AMELIA ISLAND, Fla. -- The cruise industry is doing
exceptionally well, said Norwegian Cruise Line Holdings
CEO Frank Del Rio, but advisers should take steps to prepare now in case
the U.S. is close to another recession.
While the current "Goldilocks economy" is a boon
for cruise lines and advisers alike, it won't last forever, Del Rio said in an
address to agents at the Signature Travel Network 2018 Owners' Meeting at the
Ritz-Carlton here on Friday.
He encouraged agents to maximize repeat business, emphasize
value and not price, prepare to reorganize resources and ensure databases are
Del Rio also urged agents to target millennials. Baby
boomers are cruise lines' bread and butter today, but the influence of
millennials will continue to grow.
The cruise industry today is benefiting from
unprecedentedly strong demand and record booking volume, Del Rio said. Customers
are booking earlier than ever and the cruise lines have strong pricing power.
Del Rio said Oceania Cruises and Regent Seven Seas Cruises plan
to raise prices on their 2019 sailings as of Oct. 1. Oceania will raise prices
on 67% of all 2019 sailings, and Regent will raise prices on 92%, he said.
He attributed the cruise industry's good fortune to a high
level of global consumer confidence, low unemployment, rising wages, record-high
stock market values and low interest rates. Also, President Trump's tax cuts
have helped the economy, and there has been very little negative impact of
geopolitical events on travel in recent months.
There is also a high level of consumer satisfaction with
cruise lines, Del Rio said. Cruise lines are investing millions of dollars to
renovate ships and spending a lot of money marketing their product.
Del Rio urged agents to capitalize on the strong economic
environment by selling product from suppliers that pay them the highest
commission. He also urged them to book clients well in advance; many advisers are
selling 2020 and 2021 sailings.
"Consumers are making a bet today on the future,"
Del Rio said. "As the booking curve elongates, they're making a bet even
further into the future."