To counter the chilling effect that high European airfares can have on European cruise sales, both cruise lines and travel sellers have begun bundling air into the cost of a European cruise package.
Most cruise lines are adding air only to select cruises or on specific dates, but in those cases, they said, they are finding it a highly effective way to get vacillating consumers off the fence and onto their ships.
Travel agencies are doing the same, often using blocked group space, adding in negotiated air and other amenities, then booking individuals into the group spaces.
It’s important to note, however, that this trend does not represent a return to past practices. While cruise lines might continue to bundle air into the price of some cruises in a targeted way, they feel no pressure to return to the practices of a generation ago, when 80% of cruise sales were air/sea packages.
That’s due in part to the fact that an increase in the number of homeports has enabled many cruise passengers to drive to their port of embarkation. In addition, many consumers now get to their port by using frequent flyer miles.
Dondra Ritzenthaler, senior vice president of sales for Celebrity Cruises, said the line started adding air to some cruise offerings after travel agencies asked them to.
Celebrity offered a European cruise starting at $1,889 out of more than 50 gateways in the U.S. and included a 5% commission on the air. Sales spiked on the dates Celebrity offered those cruises. Consumers were saving as much as $500 on air through the offer.
Celebrity worked with its airline partners to get good fares, and in some instances it subsidized the air.
“It really did give us the traction we needed in the European marketplace,” Ritzenthaler said.
While Celebrity probably will make such offers again in a highly targeted fashion, it will not do it on an ongoing basis. Bundling air will be considered only when consumers perceive fares as an obstacle or when it could help to fill a particular sailing.
Silversea Cruises’ Shore Amore promotion, which bundled business-class air, hotel stays and unique shore excursions into the cost of a cruise, had phones ringing off the hook, according to Ellen Bettridge, the line’s president of the Americas.
Luis Zuniga, vice president of marketing and communications for CruiseOne and Cruises Inc., said cruise lines are using these offers more this year than in recent years, in part because they have more product in Europe. That’s because Europeans are starting to embrace cruising, but at the same time, the current eurozone crisis means Europeans are traveling less, making the U.S. market more important.
A wide variety of cruise lines are bundling air into their pricing.
Carnival has air-inclusive deals on some European sailings between Aug. 26 and Oct. 25 out of several gateways, with rates starting at $1,099.
Seabourn has bundled fares into the price of its cruises occasionally. The line said the effectiveness of bundling depends on the where the ship is sailing and the time of year.
But it’s an infrequent practice, since many of Seabourn’s passengers use miles for air. Still, Seabourn has found offering contracted air at an attractive price to be an effective marketing tool.
Compagnie du Ponant, the luxury yacht operator, is now including airfares with some of its itineraries, as well.
‘Stuck’ on the air price
Royal Caribbean International has a rotating menu of offers designed to coax customers off the fence, and discounting air is among them.
Consumers feel a disconnect when they pay $499 for a seven-night cruise and $1,500 for the eight-hour flight delivering them to that cruise, said Vicki Freed, Royal Caribbean’s senior vice president for sales and trade support. But give it a single price of $1,999 and it sounds like a good deal.
“The consumer gets stuck on the air price,” Freed said.
Lindsay Monell Hardy, an owner of a Travel Leaders agency in Palm Coast, Fla., agreed with that assertion, recalling that one of her clients simply refused to pay for an airfare that cost far more than the cruise itself.
Freed said that consumers today are trained to look for some kind of value-add.
One cruise company has institutionalized bundling air into the cost of its cruises. Prestige Cruise Holdings, which owns Oceania Cruises and Regent Seven Seas Cruises, has offered free air on Oceania for nearly a decade and now is offering it with Regent, as well.
But it’s easier for a smaller line with a handful of ships to bundle air than it is for a big cruise line with dozens of ships, some of which can hold up to 6,000 passengers.
Kate Rosevear, owner and president of a Travel Leaders agency in Plymouth, Mich., said that Oceania’s discounted airfares have brought premium cruising down to mass-market pricing, making it easy for her to move her clients from the high end of a mass-market line to a high-end line.
Discounted air has saved her clients as much as $1,000 on a Pacific cruise and brought European fares down from $1,500 to $600.
Beyond the cruise lines’ air promotions, some agents are doing their own packaging. Hardy, whose client balked at paying more for air than for a cruise, said that her agency negotiates group fares with airlines, packages that fare with group space and then sells individuals into the group. She currently has six clients on a waiting list for one group.
CruiseOne and Cruises Inc. sometimes bundle air into the price but usually sell it separately. They work with ISS GMT Global Marine Travel, whose fares are sometimes less than published fares and include a next-port guarantee if a passenger’s flight is delayed.
Cruise lines also work to make booking air easy for agents and their clients and also offer a next-port guarantee.
For example, Royal Caribbean International and Celebrity’s Choice Air program basically scrape the Internet for airfares and offer some negotiated rates that at times can beat published fares.
These fares match what consumers could get if they booked their tickets with online travel agencies, metasearch sites or directly with the airlines.
The important value-add, however, is that only the cruise lines and cruise sellers who bundle air protect consumers with next-port guarantees.
Among the other cruise lines offering bundled-air convenience are Holland America Line, with its Home City Air program; Norwegian Cruise Line, whose fares offer more flexibility than Internet rates (the line also plans to enhance its air program); and Carnival Cruise Lines, which offers passengers both published and contracted airfares with a next-port guarantee.
Follow Kate Rice on Twitter @krtravelweekly.