Agents: Norwegian's new rewards will promote affinity bookings

Norwegian Cruise Line raised the rewards for agents booking affinity groups by lowering the number of cabins they are required to sell in order to qualify for complimentary berths.

The new threshold will be 14 berths booked, or seven cabins, rather than the traditional level of 16 berths or eight cabins. The move has the potential to redefine what constitutes a group.

In addition, Norwegian's new program enables agents to pick from a menu of options, one of which is two complimentary berths, or tour conductor credits, for every 14 guests.

"I don't think I've seen that in the industry as a standard in a group program," Norwegian President Andy Stuart stated in a monthly webinar for agents in which he detailed the program.

"So 2-for-14 is one of your choices," Stuart said. "If that's the choice that works for you, you can pick that one."

A second menu option grants a tour conductor credit for every 14 full-fare berths sold, plus the choice of either an Ultimate Beverage Package or prepaid gratuities for each group member.

The third choice involves a tour conductor credit for 14 berths, plus any two amenities from a list of eight that includes items such as an Internet package, shore excursion credits, a donation to the group's charity or a cocktail party.

The program takes effect for booking starting Dec. 1 for cruises that depart Jan. 1 or after.

Norwegian stressed that the program is only for affinity groups and not for promotional or spec groups.

"We are a huge fan of affinity groups," Stuart said in the webinar. "They book early. They materialize at a high level. They bring a lot of new people in to experience our product."

Other cruise lines have reduced the threshold for qualifying groups in a more limited way, either for certain sailings or for a limited period of time as a promotion.

Carnival Cruise Line, for example, in October ran a promotion that provides a 1-for-10 tour conductor credit. The program applied to select cruises departing March 1, 2016, through April 30, 2017.

Carnival also has a list of about 140 cruises, mostly three- or four-day sailings, for which a 1-to-8 standard applies.

Adolfo Perez, vice president for trade sales and marketing at Carnival, said such promotions are typically focused around the highest group booking seasons and have a big impact on agent support for developing affinity business.

Several agents said Norwegian's new program would encourage them to book affinity groups with that line.

"It's one or two less cabins that defines the group," said Marianne Delulio, owner of Just Travelin' in Mohegan Lake, N.Y. "It makes it easier for us to promote Norwegian as a cruise line, so that's an edge up that they might have over competitors."

Stacey Minton, co-owner of a Cruise Planners franchise in Piscataway, N.J., said she appreciated the options that the program offers.

"Being able to add the beverage package is a huge selling point," Minton said. We have booked a couple of groups based solely on that promotion, so to be able to offer it to all of our groups going forward kind of sweetens the pot."

In an instant poll conducted during the Norwegian webinar, 44% of agents who responded said they favored the 1-for-14 tour conductor credit and beverage package/gratuity option, while 38% opted for the 1-for-14 option plus the menu of eight choices, and 20% favored the 2-for-14 plan.

"That's consistent with our network," said Drew Daley, general manager of network engagement and performance at CruiseOne/Cruises Inc., which is headquartered in Fort Lauderdale.

Daly predicted that the Norwegian program would be "transformative."

"The normal education for the agent was 1-for-16, and the 16th person cruises for free," he said. "Well, now Norwegian has completely changed the game."

Daly said that with the moves, Norwegian is looking to increase its market share in a segment that appeals to all cruise lines, which, he said, "are definitely recognizing the value of affinity group business overall."

He said that affinity group business at CruiseOne/Cruises Inc. was up double digits, year over year, in 2015, adding that agents at the grass-roots level, socializing in their communities, are seeing possibilities for putting groups together.

Daly also said a new group registration function on the network's website made it faster and easier to promote groups. The sites offer each group a unique web address and custom content.

"We've seen very impressive results from that," Daly said.

Norwegian said it qualifies groups submitted for affinity benefits by requiring a $50 deposit for each group member, which is not required of speculative groups. It also relies on regional business development managers to qualify the groups and will measure materialization of the groups "and use that historical data to qualify in the future."

Norwegian changed two other features of the affinity program. It raised the number of cabins that can be put on hold for affinity groups from 99 to 199 and will guarantee that amenities that are offered will continue for the life of the cruise.

"You can promote with absolute certainty that that amenity is available," Stuart said.

Other terms of the deal call for deposits within 60 days of booking, a recall of space at 120 days prior to sailing, and final payment 75 days prior to sailing.

"We're going to be offering a very, very rich, attractive program, and we're going to ask you to commit," Stuart said. "It's not a program where everyone holds space across every ship and every sailing date."