, the probable length of the vacations
that they will take and what might motivate their vacation purchase
decisions. For example, if your research indicates they may prefer
three- and four-day vacations over longer vacations, you will
obviously have to sell more short cruises to reach the profit level
that seven-day cruises would produce. Clearly, customers who can
and will buy deluxe cruises will be more lucrative for the agency
than those who are extremely price conscious.
We return here to a constant refrain: Does what you know about
these issues suggest you can sell cruises at a reasonable
In another batch of questions, let's consider the
competition:How do your target consumers spend their disposable dollars?
What other types of businesses are in direct competition with you
for those dollars? Certainly, car dealerships, jewelry stores,
clothing stores, restaurants and furniture stores are competing
with you for discretionary purchases.What might your agency have to do to convince consumers to buy
a cruise rather than a car or a new sofa?Are other agencies in your area competing on the basis of price
or superior knowledge or outstanding service or something else? If
price marketing and rebating seem to be rampant, factor the cost of
being price competitive into the potential for true profit.If you are just beginning to focus on cruises, can you compete
on the basis of price with more established agencies that might be
receiving higher commissions from which they can rebate? Keep in
mind that recently several major cruise lines announced they will
move to tiered commission structures, with overrides above 10%
based on higher productivity.If repeat cruisers in your area are focused on getting the best
discount, an alternative for you is focusing on the large part of
the population that has not cruised, but what would be the
incremental promotional costs of taking the cruise vacation message
to first-timers? Selling them cruises will be more difficult than
working with repeaters because they must be convinced of the
benefits of a cruise vacation.If the competition promotes its superior knowledge and
expertise, how will your agency get up to speed? This could be
daunting, and how and where to gain this knowledge becomes an
A focus on cruise vacations can be very lucrative if you
approach it intelligently, but a simple "me too" approach to
marketing cruises in a crowded marketplace will probably not
produce a satisfactory result. If you do your homework you have an
excellent opportunity for success. This means:Take the time to truly understand your market.Carefully target the candidates who offer the best prospects
for cruise sales and profits.Seek niches where customer needs are not already being well
addressed or that offer opportunities to create significant
incremental demand for cruises and its own services.Studiously evaluate cruise products and promote only those most
likely to please the target audience.Educate your staff to be conversant with those products.Create a marketing plan, one that allows you to produce a
profit on every transaction.Constantly monitor consumer trends and cruise industry
developments and then adjust your marketing plan accordingly.
Dale Eyerly Colson is president of Travelstar Inc., in
Westport, Conn., a full-service agency that has specialized in
cruise vacations since 1970. She has prepared and presented
cruise-related educational programs for ASTA, ARTA, Nacoa and other
educational forums for the trade.