Cruise Holidays, the cruise-only franchise
network, demonstrated its considerable muscle when it gathered
eight current cruise line presidents, several who flew into Miami
just for the event, for an audience of 130 Cruise Holidays
Holding its 2006
annual convention in the cruise industry's backyard, downtown
Miami, also helped; it is usually held on a cruise ship over
several days, which doesn't enable the head honchos to duck in and
"That's why we
did it on land," said Roger Block, executive vice president of the
Carlson Travel Franchise Group, Cruise Holiday's parent company.
"You can't get this level of participation on a ship; 100% of the
invitees showed up."
Many groups could
never get this level of participation. Cruise Holidays calls itself
the largest cruise-specialty franchise network in North America and
said it sells more cruises than any travel network with the
exception National Leisure Group.
"The reason [the
executives] come is because of the support we give them day in and
day out," said Peter Thomson, Cruise Holidays' vice president and
Block, who also
moderated the panel, did not let the opportunity go to waste. Many
of the franchise owners in attendance later said he raised
important issues, even if the executives skirted some of them or,
as per Securities and Exchange Commission rules, couldn't address
He asked the
executives what was going on with yields and what the future held
for pricing. He also asked about the perception among cruise
sellers that the rate of non-commissionable fees, or NCFs, is
But not all the
questions put the executives on the hot seat: Block also asked them
to give the cruise sellers tips on improving
As usual, the
pricing question drew several "no comments" from the public
companies, in addition to the now quarterly echo that, yes, the
Caribbean is soft, and, yes, Alaska and Europe are strong. But Adam
Goldstein, president of Royal Caribbean International, cautioned
Block that he might want to reconsider asking the public cruise
companies about pricing and yields.
appropriate," he said after the panel. "At Seatrade [the annual
cruise industry convention in Miami] we have the same issue. We are
public companies, and we have four chances a year to give this
information out, and at no other time."
When it came to
giving advice on making sales, the cruise lines were more
forthcoming and the executives commended the Cruise Holiday sellers
for being among the best.
agents on the front line have always been very knowledgeable," said
Carnival Cruise Lines' president, said, "Successful agents create a
database and manage it" and proceeded to quiz agents on whether
they did. In most cases, they didn't.
"We grew our
business by adding ships," he said. "You can't grow your business
without adding people or changing dynamics."
brushed off the NCF question plainly; Colin Veitch, CEO of
Norwegian Cruise Line, called the issue a red herring.
He said that
mathematically, NCFs couldn't possibly be much of an issue to
cruise sellers except to the ones who focus on the least expensive
cabins and suites," he advised audience members. "If your business
is three-day inside cabins, then NCFs are a big deal."
But the franchise
owners later said that despite selling only premium cabins, the
growing NCFs are a challenge to their business, especially in a
climate of lower costs.
"The cruise lines
say, 'We haven't lowered commissions', and that's true," said one
franchise owner. "But they put more of the money in the NCF
executives were adamant that that wasn't the case, and many
franchisers said Veitch's and the other executives' points were
the rate of NCF has been stable over last few years.
president of Celebrity Cruises, said the issue is "blown out of
proportion" and that since 2003 the multiple on yields far
outstrips the NCFs, and in that time, Celebrity has paid its
highest commissions in history.
"NCFs are things
that happen outside of ships," said MSC Cruises President Rick
Sasso. "Stevedores, port fees. Let's get the cruise cost [to
consumers] up, because our costs don't change."
Sasso earned the
biggest applause of the morning when he said MSC would offer 5%
commission on its shore excursions.
The other cruise
lines defended their no-commission policy.
president of Regent Seven Seas Cruises, said the profit on shore
excursion is marginal. "We want to pay commission but need to earn
profits, too," he said.
Rounding out the
panel were Princess Cruises President Alan Buckelew, and Stein
Kruse, president of Holland America Line.
In an interview
after the event, Block said that one of the great benefits of
having such a panel discussion is the morale boost it can provide
to franchise owners.
opportunity for these folks to build relationships at the senior
level," he said. "It gives them the idea that at Cruise Holidays
they have one-on-one access to the top. That's worth the trip
success, it may be hard to replicate the stature of this panel
again next year. The event will be held on the Celebrity Mercury,
out of Seattle.
having to possibly give up the lofty pedigree of the panel, many
Cruise Holiday franchisees were happy about this news.
The cruise ships,
they said, were more intimate and fun, and the close quarters led
to more mingling.
To contact reporter Johanna Jainchill, send e-mail to [email protected].