Direct bookings rise, but cruise execs still want travel advisors' business

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Johanna Jainchill
Johanna Jainchill

After a recent visit to Miami, Robin Farley, a cruise analyst for UBS, came back with several interesting insights after meeting with representatives from both the largest cruise lines and cruise sellers.  

Among them: Direct bookings have increased significantly since the pandemic. Farley is not the first to notice this; the CEOs of both Royal Caribbean Group and Norwegian Cruise Line Holdings (NCLH) said as much last fall, and recent numbers from GlobalData indicate it's a continuing trend.

Farley's conversations indicate that the shift is due to passengers becoming more comfortable booking digitally with cruise lines, and because some travel agencies didn't survive the last two years. In addition, some consumers may be more comfortable dealing directly with the suppliers when it comes to future cruise credits.

As a Wall Street analyst, she said this reduction in agent commissions would benefit cruise lines yields. But NCLH reminded her that those gains would be offset by higher expenses from the cost of handling the increase in direct bookings, while still net positive.

Maybe that was CEO Frank Del Rio, who told analysts in October that NCLH hopes the travel agent community "comes back in full force. We prefer the travel agency channel."

Cruise lines have long said that the internet is good at producing more of the lower-cost, less complicated bookings. But it's travel advisors who tend to bring in the premium, higher-end bookings. And very importantly, as cruise executives often say, a travel advisor can help put the right person on the right product, which is more likely lead to a satisfied and loyal customer.

Farley surmised that some of that direct business may pull "back a bit when travel normalizes," but she reported that "all conversations she had indicate direct business will remain higher than pre-pandemic levels.

But as Richard Fain, then-CEO of Royal Caribbean Group, said in a message to advisors last fall, online bookings may be attractive to the company, and many people will continue to buy that way, he was clear: "We need you, our travel partners, to reach our full potential."

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