Costa Cruises is rolling out incentives for agents to embrace its new partnership with Central Holidays, a pairing it hopes will lead to new sales in the Americas.
Costa said it plans to make $100 American Express gift cards available for initial bookings of Costa Cruise Tours, the product that is being packaged by Central Holidays for Costa in Europe.
The packages typically bundle a three-night stay in port and various day activities with a seven-night cruise. Costa said the entry-level price on a 10-night cruise tour will be $1,492.
The cruise tours will be offered on two of Costa’s newest ships, the Diadema and Fascinosa, and from four Mediterranean ports: Barcelona, Marseille, Savona and Civitavecchia.
Scott Knutson, Costa’s vice president for sales and marketing, North America, said an attractive price, some of Costa’s newest hardware and Central Holidays’ long experience in Italy are some of the reasons travelers will want to take a look at the offering.
“Travel agents will benefit from a one-stop, go-to combination of cruise, hotels, tours, meals and transfers, all bundled into a commissionable package,” Knutson told reporters in a phone briefing.
Based in Moonachie, N.J., Central Holidays is a tour operator that for more than 40 years has specialized in Europe in general and the Mediterranean in particular. It has preferred-supplier relationships with almost every agent consortium and group in North America.
That footprint should help Costa leverage its presence in North America, where other cruise lines have larger field sales forces.
“Central Holidays’ relationship with cruise agencies and large consortiums is really going to expand our reach,” Knutson said. “They have such strong relationships with just about everybody in the trade.”
For its part, Central Holidays hopes the partnership will provide entry into some cruise-only agencies it hasn’t penetrated in the past, said Central Holidays CEO Gianni Miradoli.
The two companies will launch a road tour for agents in 24 cities in the first part of next year, appear jointly at trade shows and consumer events and cross-market using each other’s customer databases.
Beyond individual gift cards, select organizations will get incentive commission levels to launch the new product, Miradoli said.
Commissions will run from 10% to 15% of the entire price of the cruise tour, depending on volume, with some top-level producers qualifying for a 17% rate, Miradoli said.
The commissions will be paid by Central Holidays. But even though Costa won’t be paying agents directly, Knutson said Costa will recognize the cruise portion of the package revenue as part of the travel agent’s overall Costa production, so it will count toward meeting Costa targets for purposes of reaching new commission tiers, he said.
Other cruise lines also offer cruise tours in Europe. Norwegian Cruise Line, for example, has them on two ships sailing in the Mediterranean and one in the Baltic/North Sea market.
An 11-night cruise tour that includes four nights in Rome with tours of the Vatican plus a seven-night cruise on Norwegian Epic starts at $1,629.
Genoa-based Costa’s cruises are heavily populated by Europeans, so by pairing with Central Holidays it hopes to boost its appeal to travelers searching for an authentic European experience, Knutson said.
The cruise tours are being offered only in North America and select other markets in the Western Hemisphere, such as Colombia and Venezuela, he said.
About 85% of North Americans buying a Costa European cruise already make some kind of pre- or post-cruise hotel booking in conjunction with the cruise, Knutson said.
Air is available as an add-on to the cruise tour package. Miradoli said that if the air can be booked with an airline that has a contract with Central Holidays it can pay a 5% commission, but if the airline is not under contract then no commission will be paid on air.
It is somewhat unusual for a cruise line to partner with a tour operator that could be considered a quasi-competitor in the vacation market.
Other lines have either acquired tour infrastructure, such as Holland America Line’s purchase of Westours, or built their own.
“We looked at that and said, why do that when we can partner with an expert?” Knutson said. “They do what they do best, we’ll do what we do best. You put the two together, and we think it’s going to be powerful.”
Knutson said there are internal targets for the amount of incremental business the cruise tours will generate, but he declined to say what they are. “We think there’s enormous potential, but we don’t have a number,” he said.