One of the themes during the CLIA State of the Industry press conference last week was the declaration that "passengers are at the helm." It was another way of saying that cruise lines are listening carefully to guest feedback and working hard to deliver what clients say they want. Examples cited included improved WiFi and an emphasis on dining options.
The conference was on a Monday, and indeed, the balance of the week saw even more announcements related to food and WiFi on cruise ships. And I don't doubt that, as line representatives asserted, these are a direct response to expressed customer preferences.
Every business, of course, wants to please its audience, but looking at all the information shared at the State of the Industry event, I think -- and I never thought I'd say this -- the lines are being too modest. They are sharing more credit with passengers for steering their course than is merited.
We are witnessing an unprecedented era of cruise line creativity. Yes, guest surveys can provide directional guidance for entertainment, food options, itinerary pacing and shore excursions, but how those preferences are translated into experience shows that the lines are not only setting the course, but that it is a course of exploration bordering on the expeditionary.
It doesn't seem that long ago that the cruise experience was homogenous enough that most ships could neatly fit into one of three categories: mass market (called "contemporary," for reasons I never completely understood), premium and luxury. The exoskeleton and paint on various brands' ships differed enough that you could know its fleet by its profile, and amenity levels shifted to stay true to their class, but the brand distinctions, with a few notable exceptions, seemed to rely on how well they executed variations on a theme within their categories.
And when someone did truly innovate, an iteration of a new and popular attribute would soon be rolled out by competitors, meaning that differentiation seemed to occur only in increments along a shared continuum.
Cruising grew more than expected last year, but not because the lines looked at CLIA consumer preference surveys and gave passengers exactly what they asked for. Rather, I think it's because they looked at the data and recognized that growth can be fueled in myriad ways that are cumulatively additive.
On one hand, an almost infinite variety of consumer enthusiasms and niches were exploited through sailing-specific thematic programming (MSC has mastered this), and on the other hand bold features got consumers' attention in part because their presence was so unexpected on a cruise ship (simulated skydiving?).
Carnival Cruise Line's chief marketing officer, Jim Berra, summed it up well by saying, "We've been very thoughtful about leveraging experiences ... in ways that are differentiated and tailored."
Driving their strategies is, in part, a peculiarity of the cruise industry that is both an attribute and a challenge: the high percentage (68%) of guests who are repeat cruisers. Carnival Corp. CEO Arnold Donald has made enticing the "new to cruise" passenger a high priority for his brands, and Berra said initiatives like Carnival Live are designed to lure new clients and then hook them on cruising.
The high repeat factor means the lifetime value of a cruiser is extraordinary once you get someone onboard, but there is keen awareness that the low-hanging fruit (in North America, at any rate) was picked long ago. The creativity we're seeing reflects the need for taller ladders.
Overall, diversification of offerings and complexity in product should be good news for travel agents, from both the standpoints of client and supplier relationships. The lines need ambassadors who can explain the differences among the brands and qualify clients accordingly.
Nonetheless, the percentage of bookings that has come through travel agents has fallen since the recession.
According to a "Profile of the U.S. Cruise Industry," which appears to have been posted on the CLIA website in 2010, travel agents still accounted for 90% of cruise bookings in 2009. Last week, it was reported that travel agents accounted for 70% in 2014. This is the first year that Canadians were included in CLIA consumer surveys, but it's unlikely that this difference alone could account for a 20% drop in five years.
In other words, yikes!
CLIA re-emphasized its commitment to agents during its press conference, and the actions of the individual lines in the days that followed demonstrated continuing commitment to the channel, with Norwegian boosting its agent-facing sales force by 40%.
But it's worth noting that there was only a 1% difference in perception of service quality between those who booked with travel agents vs. direct bookings. That isn't great news for agents, although the 35% who prefer agent service are a significant enough block of business that cruise lines will continue to put considerable resources against agent distribution.
A bigger problem for agents might be seen in the final stat on the last page of the just-released North American Cruise Market Profile: 47% of passengers believe that the best prices for cruise lines are provided by websites and online travel retailers, and 30% believe they'll get the best price from the cruise lines directly. Only 19% think the best prices can be obtained through their human travel adviser.
While that might not be an accurate reflection of cruise pricing, it is an accurate reflection of what consumers believe about online purchasing in general.
Which circles back to why cruise marketers might want to listen to what consumers have to say but don't necessarily want to let them onto the bridge. A good helmsman knows that incoming data are subject to interpretation and that current conditions cannot adequately prepare you for tomorrow's weather.