Tour operators tend to fall into two camps when it comes to dealing with cruise lines: Steal their passengers or ride their wake.
For decades, many of the big tour companies have tried to compete head-on with the cruise lines, asking agents and clients to choose a tour instead of a cruise by trumpeting the benefits of touring, primarily bigger commissions and a more in-depth travel experience.
Today, the Globus family of brands and Pleasant Holidays are among a growing number of tour companies that have begun taking a different approach. Rather than asking agents and clients to book a package instead of a cruise, they're encouraging them to book a package before or after their cruise.
A few years ago, "the first instinct for us and probably every land-based operator was a cross-sell," said Steve Born, vice president of marketing at Globus. "A cross-sell as an agent is to take a consumer's request and move it to something else" -- in other words, to take a cruise request and convert it to a tour sale.
"That's an uncomfortable situation," Born said. "It's not a part of the agent's mindset. I think some other land-based operators have their feet in cement on this, [thinking] that the way to tap into the cruise business is to move [cruisers] to land. Our focus is different, it's a complement. We're not asking an agent to say, 'Don't take that big-ship cruise.'"
Starting with 2010 European cruise departures, Globus will instead be asking agents to persuade clients who want a big-ship cruise in Europe to add a two-night package before or after the cruise.
Globus will be relaunching a pre- and post-cruise program with Monograms, its independent travel brand, a feat the company attempted a few years ago that didn't fully get off the ground. The program will be ready for agents to book before the end of the year, Born said.
Globus is hoping that this time around, marketplace conditions -- a surge in big-ship cruising in Europe as well as agents' revenue being pinched by the combination of a down economy and price-cutting by cruise lines -- makes the timing of this launch right. Globus is also tweaking the model by, for example, shifting from three-day to two-day packages.
"There's been a kind of growing crescendo from agents," Born said. "Clearly we've all heard from agents about the need to create new revenue sources. That voice has never been louder, building from diminishing cruise revenue. Based on that, there's a real opportunity for our selling agents and us. We've been strategically on the track of cruise complements: What are the things we offer that can complement that business?"
One product Globus markets as a "cruise complement" is its river cruise brand, Avalon Waterways, which it touts as another way for ocean cruisers to experience cruising in a more intimate setting with access to inland European cities.
The other cruise complement will be the new Monograms offering: two-night packages in 14 European cruise port cities, including breakfasts and a transfer from the port to the hotel. Add-on options include a sightseeing tour, a transfer to the airport and roundtrip airfare, all of which is commissionable if booked prior to departure.
Further down the line, Globus hopes to make more excursions and activities available.
"With Globus, we have the lower airfares to Europe," said Bonnie Green, customer care manager at Cruises International. "If we can combine it with packages, it can get us a better offering."
Green added that working with Globus on pre- and post-cruise options "does give us higher commission than with the cruise lines. And the sightseeing ... is also something that most [customers] want."
While some cruise lines offer such outings, she said, most of them do not.
"Another advantage over the cruise line product: We can lock everything in for the client," Green said.
Born said Globus was in the process of creating a database of cruise itineraries, departure dates and ports that will enable agents to simply enter a cruise line and departure date to get the corresponding Monograms options.
He said Globus had obtained its cruise intelligence from the same sources a consumer or agent would use: cruise lines' websites and updates from agents who work closely with the cruise lines.
Packaging all around a cruise
Globus isn't the only tour operator that is attempting to cash in on cruise business. Other operators and wholesalers, such as Travel Bound, have been marketing their packages, tours and destinations as pre- and post-cruise options for years.
But today, when both agents and tour operators are looking for new ways to increase revenue, cashing in on the sheer volume of passengers that cruise lines transport to destinations is an increasingly appealing option.
That's true even for a company like TravCorp, which markets tours as a superior experience compared with cruising.
"Is the tour industry capitulating to the cruise companies? No, we're not saying buy a cruise alongside a tour," said Richard Launder, president of TravCorp. "We're out there selling tours, because the experience is far richer. ... Our position is to sell tours because that's the best way to see Europe."
Nevertheless, Launder said he wasn't going to ignore the demand in the marketplace completely. Thus, one TravCorp brand is making it easier for agents to book pre- and post-cruise FIT options. This past summer, Brendan Vacations launched iNavigate, an online system for agents to book its FIT program.
"For FIT operators, if they're able to package pre- and post-, it makes sense to do it," Launder said.
Pleasant Holidays has taken its relationship with the cruise lines a step further. In 2007, Pleasant reintroduced NCL Hawaii cruises, a product it had offered a few years earlier.
For 2010, Pleasant plans to add Caribbean cruises on the new Norwegian Epic, which will make its inaugural transatlantic cruise on June 24 and is slated to begin Caribbean cruises in July.
Just as with the NCL Hawaii cruises, Pleasant will offer pre- and post-cruise programs in the Caribbean. Jack Richards, president and CEO of Pleasant Holidays, described the Hawaii business as "extremely large" for the company.
"What we're seeing, given the number of noncommissionable fares that travel agents are seeing today, they are actively involved in seeking ancillary revenue streams," Richards said.
According to Richards, the NCL deal stands to benefit more than just Pleasant's sales. He said the pace of big-ship building is producing "a ton of capacity coming into the market. Frankly, I think that the cruise companies are going to have to look at alternative distribution channels such as tour operators."
Central Holidays this month added Cyprus as a 2010 destination in direct response to the increasing popularity of Mediterranean cruises.
Fred Berardo, president of Central Holidays, said, "The pre- and post-cruise business has been a valuable aspect of our program selection for a number of years, and the addition of Cyprus will further strengthen our position."
Berardo add: "I don't believe that travel agents are simply looking for more commissions when they book extensions although each cent does count. I believe they are interested in giving their clients the most attentive service available."
Tour operators face one major hurdle in their attempt to grow their pre- and post-cruise business: All the major cruise lines have existing pre- and post-cruise programs.
"We have to look real hard at what's different about this Monograms program," said Born. "And we have to look real hard at what's better. If you're just throwing out another me-too, it's a waste of both agents' time and ours."
Born said that Globus, which is still finalizing the pricing on its pre- and post-cruise products, hopes to offer "the lowest-price option in the marketplace."
It is also hoping its air and sightseeing options will be enticing.
Susan Reder, president of Frosch Classic Cruise and Travel, said she preferred to package pre- and post-cruise programs and customize them herself when possible.
"It's a way to earn extra money," Reder said, but she added that it also "shows the consumer that we're professional and that we know other options for them. ... And, typically, doing it ourselves without going through the cruise lines, a lot of time we can getter a better rate, get better value."
She said that an FIT program that she can book online, like Brendan's, would be attractive because of the high commissions Brendan offers.