The 2019 Travel Industry Survey once again shows that advisors make a greater percentage of their annual gross revenue selling ocean cruises that originate in the U.S. than they do from any other category of travel product, including airline tickets (No. 2). The relative contribution to gross sales has changed little over the years, despite the more lucrative price points and commissions on cruises that originate overseas, which also carry more opportunity for add-on sales.
Travel Weekly cruise editor Tom Stieghorst spoke to Adolfo Perez, Carnival Cruise Line's senior vice president for global sales and trade marketing, about some of the factors involved.
Q: Ocean cruises that originate in the U.S. are not as lucrative for agents to sell as ocean cruises and river cruises from, say, Europe or cruises from Asia. So why isn't more agent revenue coming from those high-revenue, high-yielding products, rather than bread-and-butter cruises from the U.S.?
A: The market for more expensive cruises outside the U.S. to exotic destinations is probably smaller than the market for cruises sailing from the U.S. Obviously, it is much easier. You have a broader market for ocean cruises out of the U.S. because we're the largest cruise market in the world, by far. It's sheer volume, and the ease of selling the cruise, although the per-transaction commission may not be as high as the 15-day cruise from Barcelona or a river cruise down the Danube or whatever.
Q: So it's simple math?
A: There's much more capacity here, so you're always going to have much more of the business for the foreseeable future for the North American product. Think about [Carnival]. We will have three ships in Europe next year, but if you look at the majority of the 5.4 million people who will be sailing with us, they're in the U.S.
Q: Some people were nervous in 2015-16 about going abroad. Do you think that is a factor?
A: I don't know. I would say Europe this past year was really strong. I think it's cyclical. It depends what's going on in the market, in the world. Geopolitical conditions impact business decisions to stay close to home or venture off farther away.
Q: You supervise a lot of business development managers (BDMs). Do you do anything in the way of training to focus them on the opportunity of a higher-yielding cruise that might originate outside the U.S.?
A: We focus on helping our BDMs help the travel advisor to sell up and not to shop with their own wallets, to think about what the customer needs, that everyone doesn't want an inside [cabin] on the Riviera Deck.