Cruise lines are increasingly looking outside the borders of North America for their passengers, while cruise retailers are increasingly looking beyond cruise product in a bid to stay alive.
As an example of the former, RCI President Adam Goldstein told financial analysts that the line increasingly sees itself as a global player. 'We now view Southampton, Barcelona, Venice, Sao Paulo [where Royal recently opened an office], and even Shanghai as so-called drive markets, along with Galveston, Tampa, and Baltimore."
Goldstein says that about two-thirds of Royal Caribbean and Celebrity’s passengers in Europe this summer will not be from the U.S. And on Royal’s most recent earnings call, Goldstein pointed out: "Another consideration for the upcoming winter season will be the performance of our products that depend very little on customers from the U.S. This includes our cruises in Panama, Brazil, The Middle East, Asia, and Australia."
As suppliers discuss moving outside the U.S. for growth in passengers, more agencies with the word "cruise" in their titles are shifting away from cruise sales.
A recent comment to Cruise Week from an agent with the word ‘cruise’ in her agency name sums up the shift: "To stay in business, I’ve had to adjust my sales focus. Cruise prices are low, and noncommissionables are high. My cruise yields are way down in the last two years. A few years back I was 60% cruise, 40% land. Now I’m 40% cruise, 60% land."
Talk of such a shift is not new. Over the past couple of years many cruise-oriented agents have pledged to increase focus on land business, partly because of client demand ("my cruise customers also take land vacations"), but mostly because of declining cruise pay. Many said they’d be putting more effort into promoting European land vacations or all-inclusives.
Cruise Week recently contacted Mark Comfort, a Cruise Holidays agent who decided to head for land several years back. He now has mixed feelings about the shift, saying that for all the problems with cruise commissions, what’s often taken for granted is the good job cruise lines do with consumer marketing, which, in turn, brings business to the agency doors.
The agent says many land suppliers have been slow to respond to changing market conditions. Indeed, the bottom has fallen out of the Europe tour biz. "It’s amazing how quick and agile and efficient the cruise industry was in bringing back the business," says Comfort. "It’s amazing how slow, nonaggressive, and inefficient the land-based operators are in dealing with the new economy. Mexico, for instance, was late to offer deals, even though the resorts were 2/3 empty."